Canaan Inc. Closes Third Preferred Shares Financing Tranche

TL;DR

CAN closed another preferred share financing tranche on 9/30/24, raising capital for operations.

AI Summary

Canaan Inc. announced the closing of the third tranche of its preferred shares financing on September 30, 2024. The company successfully raised an undisclosed amount of capital through this financing round, which is intended to support its ongoing operations and strategic initiatives.

Why It Matters

This financing round provides Canaan Inc. with additional capital, which can be crucial for funding research and development, expanding market reach, or navigating potential economic downturns in the semiconductor industry.

Risk Assessment

Risk Level: medium — The company is in the semiconductor industry, which is cyclical and capital-intensive, and the financing details are not fully disclosed.

Key Players & Entities

• Canaan Inc. (company) — Registrant and issuer of preferred shares
• NASDAQ: CAN (company) — Stock ticker symbol for Canaan Inc.
• September 30, 2024 (date) — Date of closing for the third tranche of financing

FAQ

Key Financial Figures

• $50 million — sing additional total gross proceeds of $50 million. Pursuant to the third tranche of Prefe
• $1,000.00 — Closing Shares”) at a price of US$1,000.00 per Preferred Share. Canaan agreed that
• $25 million — ancing, raising total gross proceeds of $25 million. On January 22, 2024, the Company close
• $0.00000005 — dquo;) of Preferred Shares, par value US$0.00000005 per share, as adopted by the Company. T
• $4.00 — d Conversion Price has been modified to $4.00. For reference, the closing trading pri
• $1.06 — rsquo;s ADSs on September 27, 2024, was $1.06. Second, a 90-day average Secured Overn

Filing Documents

• tm2425018d1_6k.htm (6-K) — 25KB
• tm2425018d1_ex10-1.htm (EX-10.1) — 32KB
• tm2425018d1_ex10-2.htm (EX-10.2) — 274KB
• tm2425018d1_ex10-2img001.jpg (GRAPHIC) — 11KB
• 0001104659-24-104270.txt ( ) — 348KB

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 September 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 Third Tranche of Preferred Shares Financing Canaan Inc. (NASDAQ: CAN) (“Canaan” or the “Company”) 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. 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) s o 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 th

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