Canaan Inc. Closes Series A-1 Preferred Shares Financing

Rhea-AI Summary

Canaan (NASDAQ: CAN), a high-performance computing solutions provider, has completed its previously announced Series A-1 preferred shares financing, successfully raising US$30 million in gross proceeds. The financing involved selling 30,000 Series A-1 Convertible Preferred Shares to an institutional investor at US$1,000.00 per share, as per the securities purchase agreement dated November 19, 2024.

Positive

• Secured $30 million in new funding through preferred shares financing
• Successfully completed transaction with institutional investor

Negative

• Potential dilution of existing shareholders through convertible preferred shares issuance

Insights

Financial Analyst

The $30 million preferred shares financing provides important liquidity for Canaan during a challenging period for crypto mining companies. At $1,000 per share for 30,000 Series A-1 Convertible Preferred Shares, this represents a significant capital injection relative to Canaan's $575M market cap.

The deal structure using preferred shares rather than common stock suggests defensive positioning by the institutional investor, seeking preferential rights and downside protection. This financing could help Canaan weather current market conditions but also indicates potential difficulties in securing traditional funding sources. The dilutive impact will depend on future conversion terms, which weren't disclosed in this announcement.

SINGAPORE, Nov. 26, 2024 /PRNewswire/ -- Canaan Inc. (NASDAQ: CAN) ("Canaan" or the "Company"), a leading high-performance computing solutions provider, today announced that it has closed the previously announced Series A-1 preferred shares financing (the "Preferred Shares Financing"), raising total gross proceeds of US$30 million. 

On November 19, 2024, the Company entered into a securities purchase agreement ("Securities Purchase Agreement") with an institutional investor (the "Buyer"), pursuant to which the Company agreed to issue and sell to the Buyer 30,000 Series A-1 Convertible Preferred Shares (the "Preferred Shares") at the price of US$1,000.00 for each Preferred Share.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Company's current report on Form 6-K dated November 20, 2024 announcing the execution of the Securities Purchase Agreement.

This press release is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any securities, which is made only by means of a prospectus supplement and related prospectus. There will be no sale of these securities in any jurisdiction in which such an offer, solicitation of an offer to buy or sale would be unlawful.

About Canaan Inc.

Established in 2013, Canaan Inc. (NASDAQ: CAN), is a technology company focusing on ASIC high-performance computing chip design, chip research and development, computing equipment production, and software services. Canaan has extensive experience in chip design and streamlined production in the ASIC field. In 2013, Canaan's founding team shipped to its customers the world's first batch of mining machines incorporating ASIC technology in bitcoin's history under the brand name Avalon. In 2019, Canaan completed its initial public offering on the Nasdaq Global Market. To learn more about Canaan, please visit https://www.canaan.io/.

Safe Harbor Statement

This press release contains forward−looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward−looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, Canaan Inc.'s anticipated financing plans and its intended use of proceeds contain forward−looking statements. Canaan Inc. may also make written or oral forward−looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20−F and 6−K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Canaan Inc.'s beliefs and expectations, are forward−looking statements. Forward−looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward−looking statement, including but not limited to the following: the Company's goals and strategies; the Company's future business development, financial condition and results of operations; the expected growth of the bitcoin industry and the price of bitcoin; the Company's expectations regarding demand for and market acceptance of its products, especially its bitcoin mining machines; the Company's expectations regarding maintaining and strengthening its relationships with production partners and customers; the Company's investment plans and strategies, fluctuations in the Company's quarterly operating results; competition in its industry; and relevant government policies and regulations relating to the Company and cryptocurrency. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Canaan Inc. does not undertake any obligation to update any forward−looking statement, except as required under applicable law.

Investor Relations Contact

Canaan Inc.
Xi Zhang
Email: IR@canaan-creative.com

ICR, LLC.
Robin Yang
Tel: +1 (347) 396-3281
Email: canaan.ir@icrinc.com

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SOURCE Canaan Inc.

FAQ

How much did Canaan (CAN) raise in its Series A-1 preferred shares financing?

Canaan raised US$30 million in gross proceeds through its Series A-1 preferred shares financing.

What was the price per share for Canaan's (CAN) Series A-1 preferred shares?

The Series A-1 preferred shares were sold at US$1,000.00 per share.

When did Canaan (CAN) close its Series A-1 preferred shares financing?

Canaan closed its Series A-1 preferred shares financing on November 26, 2024, following a securities purchase agreement dated November 19, 2024.

How many Series A-1 preferred shares did Canaan (CAN) issue in the financing?

Canaan issued 30,000 Series A-1 Convertible Preferred Shares.