Plans to fund self-mining expansion and
Bitcoin mining machine business in
North America
SINGAPORE, Sept. 30, 2024 /PRNewswire/ -- Canaan Inc.
(NASDAQ: CAN) ("Canaan" or the "Company"), a leading
high-performance computing solutions provider, today announced that
it has closed the third and final tranche of its previously
announced preferred shares financing (the "Preferred Shares
Financing"), raising additional total gross proceeds of
$50 million. Pursuant to the third
tranche of Preferred Shares Financing, the Company issued 50,000
Preferred Shares (the "Third Closing Shares") at a price of
US$1,000.00 per Preferred
Share. Canaan agreed that the proceeds from the sale of
the Third Closing Shares will be used by the Company and/or its
subsidiaries to manufacture or invest in digital mining sites and
equipment to be deployed or sold in North
America, including any acquisition or disposition of assets
from or between subsidiaries.
"We are delighted to continue our partnership with this
institutional investor. We believe their continued commitment
demonstrates their confidence in Canaan and the significant
opportunities this collaboration offers for both parties," said
Nangeng Zhang, chairman and chief executive officer of
Canaan. "By expanding our North American self-mining
activities, we expect to benefit from a more diversified revenue
stream, reduced volatility, and a stable regulatory environment.
This strategic initiative positions us to capitalize on the
anticipated Bitcoin bull market, enhancing our ability
to generate robust returns from our self-mining operations.
We also hope that working on projects that utilize the Northern
American power infrastructure will expand our team's expertise on
blockchain data center operations and beyond."
On November 27, 2023, the Company
entered into a securities purchase agreement (the "Securities
Purchase Agreement") with an institutional investor (the "Buyer"),
pursuant to which the Company agreed to issue and sell to the Buyer
up to 125,000 Series A Convertible Preferred Shares at the price of
US$1,000.00 for each Preferred Share.
On December 11, 2023, the Company
closed the first tranche of the Preferred Shares Financing, raising
total gross proceeds of $25 million.
On January 22, 2024, the Company
closed the second tranche of the Preferred Shares Financing,
raising total gross proceeds of $50
million.
On September 27, 2024, the Company
closed the third and final tranche of the Preferred Shares
Financing under the Securities Purchase Agreement. The Third
Closing Shares were sold under the amended terms of certain
documents executed on September 26,
2024, namely, a global amendment (the "Global Amendment") to
the Securities Purchase Agreement as well as an amended
certificate of designations (the "Certificate of Designations") of
Preferred Shares, par value US$0.00000005 per share, as adopted by the
Company. The amendments to the original terms of the securities
purchase agreement and certificate of designations include,
among other things,
(a) while the first and second tranches of
preferred shares were sold as registered securities under a
registration statement of the Company, the Third Closing Shares
were issued and sold as "restricted securities" under applicable
U.S. federal and state securities laws, and the Buyer acknowledged
that Company has no obligation to register or qualify the Third
Closing Shares, or the ADSs into which they may be converted;
(b) the Third Closing Shares are convertible,
after six (6) months following their issuance, into Class A
Ordinary Shares that can be deposited with the Depositary for the
issuance of ADSs; and
(c) so long as the Buyer holds any of the
Preferred Shares or any Conversion Shares, the Buyer will limit its
aggregate sales of Conversion Shares on the open market in any
given calendar week to no more than 10% of the weekly trading
volume of the ADSs on all trading markets for such week.
The Buyer and the Company have also made amendments to the
preferred share conversion mechanism under the Certificate of
Designations. First, the Fixed Conversion Price has increased. For
the first and second tranches, the Fixed Conversion Price was 120%
of the Weighted Average Price of the ADSs on the Trading Day
immediately preceding the applicable Issuance Date of the Series A
Preferred Shares being converted. For the third tranche, the
Fixed Conversion Price has been modified to $4.00. For reference, the closing trading price
of the Company's ADSs on September 27,
2024, was $1.06. Second, a
90-day average Secured Overnight Financing Rate ("SOFR") published
on the Trading Day immediately preceding the date of conversion, or
a SOFR factor, has been added to the calculation of the Conversion
Amount, reflecting an additional cost for the Company to use the
proceeds from the sales of the Third Closing Shares until the
Conversion Date. As of September 27,
2024, the 90-day average SOFR was 5.32675%.
The Securities Purchase Agreement (as amended) contains
customary representations, warranties and agreements by the Company
and the Buyer, and indemnification obligations of the Company
against certain liabilities, including for liabilities under the
Securities Act of 1933, as amended. The provisions of the
Securities Purchase Agreement (as amended), including the
representations and warranties contained therein, are not for the
benefit of any party other than the parties to such agreement and
are not intended as a document for investors and the public to
obtain factual information about the current state of affairs of
the Company. Rather, investors and the public should look to other
disclosures contained in the Company's filings with the SEC.
The Certificate of Designations creates the Preferred Shares and
provides for the designations, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, of the Preferred Shares, which
becomes effective upon its adoption.
The foregoing description does not purport to be complete and is
qualified in its entirety by reference to the full text of the
Securities Purchase Agreement, as amended, and the Certificate of
Designations, as amended. The full text of the amendment to the
Securities Purchase Agreement and the form of amended Certificate
of Designations are to be filed as exhibits to the Company's
current report on Form 6-K dated on or around September 30, 2024. The full text of the
Securities Purchase Agreement was previously filed as an exhibit to
the Company's current report on Form 6-K dated November 28, 2023. Capitalized terms used in this
press release without definition shall have the meanings given to
them in the Securities Purchase Agreement, the Certificate of
Designations, and any amendments
thereto.
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 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.
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.