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1、2022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm1/239F-1/A 1 d204090df1a.htm AMENDMENT NO.6 TO FORM F-1Table of ContentsAs filed with the Securities and Exchange Commission on November 22,2022Registration No. SECURITIES A
2、ND EXCHANGE COMMISSIONWashington,D.C.20549 Amendment No.6toFORM F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 Intchains Group Limited(Exact name of registrant as specified in its charter)Not Applicable(Translation of Registrants name into English)Cayman Islands 3674 Not Applicable(State o
3、r Other Jurisdiction ofIncorporation or Organization)(Primary Standard IndustrialClassification Code Number)(I.R.S.EmployerIdentification Number)c/o 9/F,A Block,No.333 Haiyang No.1 Road,Lingang Science and Technology Park,Pudong New Area,Shanghai,201306,the Peoples Republic of China+86 021 58961080(
4、Address,including zip code,and telephone number,including area code,of registrants principal executive offices)Puglisi&Associates850 Library Avenue,Suite 204 Newark,Delaware 19711+1 302-738-6680(Name,address,including zip code,and telephone number,including area code,of agent for service)Copies to:N
5、ing Zhang,Esq.Louise L.Liu,Esq.Morgan,Lewis&Bockiusc/o Suites 1902-09,19th FloorEdinburgh Tower,The Landmark15 Queens Road CentralHong Kong,SAR+852 3551 8500 Lawrence Venick,Esq.Loeb&Loeb LLP2206-19 Jardine House1 Connaught Place,CentralHong Kong,SAR+852 3923 1111 Approximate date of commencement of
6、 proposed sale to the public:As soon as practicable after the effective date of this registration statementIf any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of1933,check the following box.If this Fo
7、rm is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendm
8、ent filed pursuant to Rule 462(c)under the Securities Act,check the following box and list the Securities Actregistration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the Securitie
9、s Act,check the following box and list the Securities Actregistration statement number of the earliest effective registration statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.Emerging grow
10、thcompany If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registrant has electednot to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7
11、(a)(2)(B)of theSecurities Act.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board to its AccountingStandards Codification after April 5,2012.The Registrant hereby amends this registration statement on such date or dates as may
12、 be necessary to delay its effective date until theRegistrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with2022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0001193125222
13、90394/d204090df1a.htm2/239Section 8(a)of the Securities Act of 1933,as amended or until the registration statement shall become effective on such date as the Securities andExchange Commission,acting pursuant to such Section 8(a),may determine.2022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Ar
14、chives/edgar/data/1895597/0000394/d204090df1a.htm3/239Table of ContentsThe information in this preliminary prospectus is not complete and may be changed.We may not sell these securities until theregistration statement filed with the Securities and Exchange Commission is effective.This pre
15、liminary prospectus is not anoffer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where such offer or sale isnot permitted.SUBJECT TO COMPLETIONPRELIMINARY PROSPECTUS DATED November 22,20223,575,000 American Depositary Shares Intchains Group Li
16、mitedRepresenting 7,150,000 Class A Ordinary Shares This is the initial public offering of American depositary shares,or ADSs,of Intchains Group Limited.We are offering 3,575,000 ADSs.Each ADS represents twoClass A ordinary shares,par value US$0.000001 per share.Prior to this offering,there has been
17、 no public market for the ADSs or our Class A ordinary shares.We anticipate that the initial public offering price of the ADSswill be between US$7.00 and US$9.00 per ADS.Upon the completion of this offering,our outstanding share capital will consist of Class A ordinary shares and Class B ordinary sh
18、ares,and we will be a“controlledcompany”as defined under the Nasdaq Stock Market Rules because our co-founders,namely,Mr.Qiang Ding and Mr.Chaohua Sheng,will beneficially own all of ourissued Class B ordinary shares and will be able to exercise approximately 91.60%of the total voting power of our is
19、sued and outstanding share capital immediatelyfollowing the completion of this offering,assuming that the underwriters do not exercise their over-allotment option to purchase additional ADSs.As a“controlledcompany”,we are permitted to elect not to comply with certain corporate governance requirement
20、s.If we rely on these exemptions,you will not have the sameprotection afforded to shareholders of companies that are subject to these corporate governance requirements.Holders of Class A ordinary shares and Class B ordinaryshares have the same rights except for voting and conversion rights.Each Clas
21、s A ordinary share is entitled to one vote,and each Class B ordinary share is entitled to tenvotes,subject to certain conditions,and is convertible into one Class A ordinary share at any time by the holder thereof.Class A ordinary shares are not convertible intoClass B ordinary shares under any circ
22、umstances.We have applied to have our ADSs listed on the Nasdaq Capital Market,or Nasdaq,under the symbol“ICG”.At this time,Nasdaq has not yet approved ourapplication to list our ADSs.The closing of this offering is conditioned upon Nasdaqs final approval of our listing application,and there is no g
23、uarantee or assurancethat our ADSs will be approved for listing on Nasdaq.We are an“emerging growth company”as defined in the Jumpstart Our Business Act of 2012,as amended,and are eligible for reduced public company reportingrequirements.Investing in the ADSs involves risks.See“Risk Factors”beginnin
24、g on page 16 of this prospectus.We are not a Chinese operating company but a CaymanIslands holding company with operations conducted by our subsidiaries based in China.The“Company”and“our Company”refer to Intchains GroupLimited,a Cayman Islands company.“We,”“us,”and“our”refer to Intchains Group Limi
25、ted and its subsidiaries.We currently conduct our business throughJerryken Intelligent Technology(Shanghai)Co.,Ltd.,or Jerryken Shanghai,and Shanghai Intchains Technology Co.,Ltd.,or Shanghai Intchains,each anindirect wholly owned subsidiary of the Company,and two operating subsidiaries wholly owned
