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United States securities and exchange commission logo
April 5, 2022
Nangeng Zhang
Chairman and Chief Executive Officer
Canaan Inc.
1-2/F, QianFang Science Building C
Building No. 27, Zhongguancun Software Park (Phase I)
No. 8 Dongbeiwang West Road
Haidian District, Beijing, 100193
People s Republic of China
Re: Canaan Inc.
Form 20-F for the
Fiscal Year Ended December 31, 2020
Filed April 21,
2021
File No. 001-39127
Dear Mr. Zhang:
We have reviewed your responses to our comment letters dated
September 21, 2021 and
November 5, 2021 and have the following comments. In some of our
comments, we may ask
you to provide us with information so we may better understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for the Fiscal Year Ended December 31, 2020
Item 3. Key Information, page 1
1. We note in your
response letters that your auditor is subject to the determinations
announced by the PCAOB
on December 16, 2021 and that, as a result, the PCAOB is not
able to fully inspect
your auditor. Please provide more prominent disclosure that your
auditor is subject to
the determinations announced by the PCAOB on December 16, 2021
and that, as a result,
the PCAOB is not able to fully inspect your auditor. Further disclose
that, under the Holding
Foreign Companies Accountable Act, if the PCAOB is unable to
fully inspect your
auditor for three consecutive years, your securities may be delisted from
an exchange and
prohibited from trading. Disclose also that the U.S. Senate has passed the
Accelerated Holding
Foreign Companies Accountable Act which, if enacted, would
Nangeng Zhang
FirstName
Canaan Inc.LastNameNangeng Zhang
Comapany
April NameCanaan Inc.
5, 2022
April 25, 2022 Page 2
Page
FirstName LastName
decrease the number of non-inspection years from three years to two.
Provide specific
cross-references to your more detailed risk factors.
2. We note your proposed revisions in response to prior comment 1 of our
letter dated
September 21, 2021. Please disclose that these risks could cause the
value of your
securities to significantly decline or become worthless.
3. Please refer to prior comment 2 of our letter dated September 21,
2021. When describing
the business operations of a PRC subsidiary, disclose clearly which
subsidiary is
conducting such operations.
4. Refer to prior comment 3 of our letter dated September 21, 2021.
Revise to describe the
tax consequences that you will face if you should decide to declare
any dividends. Please
also disclose whether cash generated from one subsidiary is used to
fund another
subsidiary s operations, whether you have ever faced difficulties or
limitations on your
ability to transfer cash between subsidiaries, and whether you have
cash management
policies that dictate the amount of such funding.
5. Refer to prior comment 1 of our letter dated November 5, 2021 letter
and your proposed
revisions included in your November 22, 2021 response letter. Please
also describe the
consequences to you and your investors if you or your subsidiaries:
(i) do not receive or
maintain such permissions or approvals, (ii) inadvertently conclude
that such permissions
or approvals are not required, or (iii) applicable laws, regulations,
or interpretations
change and you are required to obtain such permissions or approvals in
the future.
Item 3.D. Risk Factors, page 6
6. Refer to prior comment 4 of our letter dated September 21, 2021 and
your proposed
revisions included in your October 22, 2021 response letter. Please
revise your third bullet
point under Risks and uncertainties related to doing business in
the PRC in general
to disclose the risk that the Chinese government may intervene or
influence your
operations at any time.
7. Refer to prior comment 6 of our letter dated September 21, 2021 letter
and your proposed
revisions included in your October 22, 2021 response letter. Please
revise your second
proposed risk factor to state that the Chinese government may
intervene or influence your
operations at any time. Also, given recent statements by the Chinese
government
indicating an intent to exert more oversight and control over
offerings that are conducted
overseas and/or foreign investment in China-based issuers, acknowledge
the risk that any
such action could significantly limit or completely hinder your
ability to offer or continue
to offer securities to investors and cause the value of such
securities to significantly
decline or be worthless.
Nangeng Zhang
Canaan Inc.
April 5, 2022
Page 3
8. Refer to prior comment 7 of our September 21, 2021 letter and prior
comment 1 of our
November 5, 2021 letter. Please update your disclosure where
applicable to reflect that the
CAC has implemented new Measures for Cybersecurity Review which became
effective
on February 15, 2022.
Our ADSs may be delisted under the Holding Foreign Companies Accountable Act if
the
PCAOB is unable to inspect our auditors...., page 32
9. Refer to prior comment 2 of our letter dated November 5, 2021 and your
proposed
revisions included in your November 19, 2021 response letter. We note
that the PCAOB is
not able to fully inspect your auditor. As such, please remove the
reference that your
auditor is subject to laws in the United States pursuant to which
the PCAOB conducts
regular inspections to assess its compliance with the applicable
professional standards.
Update your disclosure to reflect that the Commission adopted rules to
implement the
HFCAA and that, pursuant to the HFCAA, the PCAOB has issued its report
notifying the
Commission of its determination that it is unable to inspect or
investigate completely
accounting firms headquartered in mainland China or Hong Kong.
You may contact Dale Welcome, Staff Accountant, at 202-551-3865 or
Martin James,
Senior Advisor, at 202-551-3671 if you have questions.
FirstName LastNameNangeng Zhang Sincerely,
Comapany NameCanaan Inc.
Division of
Corporation Finance
April 5, 2022 Page 3 Office of
Manufacturing
FirstName LastName