Cango Inc. Issues 146.67 Million Shares for Crypto Mining Machines

Cango Inc. has announced a third amendment to its On-Rack Sales and Purchase Agreement, initially signed on November 6, 2024. This amendment involves the acquisition of on-rack crypto mining machines with an aggregate hashrate of 18 Exahash per second, to be settled through the issuance of Class A ordinary shares of the Company to the sellers. The Company had previously announced amendments to the agreement on March 26, 2025, and April 3, 2025.

The Third Amendment adjusts the number of shares to be issued to the sellers based on the updated total number of shares of the Company outstanding on a fully diluted basis. Consequently, a total of 146,670,925 Class A ordinary shares of the Company will be issued to the sellers at the closing, with an additional 97,780,616 bonus shares potentially issued to the sellers upon the triggering of a bonus event as outlined in the original Purchase Agreement.

The amendment also addresses changes necessitated by the Company's sale of its PRC business, which was completed on May 27, 2025. Under the original Purchase Agreement, the Company would have been required to issue additional shares to the sellers if the net asset value of the Company's PRC business were to decrease by RMB50 million or more by the end of 2026 compared to September 30, 2024. Post the Third Amendment, the Company will be required to issue additional shares if the total consideration from the PRC Business Disposal is reduced by approximately US$7.0 million (or approximately RMB50 million) or more. This reduction could result from indemnifiable losses payable by the Company to the buyer of the PRC business or the portion of the purchase price held back by the buyer and finally determined not to be releasable to the Company.

Upon closing of the Share-Settled Transactions as amended, Golden TechGen Limited (GT), expected to be the largest seller, will own approximately 18.79% of the Company's total outstanding shares. All sellers in the Share-Settled Transactions will collectively own approximately 41.38% of the Company's total outstanding shares before the issuance of any Bonus Shares or Adjustment Shares.

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

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

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

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