26、 by Shanghai Intchains.All of these four operating subsidiariesare established under the laws of the PRC.This operating structure may involve unique risks to investors.Under relevant PRC laws and regulations,foreigninvestors are permitted to own 100%of the equity interests in a PRC-incorporated comp
27、any engaged in the business of IC design.However,the PRCgovernment may implement changes to the existing laws and regulations in the future,which may result in the prohibition or restriction of foreign investorsfrom owning equity interests in our PRC operating subsidiaries.See“Risk FactorsRisks Rela
28、ting to Doing Business in the PRCThe Chinese governmentmay intervene in or influence our operations at any time,which could result in a material change in our operations and significantly and adversely impact thevalue of our ADSs”for a detailed discussion.There are significant legal and operational
29、risks associated with being based in or having the majority ofoperations in China,including that changes in the legal,political and economic policies of the Chinese government,the relations between China and the UnitedStates,or Chinese or U.S.regulations may materially and adversely affect our busin
30、ess,financial condition and results of operations.Any such changes couldsignificantly limit or completely hinder our ability to offer or continue to offer our securities to investors,and could cause the value of our securities tosignificantly decline or become worthless.Recent statements made and re
31、gulatory actions undertaken by Chinese government,such as the Opinions on StrictlyCracking Down on Illegal Securities Activities issued on July 6,2021 by the Chinese government,and any other future laws and regulations could significantlylimit or completely hinder our ability to conduct our business
32、,accept foreign investments,or list on an U.S.or other foreign exchange.Our auditor,which isbased in New York,is currently subject to inspection by the PCAOB at least every three years.However,our auditors China affiliate is located in,andorganized under the laws of,the PRC.On December 16,2021,the P
33、CAOB issued a report on its determinations that it is unable to inspect or investigatecompletely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC authorities inthose jurisdictions.On August 26,2022,the PCAOB entered into a St
34、atement of Protocol with the China Securities Regulatory Commission and the Ministry ofFinance of the PRC and,as summarized in the“Statement on Agreement Governing Inspections and Investigations of Audit Firms Based in China and HongKong”published on the U.S.Securities and Exchange Commissions offic
35、ial website,the parties agreed to the following:(i)in accordance with the Sarbanes-Oxley Act of 2002,or the Sarbanes-Oxley Act,the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation;(ii)thePCAOB shall have direct access to interview or take testimony
36、from all personnel of the audit firms whose issuer engagements are being inspected orinvestigated;(iii)the PCAOB shall have the unfettered ability to transfer information to the SEC,in accordance with the Sarbanes-Oxley Act;and(iv)thePCAOB inspectors shall have access to complete audit work papers w
37、ithout any redactions,with view-only procedures for certain targeted pieces ofinformation such as personally identifiable information.The PCAOB is required to reassess its determinations as to whether it is able to carry out inspectionand investigation completely and without obstruction by the end o
38、f 2022.We cannot assure you that we will not be identified by the SEC under the HoldingForeign Companies Accountable Act,or the HFCA Act,as an issuer that has retained an auditor that has a branch or office located in a foreign jurisdictionthat the PCAOB determines it is unable to inspect or investi
39、gate completely because of a position taken by an authority in that foreign jurisdiction.In addition,there can be no assurance that,if we have a“non-inspection”year,we will be able to take any remedial measures.If any such event were to occur,trading inour securities could in the future be prohibite
40、d under the HFCA Act and,as a result,we cannot assure you that we will be able to maintain the listing of theADRs on Nasdaq or that you will be allowed to trade the ADRs in the United States on the“over-the-counter”markets or otherwise.Should the ADRs becomenot listed or tradeable in the United Stat
41、es,the value of the ADRs could be materially affected.See“Risk FactorsRisks Relating to Doing Business in thePRC”for a detailed discussion.Intchains Group Limited holds all of the equity interests in its PRC subsidiaries through subsidiaries incorporated in the British Virgin Islands,or BVI,andHong
42、Kong.As we have a direct equity ownership structure,we do not have any agreement or contract between our Company and any of its subsidiaries thatare typically seen in a variable interest entity structure.Within our direct equity ownership structure,funds from foreign investors can be directly transf
43、erredto our PRC subsidiaries by way of capital injection or in the form of a shareholder loan from Intchains Group Limited following this offering.If the Companyplans to distribute dividends to its shareholders,our PRC operating subsidiaries will transfer the funds to the Company through our subsidi
44、aries incorporatedin the BVI and Hong Kong,and the Company will then distribute dividends to all shareholders in proportion to the shares they hold,regardless of thecitizenship or domicile of the shareholders.For the three years ended December 31,2019,2020 and 2021 and the nine months ended Septembe
45、r 30,2021 and2022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm4/2392022,except for unsecured and interest-free inter-company funding of RMB11,040,000 transferred between our PRC subsidiaries in connection with ourpurchase of a 17.51
46、%of equity interest in Shanghai Intchains Technology Co.,Ltd and inter-company transactions that occurred in the ordinary course ofbusiness,no cash or other asset transfers occurred among Intchains Group Limited and its subsidiaries,and no dividends or distributions from a subsidiarywere made to Int
47、chains Group Limited or other investors.See“Corporate History and Structure”for additional details.Neither the United States Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed uponthe accuracy or adequacy of this prospectus.Any
