Chinese mining chip designer Nano Labs has filed for a US initial public offering (IPO) to raise $50 million on Nasdaq amid unfavorable market conditions.
According to information obtained by Renaissance Capital’s IPO tracking tool, The Huangzhou-based cryptocurrency mining chip maker has filed with the US regulator Securities and Exchange Commission (SEC) for its upcoming public offering on Nasdaq, the world’s second-largest stock exchange.
The request for US depositary shares comes amid a series of regulatory difficulties in China and the United States, which has caused a shortage of fundraising abroad by Chinese issuers. In 2022 there were only two IPOs in New York, raising $49.5 million, compared to 28 IPOs raising $5.8 billion last year.
Nano Labs, however, is going ahead with its Nasdaq listing even though it has yet to produce a viable product. The company plans to transform itself into a metaverse business, providing computing power for gaming and entertainment.
A metaverse is a new online environment that is developing on the blockchain. Users can create avatars and own digital properties in these virtual realms, sometimes referred to as the “next-generation Internet” or Web3 applications.
The two main shareholders of Nano Labs are co-founders Kong and Sun Qifeng, with a 32.8% and 22.3% stake, respectively. Kong was previously the co-chairman and a director at rival Canaan, which is the first cryptocurrency mining rig manufacturer to go public in the United States in November 2019. In August 2020, he left Canaan amid a corporate power struggle. , according to reports from China then.
Nano Labs products are used to mine cryptocurrencies such as Bitcoin (BTC), Ether (ETH), and Filecoin (FIL). In 2020, the company’s revenue came solely from customers based in China. To expand overseas sales, it established a subsidiary in Singapore last year.
After Beijing cracked down on cryptocurrency activities in May 2021, China, previously the world’s largest cryptocurrency mining location, has seen some activities go underground. In July of last year, the hash rate briefly hit zero, a metric of the network’s computing power to validate transactions and create new digital assets.
Even if the IPO is successful, Nano Labs is in danger of being delisted. If a US audit regulator does not examine Chinese accounts for three years, mainland Chinese companies could be delisted from US markets in 2023. Nano Labs claimed it would face this issue as a result of audit work carried out by the offices of your accounting firm in China.
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