Canaan Closes Second Tranche of Preferred Shares Financing, Raises $25M
Ticker: CAN · Form: 6-K · Filed: Jan 24, 2024 · CIK: 1780652
Complexity: simple
Sentiment: mixed
Topics: financing, preferred-shares, capital-raise, dilution-risk
TL;DR
**Canaan just raised another $25M in preferred shares, bringing total financing to over $50M, good for cash but watch for dilution.**
AI Summary
Canaan Inc. (NASDAQ: CAN) closed the second tranche of its preferred shares financing on January 22, 2024, raising an additional $25 million by issuing 50,000 Preferred Shares at $1,000.00 each. This brings the total gross proceeds from the financing to over $50 million, following the first tranche of $25 million closed on December 11, 2023. This matters to investors because it indicates the company is successfully raising capital, which can fund operations or expansion, but also introduces potential dilution if the preferred shares are converted into common stock.
Why It Matters
This financing provides Canaan Inc. with significant capital, which can be used to strengthen its balance sheet, fund ongoing operations, or invest in new projects, potentially boosting future growth. However, the issuance of preferred shares could lead to dilution for existing shareholders if converted.
Risk Assessment
Risk Level: medium — While raising capital is positive, preferred shares often come with conversion rights that could dilute existing common shareholders, and the terms of conversion are not fully detailed here.
Analyst Insight
An investor should monitor future filings for details on the conversion terms of the Series A Convertible Preferred Shares to assess potential dilution and evaluate how the new capital is deployed by Canaan Inc. to determine its impact on long-term value.
Key Numbers
- $50 million — total gross proceeds (from the preferred shares financing across two tranches)
- $25 million — gross proceeds from first tranche (closed on December 11, 2023)
- $25 million — gross proceeds from second tranche (closed on January 22, 2024)
- 125,000 — maximum Series A Convertible Preferred Shares (to be issued and sold to the Buyer)
- $1,000.00 — price per Preferred Share (for both tranches of the financing)
- 50,000 — Preferred Shares issued in second tranche (contributing to the $25 million raised in the second tranche)
- 2,800,000 — American depositary shares (ADSs) delivered (by The Bank of New York Mellon as part of the second tranche)
- $0.00000075 — price per ADS (for the ADSs delivered in the second tranche)
Key Players & Entities
- Canaan Inc. (company) — the registrant and issuer of preferred shares
- The Bank of New York Mellon (company) — delivered American depositary shares (ADSs)
- institutional investor (person) — the buyer of the preferred shares
Forward-Looking Statements
- Canaan Inc. will use the raised capital to expand its operations or invest in new technology. (Canaan Inc.) — medium confidence, target: 2024-12-31
- The conversion of preferred shares into common stock will lead to dilution for existing shareholders. (Canaan Inc. shareholders) — high confidence, target: 2025-01-22
FAQ
What was the total gross proceeds raised by Canaan Inc. from the preferred shares financing?
Canaan Inc. raised total gross proceeds of over $50 million from its preferred shares financing.
When did Canaan Inc. close the second tranche of its preferred shares financing?
Canaan Inc. closed the second tranche of its preferred shares financing on January 22, 2024.
How many Preferred Shares were issued in the second tranche of the financing?
In the second tranche, the Company issued 50,000 Preferred Shares at a price of US$1,000.00 per Preferred Share.
What was the price per Preferred Share in this financing?
The price for each Preferred Share was US$1,000.00.
Which entity delivered the American depositary shares (ADSs) as part of the second tranche?
The Bank of New York Mellon delivered 2,800,000 American depositary shares (ADSs) as part of the second tranche.
Filing Stats: 750 words · 3 min read · ~3 pages · Grade level 13.8 · Accepted 2024-01-23 19:21:30
Key Financial Figures
- $50 million — ), raising total gross proceeds of over $50 million. On November 27, 2023, the Company en
- $1,000.00 — eferred Shares") at the price of US$1,000.00 for each Preferred Share. On December 1
- $25 million — ancing, raising total gross proceeds of $25 million. Pursuant to the second tranche of the
- $0.00000075 — hares of the Company, at the price of US$0.00000075 for each ADS . The Company intends to
Filing Documents
- tm243912d1_6k.htm (6-K) — 16KB
- 0001104659-24-005975.txt ( ) — 17KB
From the Filing
UNITED SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of January 2024 Commission File Number: 001-39127 Canaan Inc. 28 Ayer Rajah Crescent #06-08 Singapore 139959 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F Form 40-F Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Canaan Inc. Closes Second Tranche of Preferred Shares Financing On January 22, 2024, Canaan Inc. (NASDAQ: CAN) ("Canaan" or the "Company" or "We") closed the second tranche of its previously announced preferred shares financing (the "Preferred Shares Financing"), raising total gross proceeds of over $50 million. On November 27, 2023, the Company entered into a Securities Purchase Agreement with an institutional investor (the "Buyer"), pursuant to which the Company shall issue and sell to the Buyer up to 125,000 Series A Convertible Preferred Shares (the "Preferred Shares") at the price of US$1,000.00 for each Preferred Share. On December 11, 2023, we closed the first tranche of Preferred Shares Financing, raising total gross proceeds of $25 million. Pursuant to the second tranche of the Preferred Shares Financing, the Company issued 50,000 Preferred Shares at the price of US$1,000.00 per Preferred Share and caused The Bank of New York Mellon to deliver 2,800,000 American depositary shares (“ADSs”), each representing fifteen Class A ordinary shares of the Company, at the price of US$0.00000075 for each ADS . The Company intends to use the net proceeds from the sale of the securities for research and development, expansion of production scale, and other general corporate purposes. This Form 6-K 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. Safe Harbor Statement This Form 6-K 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 inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward−looking 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 Form 6-K and in the attachments is as of the date of this Form 6-K, and Canaan Inc. does not undertake any obligation to update any forward−looking statement, except as required under applicable law. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Canaan Inc. By: /s/ Nangeng Zhang Name: Nangeng Zhang Title: Chairman and Chief Executive Officer Date: January 23, 2024