48、representation to the contrary is a criminal offense.Per ADS TotalInitial public offering price US$US$Underwriting discount and commissions(1)US$US$Proceeds,before expenses,to us US$US$(1)In addition to the underwriting discounts listed above,we have agreed to issue,upon closing of this offering,war
49、rants to Maxim Group LLC(or its permittedassignees)to purchase a number of our ADSs equal to an aggregate of three percent(3.0%)of the total number of ADSs sold in this offering,or the UnderwritersWarrants.The Underwriters Warrants will have an exercise price equal to 125%of the offering price of th
50、e ADSs sold in this offering and may be exercised on acashless basis.The registration statement of which this prospectus is a part also covers the Underwriters Warrants and the ADSs representing our Class A ordinaryshares issuable upon the exercise thereof.See“Underwriting”for additional information
51、 regarding total underwriter compensation.The underwriters have an option to purchase up to an aggregate of 536,250 additional ADSs from us at the initial public offering price,less underwriting discountsand commissions.The underwriters expect to deliver the ADSs against payment in U.S.dollars on ,2
52、022.Maxim Group LLCProspectus dated ,20222022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm5/239Table of ContentsTABLE OF CONTENTS Page Prospectus Summary 1 The Offering 11 Summary Consolidated Financial and Operating Data 13 Risk Fa
53、ctors 16 Special Note Regarding Forward-Looking Statements and Industry Data 56 Use of Proceeds 57 Dividend Policy 58 Capitalization 59 Dilution 61 Enforcement of Civil Liabilities 63 Corporate History and Structure 65 Selected Consolidated Financial and Operating Data 67 Managements Discussion and
54、Analysis of Financial Condition and Results of Operations 70 Industry Overview 88 Business 97 Regulation 109 Management 121 Principal Shareholders 128 Related Party Transactions 131 Description of Share Capital 132 Description of American Depositary Shares 142 Shares Eligible for Future Sale 152 Tax
55、ation 154 Underwriting 161 Expenses Relating to this Offering 172 Legal Matters 173 Experts 174 Where You Can Find More Information 175 Index to Consolidated Financial Statements F-1 You should rely only on the information contained in this prospectus or in any related free writing prospectus that w
56、e filed with the Securities andExchange Commission.We have not authorized anyone to provide any information other than that contained in this prospectus or in any free writingprospectus prepared by or on our behalf or to which we have referred you.We take no responsibility for,and can provide no ass
57、urance as to thereliability of,any other information that others may give you.We are offering to sell,and seeking offers to buy,the ADSs only in jurisdictions wheresuch offers and sales are permitted.The information contained in this prospectus is accurate only as of the date of this prospectus,rega
58、rdless of the timeof delivery of this prospectus or the sale of any ADS.We have not taken any action to permit a public offering of the ADSs outside the United States or to permit the possession or distribution of thisprospectus outside the United States.Persons outside the United States who came in
59、to possession of this prospectus must inform themselves about andobserve any restrictions relating to the offering of the ADSs and the distribution of this prospectus outside of the United States.Until ,2022(the 25th day after the date of this prospectus),all dealers that buy,sell,or trade ADSs,whet
60、her or not participatingin this offering,may be required to deliver a prospectus.This is in addition to the obligation of dealers to deliver a prospectus when acting asunderwriters and with respect to their unsold allotments or subscriptions.i2022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Ar
61、chives/edgar/data/1895597/0000394/d204090df1a.htm6/239Table of Contents2022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm7/239Table of Contents2022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895
62、597/0000394/d204090df1a.htm8/239Table of ContentsPROSPECTUS SUMMARYThis summary highlights selected information appearing elsewhere in this prospectus and does not contain all of the information that youshould consider in making your investment decision.You should carefully read this enti
63、re prospectus,including the“Risk Factors”section and“Managements Discussion and Analysis of Financial Condition and Results of Operations”section and the financial statements and the relatednotes,before deciding whether to invest in our ADSs.This prospectus contains information from an industry repo
64、rt commissioned by us andprepared by Frost&Sullivan(Beijing)Inc.,Shanghai Branch Co.,or Frost&Sullivan,an independent third-party research firm,to provideinformation regarding our industry and market position in mainland China.We refer to this report as the Frost&Sullivan report.OverviewWe are a pro
65、vider of integrated solutions consisting of high-performance computing ASIC chips and ancillary software and hardware forblockchain applications.We utilize a fabless business model and specialize in the front-end and back-end of IC design,which are the majorcomponents of the IC product development c
66、hain.We have established strong supply chain management with a leading foundry,which helps toensure our product quality and stable production output.Our products consist of high-performance computing ASIC chips that have high computing power and superior power efficiency as well asancillary software
67、 and hardware,which cater to the evolving needs of the blockchain industry.We have built a proprietary technology platformnamed“Xihe”Platform,which allows us to develop a wide range of ASIC chips with high efficiency and scalability.We design our ASIC chipsin-house,which enables us to leverage propr
68、ietary silicon data to deliver products reflecting the latest technological developments ahead of ourcompetitors.As of September 30,2022,we had completed a total of eight tape-outs using our“Xihe”Platform for 22nm ASIC chips,achieving a100%success rate for all our tape-outs.Our strong commitment to
69、advanced research and development enables us to innovate continuously and create ASIC chips with superiorperformance to power ratio at reasonable cost.According to Frost&Sullivan,we have a leading market share in ASIC chips designed for severalkey blockchain algorithms including Blake2bsha3,sha512MD
70、160,Cryptonight V4,Eaglesong and Blake2s,in terms of the accumulativecomputing power sold for the years ended December 31,2019,2020 and 2021.We will continue to devote significant resources to design and tailorour ASIC chips for use in high-technology applications.As a result of fast-increasing mark
