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Mining hardware manufacturer Canaan plans to issue $ 12.4 million in shares to its employees

June 2, 2020

Canaan, manufacturer of application-specific integrated circuits (ASIC) for cryptocurrency mining, filed an application with the SEC. Issue approximately $ 12.4 million of its shares to its employees.

According to Form S-8, which was filed with the SEC on May 27, Canaan is targeting the issue of Class A common stock of nearly $ 12.4 million with a maximum offer price of $ 0.24 per share.

As Cointelegraph reported in late November 2019, Canaan raised $ 90 million by selling 10,000,000 shares for $ 9 each as part of its IPO. According to Google Finance, the company’s shares had lost 76% of their value at the time of going to press and are now worth $ 2.16.

Canaan is controversial due to alleged dubious practices

Mining hardware manufacturer Canaan plans to issue $ 12.4 million in shares to its employeesMining hardware manufacturer Canaan plans to issue $ 12.4 million in shares to its employees

According to reports from the beginning of March, Canaan misrepresented its potential profits for 2020 to get investors to go public. Soon afterwards, Rosen law firm, which focused on investor rights, initiated a class action lawsuit against the company. The company is accused of making false and misleading statements that have harmed investors.

As a Cointelegraph analysis on the subject explained, the company announced a “strategic partnership” with the Hong Kong-listed company Grandshores a month before the IPO. The company was said to buy up to $ 150 million of mining equipment from Canaan.

The ASIC request would make up almost all of Canaan’s $ 177 million in sales. Analysts also claim that the customer had no way of doing business as the company only had a market cap of $ 50 million and $ 16 million in cash.

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