The company has agreed to pay the penalty, which may be offset by certain payments it makes to its security holders in connection with its provisional liquidation proceeding in the Cayman Islands. "This settlement with the SEC reflects our cooperation and remediation efforts, and enables the company to continue with the execution of its business strategy," Dr. Jinyi Guo, Chairman and Chief Executive Officer of Luckin Coffee said in a statement. "The Company's Board of Directors and management are committed to a system of strong internal financial controls, and adhering to best practices for compliance and corporate governance," Guo added. The transfer of funds to the security holders will be subject to approval by Chinese authorities. "Public issuers who access our markets, regardless of where they are located, must not provide false or misleading information to investors," SEC Director of Enforcement Stephanie Avakian said in a statement.