71、et demand for our products,we have been growing rapidly.Our total revenue increased fromRMB35.8 million for 2019 to RMB54.6 million for 2020,and further increased significantly to RMB631.8 million(US$88.8 million)for 2021.Our total revenue increased significantly from RMB330.3 million for the nine m
72、onths ended September 30,2021 to RMB440.1 million(US$61.9million)for the nine months ended September 30,2022.We recognized net loss of RMB3.0 million for 2019,net income of RMB8.2 million for2020 and net income of RMB450.1 million(US$63.3 million)for 2021.Our net income increased significantly from
73、RMB251.6 million for thenine months ended September 30,2021 to RMB342.5 million(US$48.2 million)for the nine months ended September 30,2022.Our Competitive StrengthsWe believe that the following strengths have contributed to our success and will continue to differentiate us from our competitors:Lead
74、ing fabless provider of high-performance computing ASIC chips for several key blockchain algorithms 12022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm9/239Table of Contents Innovative technology platform enabling fast time-to-market
75、 product launch and higher gross profit margin Broad product portfolio tailored to capture market growth potential Leading provider of high-performance computing ASIC chips for blockchain algorithms used by individual end users Close and stable relationships with our major suppliers Visionary and ex
76、perienced management team as well as talented research and development personnelOur StrategiesWe intend to become a leading provider of integrated solutions that include both high-performance computing chips and advanced computingsystems and structures.Through our research and development efforts,we
77、 plan to integrate general computing power and specialized computingpower represented by ASIC by way of enhancing computing systems and structures.We intend to pursue the following strategies:Continue to develop and iterate our“Xihe”Platform and“Wangshu”Platform to maintain our advantages in technol
78、ogy developmentand diversify our product offerings Develop software systems based on high-performance computing chips to achieve synergistic development of high-performancecomputing chips and software systems Expand our overseas operations Strengthen our talent poolSummary of Risk FactorsInvesting i
79、n our ADSs involves a high degree of risk.You should carefully consider the risks and uncertainties summarized below,the risksdescribed under the“Risk Factors”section beginning on page 16,including the risks described under the subsections headed“Risks Relating toOur Business and Industry”,“Risks Re
80、lating to Doing Business in the PRC”and“Risks Relating to the ADSs and this Offering”,and the otherinformation contained in this prospectus before you decide whether to purchase our ADSs.We face risks and uncertainties in realizing our business objectives and executing our strategies,including:There
81、 is no assurance that a cryptocurrency will maintain its long-term value,and volatility in the market prices of cryptocurrenciesmay adversely affect our business and results of operations.The industry in which we operate is characterized by constant changes.If we fail to innovate or to provide produ
82、cts that meet theexpectations of our customers,we may be unable to attract new customers or retain existing customers,and as a result our businessand results of operations may be adversely affected;We are subject to risks associated with legal,political or other conditions or developments regarding
83、holding,using or mining ofcryptocurrencies and related products and services,which could negatively affect our business,financial condition,and results ofoperations;We derive a significant portion of our revenue from our ASIC chips.If the market for ASIC chips used in cryptocurrency miningmachines c
84、eases to exist or diminishes significantly,our business and results of operations would be materially harmed.Our ASIC chips business depends mainly on supplies from a single third-party foundry,and any failure to obtain sufficient foundrycapacity from this foundry would significantly delay the shipm
85、ent of our products;22022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm10/239Table of Contents We may be unable to make the substantial investments in research and development that are required to remain competitive in ourbusiness.If
86、 we fail to adequately protect our intellectual property rights,our ability to compete effectively or to defend ourselves from litigationcould be impaired,which could reduce our total revenue and increase our costs;The loss of any member of our senior management team,or our failure to attract,train
87、and retain qualified personnel,especially ourresearch and development personnel,could impair our ability to grow our business and effectively execute our business strategy;Our research and development activities may not result in the successful development of new products;Our ADSs may be delisted un
88、der the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors or theiraffiliates that are located in China.The delisting of our ADSs,or the threat of such delisting,may materially and adversely affect thevalue of your investment.Additionally,the inability of the PCAOB
89、to conduct inspections deprives our investors of the benefits ofsuch inspections;As a business operating in China,we are subject to the laws and regulations of the PRC,which can be complex and evolve rapidly.The PRC government has the power to exercise significant oversight and discretion over the c
90、onduct of our business,and theregulations to which we are subject may change rapidly and with little notice to us or our shareholders.New regulations and policies,which may be adopted with little notice,could result in a material change in our operations and/or the value of our ADSs;Recent statement
91、s by the Chinese government have indicated an intent to exert more oversight and control over offerings that areconducted overseas and/or foreign investments in China based issuers.Although our business is not of the type currently subject togovernment review in China prior to a foreign securities o
92、ffering,any future action by the PRC government expanding the categoriesof industries and companies whose foreign securities offerings are subject to review by the PRC government could significantly limitor completely hinder our ability to offer or continue to offer securities to investors and could
