Canaan Inc. Provides Update on its Status under the Holding Foreign Companies Accountable Act

Rhea-AI Summary

Canaan Inc. (NASDAQ: CAN) announced an update on its status under the Holding Foreign Companies Accountable Act (HFCAA), following its identification as a Commission-Identified Issuer by the SEC on May 4, 2022. This designation results from the SEC's findings that Canaan's auditor's working papers cannot be fully inspected by the PCAOB. If identified for three consecutive years, Canaan may face trading prohibitions in the U.S. The company aims to protect stakeholder interests while complying with regulations in China and the U.S., and it seeks to maintain its NASDAQ listing.

Positive

• Canaan continues to explore solutions to protect stakeholder interests.
• The Company remains committed to comply with regulations in China and the U.S.

Negative

• Canaan was identified as a Commission-Identified Issuer under HFCAA, indicating potential trading restrictions.
• If identified for three consecutive years, Canaan's shares could be prohibited from trading in U.S. markets.

BEIJING, May 5, 2022 /PRNewswire/ -- Canaan Inc. (NASDAQ: CAN) ("Canaan" or the "Company"), a leading high-performance computing solutions provider, today provides an update on its status under the Holding Foreign Companies Accountable Act (the "HFCAA").

The Company was provisionally named by the United States Securities and Exchange Commission (the "SEC") as a Commission-Identified Issuer on May 4, 2022 following the Company's filing of its annual report on Form 20-F for the fiscal year ended December 31, 2021 with the SEC on April 29, 2022.

The Company understands that this identification under the HFCAA and its implementation rules issued thereunder indicates that the SEC determines that the Company used an auditor whose working paper cannot be inspected or investigated completely by the Public Company Accounting Oversight Board of the United States (the "PCAOB") to issue the audit opinion for its financial statements for the fiscal year ended December 31, 2021.

In accordance with the HFCAA, the SEC shall prohibit a company's shares or American depositary shares from being traded on a national stock exchange or in the over-the-counter trading market in the United States if the company has been identified by the SEC for three consecutive years due to the PCAOB's inability to inspect the auditor's working paper.

The Company has been actively exploring possible solutions to protect the interest of its stakeholders. The Company will continue to comply with applicable laws and regulations in both China and the U.S., and strive to maintain its listing status on NASDAQ.

About Canaan Inc.

Established in 2013, Canaan (NASDAQ: CAN), is a technology company focusing on ASIC high-performance computing chip design, chip research and development, computing equipment production, and software services. The company's vision is "super computing is what we do, social enrichment is why we do it." Canaan has rich experience in chip design and streamlined production in the ASIC field. In 2013, it released and mass produced its first ASIC Bitcoin mining machine. In 2018, Canaan released the world's first 7nm ASIC chip, providing energy efficient computing equipment to the cryptocurrency mining industry. In the same year, Canaan released the world's first RISC-V architecture commercial edge AI chip, further harnessing the potential of ASIC technology in the field of high-performance computing and artificial intelligence.

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, the business outlook and quotations from management in this press release, as well as Canaan Inc.'s strategic and operational plans, 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 in China; 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, including its registration statement on Form F-1, as amended, and its annual reports on Form 20-F, as amended. 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.
Ms. 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

What is Canaan Inc.'s status under the Holding Foreign Companies Accountable Act as of May 2022?

Canaan Inc. was identified as a Commission-Identified Issuer by the SEC on May 4, 2022, indicating compliance issues with auditing.

What could happen to Canaan Inc.'s shares if the HFCAA issues are not resolved?

If identified for three consecutive years, Canaan's shares may be prohibited from trading on U.S. exchanges.

What actions is Canaan Inc. taking regarding its auditor's inspection issues?

Canaan is actively exploring solutions to protect stakeholder interests and aims to comply with regulations.

When did Canaan Inc. file its annual report that triggered the SEC's identification?

Canaan filed its annual report on Form 20-F for the fiscal year ended December 31, 2021, on April 29, 2022.