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The world’s second-largest manufacturer of crypto mining machines, Canaan Creative, has secretly filed for an Initial Public Offering (IPO) with the U.S. Securities and Exchange Commission (SEC), with the goal of raising $200 million. Canaan Creative has become China’s first major manufacturer of Bitcoin mining machines to file for an IPO in the United States.
Canaan Creative is a manufacturer of cryptocurrency mining machines based in China. It produces blockchain servers and designs ASIC microprocessor solutions. It mainly sells its Bitcoin mining products under the brand name AvalonMiner. As AllStocks News reported before, there were already rumors that the company is looking to raise funds via an IPO.
At first, only small firms were allowed to submit confidential applications with the SEC. In July 2017, the SEC changed this rule to encourage more IPOs and allowed private applications for all companies regardless of their size.
This is not the first time that Canaan Creative has tried to file for an IPO. In June 2016, Canaan tried to use a back-door listing approach. Luyitong Intelligent Electric PLC., a listed company of the Shenzhen Stock Exchange, announced its plan for major asset restructuring, with a proposed price of 3.06 billion yuan (about $443 million), and a total of 14 shareholders bought all the shares. After the transaction, the deal was suspended by the Shenzhen Stock Exchange because of the backdoor approach.
Then in August 2017, Canaan Creative once again applied to the Chinese New Third Board Market. Unfortunately, in September the government departments began to ban all cryptocurrency transactions and ICOs. Canaan voluntarily gave up the listing in March of the following year without disclosing the reason.
On May 15, Canaan officially applied to the Hong Kong Stock Exchange, intending to be listed on the main board of Hong Kong, raising $1 billion. In November, the official website of the Hong Kong Stock Exchange also classified Canaan’s listing application as ‘invalid.’
Crunching the Crypto Numbers
According to the prospectus Canaan’s revenues in 2015, 2016 and 2017 were RMB 48 million ($7 million), RMB 316 million ($46 million) and RMB 1.308 billion ($190 million) respectively, the gross profit was RMB 14 million ($2 million), RMB 132 million ($19 million) and RMB 604 million ($87 million) respectively, the interest rates were 29.1%, 41.7%, and 46.2%, respectively.
The prospectus also showed that the three founding team members of Canaan Creative held more than 50% of the shares and its distribution among them was very even as the founder and CEO N.G. Zhang held 17.6%, the co-founder and CFO held 17.2%, and the founder (mainly responsible for technology) held 17.61%.
However, these statistics are no longer the same as the co-founder of Canaan Xiangfu Liu left the company in February this year. According to some reports, Xiangfu Liu left due to his differences with the company’s overall strategy.
The listing applications of Yibang International and Bitmain in Hong Kong were also classified as invalid by the Hong Kong Stock Exchange. Now Bitmain is also expected to formally submit an IPO application in the US in the near future.