93、 cause the value of such securities tosignificantly decline or be worthless;The approval of the CSRC,or CAC or other Chinese regulatory agencies may be required in connection with this offering underChinese law,and,if required,we cannot predict whether we will be able to obtain such approval or comp
94、lete such filing;The Chinese government may intervene in or influence our operations at any time,which could result in a material change in ouroperations and significantly and adversely impact the value of our ADSs.The Chinese government has significant oversight anddiscretion over the conduct of ou
95、r business and may intervene or influence our operations as the government deems appropriate tofurther regulatory,political and societal goals;Changes to and uncertainties in the legal system of the PRC may have a material adverse impact on our business,financial conditionand results of operations.L
96、egal protections available to you under the legal system of the PRC may be limited;You may experience difficulties enforcing judgments against us and our management in the PRC;and Our corporate structure may restrict our ability to receive dividends from,and transfer funds to,our PRC operating subsi
97、diaries,whichcould restrict our ability to act in response to changing market conditions in a timely manner.32022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm11/239Table of ContentsCorporate History and StructureWe conduct our opera
98、tions in China through our subsidiaries incorporated under the laws of the PRC.In this offering,investors will bepurchasing ADSs representing Class A ordinary shares issued by our Cayman Islands holding company,Intchains Group Limited,which is theultimate owner of 100%of the equity interests in the
99、PRC subsidiaries.Our Cayman Islands holding company does not conduct operations.Webegan our operations in December 2017 when Shanghai Intchains Technology Co.,Ltd.,or Shanghai Intchains,was founded in Shanghai,China.With the growth of our business and in order to facilitate international capital rai
100、sing,we underwent an offshore reorganization in the secondhalf of 2021.Intchains Group Limited was incorporated in the Cayman Islands as our offshore holding company in June 2021 and became theultimate holding company of our operating subsidiaries in December 2021.The structure of cash flows within
101、our corporate organization,together with a summary of the applicable PRC regulations,is as follows:1.We do not have a variable interest entities structure,or VIE structure.Intchains Group Limited directly controls Jerryken IntelligentTechnology(Shanghai)Co.,Ltd.,or WFOE,as well as Shanghai Intchains
102、 and our other two operating subsidiaries in the PRC through its whollyowned subsidiaries,namely,Intchains BVI and Intchains HK.See“Corporate History and Structure”for additional details.2.Within our direct holding structure,the cross-border transfer of funds within our corporate group is legal and
103、compliant with the laws andregulations of the PRC.After foreign investors funds enter into Intchains Group Limited at the close of this offering,the funds can be directlytransferred to WFOE by way of capital injection;WFOE can also transfer the funds into the other PRC subsidiaries of Intchains Grou
104、p Limitedthrough a capital injection or by providing a shareholder loan after the conversion of currency from U.S.dollar to RMB in accordance with thePRC foreign exchange laws and regulations.If the Company intends to distribute dividends,our PRC subsidiaries will transfer the dividends to Intchains
105、 HK in accordance with the lawsand regulations of the PRC including but not limited to laws and regulations on withholding tax on dividend distributions,Intchains HK will thentransfer the dividends to Intchains Group Limited through Intchains BVI,then the dividends will be distributed from Intchains
106、 Group Limited to allshareholders respectively in proportion to the shares they hold,regardless of whether the shareholders are U.S.investors or investors in othercountries or regions.3.For the three years ended December 31,2019,2020 and 2021 and the nine months ended September 30,2022,except for un
107、secured andinterest-free inter-company funding of RMB11,040,000 transferred from Shanghai Intchains to WFOE for its settlement on the purchase of a17.51%equity interest in Shanghai Intchains(see“Corporate History and Structure”for details of such share transfer)and inter-companytransactions that occ
108、urred in the ordinary course of business,no cash or other asset transfers occurred among Intchains Group Limited and itssubsidiaries;and no dividends or distributions of a subsidiary were made to Intchains Group Limited or other investors.For the foreseeable future,Intchains Group Limited intends to
109、 retain most,if not all,of its available funds and any future earnings to operate and expand its business.We haveno intention to declare or pay any dividends in the near future on our ordinary shares or the ADSs representing our ordinary shares.4.Our PRC subsidiaries ability to distribute dividends
110、is based upon their distributable earnings.Current PRC regulations permit our PRCsubsidiaries to pay dividends to their respective shareholders only out of their accumulated profits,if any,determined in accordance with PRCaccounting standards and regulations.In addition,each of our PRC subsidiaries
111、is required to set aside at least 10%of its after-tax profits each year,if 42022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm12/239Table of Contentsany,to fund a statutory reserve until such reserve reaches 50%of each of their regis
112、tered capital.These reserves are not distributable as cashdividends.See“Regulations Relating to Dividend Distributions”for more information.To address persistent capital outflows and the RMBs depreciation against the U.S.dollar in the fourth quarter of 2016,the Peoples Bank ofChina and the State Adm
113、inistration of Foreign Exchange of the Peoples Republic of China,or SAFE,implemented a series of capital controlmeasures,including stricter vetting procedures for mainland China-based companies to remit foreign currency for overseas acquisitions anddividend payments.The Notice on Improving the Check
114、 of Authenticity and Compliance to Further Promote Foreign Exchange Controlpromulgated by SAFE in January 2017,stipulates several capital control measures with respect to outbound remittances of profits from domesticentities to offshore entities,including the following:(1)under the principle of genu
