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The bitcoin miner has issued a $10 million convertible note and completed a $65 million insider-led funding round while striving to regain compliance with exchange regulations.
Cango confronts the possibility of delisting from the NYSE as its shares trade below $1 and raises new capital. (Unsplash)
Key points:
- Cango has indicated that it could face delisting from the NYSE if its stock price does not recover above $1 within a six-month period.
- The firm has issued a $10 million convertible note to DL Holdings as part of a larger strategic collaboration.
- Additionally, it has successfully closed a $65 million equity investment led by insiders, with payments made in USDT.
Cango (CANG) is at risk of losing its NYSE listing after its shares traded below $1 for 30 consecutive days, prompting a compliance notification from the exchange and providing the bitcoin miner a six-month timeframe to recover, as stated in a press release on Wednesday.
The New York Stock Exchange flagged the company on March 10, cautioning that failure to raise its stock price above the $1 minimum by the conclusion of the cure period could result in suspension and delisting actions. Cango has expressed its intention to monitor market conditions and assess avenues to regain compliance while its shares continue to be traded in the meantime.
In light of this, the company is strengthening its financial position with new capital.
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In a separate statement, Cango announced that it has established a $10 million convertible note agreement with Hong Kong-listed DL Holdings, along with issuing warrants for shares at $2.70 each. This financing is accompanied by a non-binding cooperation framework that may lead to joint investments related to crypto mining and AI infrastructure.
Funds from the note are designated for upstream acquisitions and expanding Cango’s initiative in computing infrastructure, which aligns with a broader shift beyond bitcoin mining.
Cango’s recent fundraising efforts coincide with the company’s transition from its focus on bitcoin mining to a more comprehensive strategy centered around energy and AI compute infrastructure. The firm is leveraging its global mining operations as a basis for high-performance computing, with plans to reconfigure or enhance its power capacity to support data-intensive AI tasks, a trend that reflects a larger industry movement towards more stable, higher-margin revenue sources.
The issuance of the convertible note follows the completion of a $65 million strategic investment round led by entities associated with chairman Xin Jin and director Chang-Wei Chiu. This transaction, settled in USDT and finalized on March 31, resulted in the issuance of over 49 million Class A shares by the company.
Collectively, these transactions highlight management’s efforts to stabilize the company financially while investing in long-term growth in energy and AI-related computing, even as it faces immediate pressure to maintain its NYSE listing.
Cango’s shares have experienced a significant decline this year, emphasizing the urgency of its recent capital raise. The stock has dropped more than 70% year to date, recently trading around $0.39 after beginning January above $1.40, with ongoing selling pressure driving it below the NYSE’s $1 minimum listing requirement.
Read more: Cango is liquidating its bitcoin holdings to reduce debt and finance an AI transformation