115、ine transaction,banks shall check board resolutions regardingprofit distributions,the original version of tax filing records and audited financial statements;and(2)domestic entities shall hold income to accountfor previous years losses before remitting the profits.Moreover,domestic entities are requ
116、ired to make detailed explanations of sources of capitaland utilization arrangements,and to provide board resolutions,contracts and other proof when completing the registration procedures in connectionwith an outbound investment.The PRC government may continue to strengthen its capital controls and
117、our PRC subsidiaries dividends and otherdistributions may be subject to tightened scrutiny in the future.The PRC government also imposes controls on the conversion of RMB into foreigncurrencies and the remittance of currencies out of the PRC.As a result,we may experience difficulties in completing t
118、he administrative proceduresnecessary to obtain and remit foreign currency for the payment of dividends from our profits,if any.Furthermore,if our subsidiaries in the PRCincur debt on their own in the future,the instruments governing the debt may restrict their ability to pay dividends or make other
119、 payments.In addition,the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10%will be applicable todividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC centralgovernment
120、and the governments of other countries or regions where the non-PRC resident enterprises are tax resident.Pursuant to the taxagreement between mainland China and the Hong Kong Special Administrative Region,the withholding tax rate in respect of the payment ofdividends by a PRC enterprise to a Hong K
121、ong enterprise may be reduced to 5%from a standard rate of 10%.However,if the relevant taxauthorities determine that our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment,the relevant taxauthorities may adjust the favorable withholding tax in the future.A
122、ccordingly,there is no assurance that the reduced 5%withholding rate willapply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries.This withholding tax will reduce the amount of dividends wemay receive from our PRC subsidiaries.We have been advised by Jingtian&Gongcheng,our P
123、RC legal adviser,that(i)we have obtained all necessary permissions or approvals andauthorizations in mainland China in all material aspects in relation to conducting our IC design business operations in mainland China;and(ii)weare not required to obtain any permission or approval from any Chinese au
124、thority to issue securities to foreign investors or in connection with thisoffering under Chinese laws or regulations in effect.Except for the business licenses issued by the local branch of the State Administration forMarket Regulation,which our PRC subsidiaries have obtained and are in full force
125、and effect as of the date of this prospectus,Intchains GroupLimited and our PRC subsidiaries are not required to obtain other licenses,approvals or permits to conduct our IC design business operations inmainland China.To the best of our knowledge,as of the date of this prospectus,there are no laws o
126、r regulations that are or will be adopted in the near futureby PRC government authorities that would prevent us from maintaining the business licenses we have obtained or would require us to obtainadditional licenses or qualifications in order to operate our IC design business.52022/12/13Amendment N
127、o.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm13/239Table of ContentsOur Corporate StructureThe chart below illustrates our corporate structure as of the date of this prospectus:For a more detailed description of our history and a diagram that illust
128、rates our current corporate structure as of the date of this prospectus,see“Corporate History and Structure.”Corporate InformationThe principal executive offices of our operating subsidiaries are located at 9/F,A Block,No.333 Haiyang No.1 Road,Lingang Science andTechnology Park,Pudong New Area,Shang
129、hai,201306,the Peoples Republic of China.Our telephone number at this address is+86 021 58961080 and our fax number is+86 021 5896 1085.Our registered office in the Cayman Islands is located at Cricket Square,Hutchins Drive,P.O.Box 2681,Grand Cayman,KY1-1111,CaymanIslands.Our agent for service of pr
130、ocess in the United States is Puglisi&Associates.Investors should submit any inquiries to the address and telephone number of our principal executive offices.Our main website .The information contained on our website is not a part of this prospectus.Implications of Being an Emerging Growth CompanyAs
131、 a company with less than US$1.235 billion in revenue for our last fiscal year,we qualify as an“emerging growth company”pursuant tothe Jumpstart Our Business Startups Act of 2012,or the JOBS Act.An emerging growth company may take advantage of specified reducedreporting and other requirements compar
132、ed 62022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm14/239Table of Contentsto those that are otherwise applicable generally to public companies.These provisions include exemption from the auditor attestation requirementunder Sectio
133、n 404 of the Sarbanes-Oxley Act of 2002,or Section 404 in the assessment of the emerging growth companys internal control overfinancial reporting.The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financialaccounting standards until such date t
134、hat a private company is otherwise required to comply with such new or revised accounting standards.Wehave elected to take advantage of the benefits of this extended transition period provided under the JOBS Act for complying with new or revisedaccounting standards.As a result,our operating results
135、and financial statements may not be comparable to the operating results and financialstatements of other companies who have adopted the new or revised accounting standards.We will remain an emerging growth company until the earliest of(i)the last day of the fiscal year during which we have total ann
136、ual grossrevenue of at least US$1.235 billion;(ii)the last day of our fiscal year following the fifth anniversary of the completion of this offering;(iii)thedate on which we have,during the preceding three-year period,issued more than US$1.0 billion in non-convertible debt;or(iv)the date on whichwe
137、are deemed to be a“large accelerated filer”under the Securities Exchange Act of 1934,as amended,or the Exchange Act,which would occur ifthe market value of the ADSs that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completedsecond fiscal quarter.
138、Once we cease to be an emerging growth company,we will not be entitled to the exemptions provided in the JOBS Actdiscussed above.We are an“emerging growth company”as the term is used in the JOBS Act and,as such,we are subject to certain reduced publiccompany reporting requirements.See the applicable
139、 disclosure under the section captioned“Risk FactorsRisks Relating to the ADSs and thisOffering.”Implications of Being a Foreign Private IssuerWe are a foreign private issuer within the meaning of the rules under the Exchange Act,and as such we are exempt from certain provisions ofthe securities rul
140、es and regulations in the United States that are applicable to U.S.domestic issuers.Moreover,the information we are required tofile with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S.domestic issuers.Inaddition,as a company inc
141、orporated in the Cayman Islands,we are permitted to adopt certain home country practices in relation to corporategovernance matters that differ significantly from the Nasdaq corporate governance listing standards.These practices may afford less protection toshareholders than they would enjoy if we c
142、omplied fully with the Nasdaq corporate governance listing standards.Currently,we plan to rely onhome country practices with respect to our corporate governance after we complete this offering.Conventions That Apply to This ProspectusExcept otherwise indicated or the context otherwise requires,refer
143、ences in this prospectus to:“ADRs”are to the American depositary receipts,which,if issued,evidence our ADSs;“ADSs”are to our American depositary shares,each of which represents two Class A ordinary shares;“ASICs”are to application-specific ICs,meaning ICs designed for a specific application;“CAGR”ar
144、e to compound average growth rate;“China”or the“PRC”,in each case,are to the Peoples Republic of China,including Hong Kong,Macau and Taiwan.The term“Chinese”has a correlative meaning for the purpose of this prospectus.When used in the case of laws and regulations,of“China”or“the PRC”,it refers to on
145、ly such laws and regulations of mainland China;“Class A ordinary shares”are to our class A ordinary shares,par value US$0.000001 per share;72022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm15/239Table of Contents “Class B ordinary s
146、hares”are to our class B ordinary shares,par value US$0.000001 per share;“EIT”are to enterprise income tax;“IC”or“chips”are to integrated circuits;“IoT”are to Internet-of-Things,the extension of internet connectivity into physical devices and everyday objects;“iterate”or“iteration”are to the act of
147、repeating a process,either to generate an unbounded sequence of outcomes,or with the aim ofapproaching a desired goal,target or result;“mainland China”are to the Peoples Republic of China,excluding,solely for the purpose of this prospectus,Hong Kong,Macau andTaiwan.The term“mainland Chinese”has a co
148、rrelative meaning for the purpose of this prospectus;“nm”are to nanometer;“ordinary shares”or“shares”prior to the completion of this offering are to our ordinary shares of par value US$0.000001 per share,and upon and after the completion of this offering are to our Class A ordinary shares and Class
149、B ordinary shares;“PoW”are to proof-of-work;“Risc-V”are to an open source instruction set architecture,which is a set of instructions that describes the way in which software talksto an underlying processor,and Risc-Vs open source nature means that anyone can build a processor to support it without
150、paying highroyalty fees;“RMB”and“Renminbi”are to the legal currency of mainland China;“SoC”are to a chip that integrates all components of a computer or other electronic systems;“tape-out”are to the final result of the design process for ICs when the graphic for the photomask of the IC is sent to th
151、e fabricationfacility,and a successful tape-out means all the stages in the design and verification process of ICs have been completed;“US$”and“U.S.dollars”are to the legal currency of the United States;“U.S.GAAP”are to generally accepted accounting principles in the United States;and “we,”“us,”“our
152、 company,”“the Group”and“our”are to Intchains Group Limited,a Cayman Islands company and its subsidiaries.Unless otherwise indicated,(a)information in this prospectus assumes that the underwriters do not exercise their over-allotment option topurchase additional ADSs,(b)references in this prospectus
153、 to this offering are to our offering of ADSs pursuant to this prospectus,and(c)information in this prospectus does not include the ordinary shares reserved for future issuance under our share incentive plan.Our reporting currency is RMB.This prospectus contains translations from RMB to U.S.dollars
154、solely for the convenience of the reader.Unless otherwise stated,the translations from RMB to U.S.dollars and from U.S.dollars to RMB in this prospectus were made at a rate ofRMB7.1135 to US$1.00,the exchange rates set forth in the H.10 statistical release of the Federal Reserve Board on September 3
155、0,2022.We makeno representation that the RMB or U.S.dollar amounts referred to in this prospectus could have been or could be converted into U.S.dollars orRMB,as the case may be,at any particular rate or at all.Internet site addresses in this prospectus are included for reference only and the inform
156、ation contained in any website,including our website,is not incorporated by reference into,and does not form part of,this prospectus.82022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm16/239Table of ContentsMarket and Industry DataTh
157、is prospectus contains estimates and information concerning our industry,including our market position and the size and growth rates ofthe markets in which we participate,that are based on industry publications and the reports.This prospectus contains statistical data and estimatespublished by Frost
158、&Sullivan,an independent research firm,for which we paid a fee.This information involves a number of assumptions andlimitations,and you are cautioned not to place undue reliance on these estimates.We have not independently verified the accuracy or completenessof the data contained in these industry
159、reports.The industry in which we operate is subject to a high degree of uncertainty and risk due to a varietyof factors,including those described in the“Risk Factors”section.These and other factors could cause results to differ materially from thoseexpressed in these publications and reports.Industr
160、y publications,research,surveys,studies and forecasts generally state that the information they contain has been obtained fromsources believed to be reliable but that the accuracy and completeness of such information is not guaranteed.Forecasts and other forward-lookinginformation obtained from thes
161、e sources are subject to the same qualifications and uncertainties as the other forward-looking statements in thisprospectus.These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors,including thosedescribed under“Risk Factors”.These and other fa
162、ctors could cause results to differ materially from those expressed in the forecasts or estimatesfrom independent third parties and us.Impact of COVID-19The COVID-19 outbreak has adversely affected(and a significant outbreak of other infectious diseases could result in an additionalwidespread health
163、 crisis that could adversely affect)the economies and financial markets worldwide,and our business could be materially andadversely affected by the COVID-19 outbreak and any such other outbreak.Furthermore,our business may be adversely affected if continuedconcerns relating to COVID-19 continue to r
164、estrict travel,or result in our personnel,vendors and services providers being unavailable to pursuetheir business objectives free of COVID-19 related restrictions.The extent to which COVID-19 impacts our business in the future will depend onfuture developments,which are highly uncertain and cannot
165、be predicted,including new information which may emerge concerning the severity ofCOVID-19 and the actions by different governments to contain COVID-19 or treat its impact,among others.If the disruptions caused byCOVID-19 or other matters of global concern continue for an extended period of time,our
166、 ability to pursue our business objectives may bematerially and adversely affected.In addition,our ability to raise equity and debt financing which may be adversely impacted by COVID-19 andother events,including as a result of increased market volatility,decreased market liquidity and third-party fi
167、nancing being unavailable on termsacceptable to us or at all.Recent Developments Prices of alternative cryptocurrencies have stabilized since September 2022 after experiences declines generally in the second and thirdquarters of 2022.In response to recent shifts in market trends,we have examined the
168、 expected returns of cryptocurrency mining activities,prices ofASIC chips that are used in mining equipment for different alternative cryptocurrencies,and end users demonstrated faith and preferences fordifferent alternative cryptocurrencies,and adjusted our product development and production plans
169、accordingly.We plan to prioritize using ourwafer supplies to manufacture ASIC chips that have relatively high profit margins,which will help maximize our profitability.We also intend toroll out new ASIC chips and blockchain applications during the remainder of 2022 to explore new market opportunitie
170、s.In 2022,many regions in China experienced a resurgence of COVID-19,and local governments of mainland China implemented pandemiccontrol measures that put restrictions on travel and group gatherings.To mitigate the impact on our business,we intend to use more than onefoundry facility operated by our
171、 Foundry Partner as 92022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm17/239Table of Contentswell as explore cooperative opportunities with other established foundries.While we experienced delays in the first half of 2022 ranging fr
172、om oneto four days in custom clearance for ASIC chips from our Foundry Partner and transportation to our outsourced semiconductor assembly andtesting service providers,our operations have returned to normal since the third quarter of 2022.We currently do not expect disruptions to oursupply chain in
173、the foreseeable future.102022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm18/239Table of ContentsTHE OFFERING Offering price:We currently estimate that the initial public offering price will be between US$7.00 andUS$9.00 per ADS.ADS
174、s Offered by us:3,575,000 ADSs(or 4,111,250 ADSs if the underwriters exercise the option to purchaseadditional ADSs in full).ADSs Outstanding Immediately After This Offering3,575,000 ADSs(or 4,111,250 ADSs if the underwriters exercise the option to purchaseadditional 536,250 ADSs in full).Ordinary S
175、hares Outstanding Immediately After ThisOffering124,797,000 ordinary shares,comprised of 59,709,000 Class A ordinary shares and65,088,000 Class B ordinary shares(or 125,869,500 ordinary shares,comprised of60,781,500 Class A ordinary shares and 65,088,000 Class B ordinary shares if theunderwriters ex
176、ercise the option to purchase additional 536,250 ADSs in full).Option to Purchase Additional ADSsWe have granted to the underwriters an option,exercisable for 45 days from the date of thisprospectus,to purchase up to an aggregate of 536,250 additional ADSs at the initial publicoffering price,less un
177、derwriting discounts and commissions,solely for the purpose ofcovering over-allotments.The ADSsEach ADS represents two Class A ordinary shares,par value US$0.000001 per share.The depositary will hold the Class A ordinary shares underlying your ADSs.You will haverights as provided in the deposit agre
178、ement,the form of which is filed as an exhibit to theregistration statement that includes this prospectus.We do not expect to pay any cash dividends on our Class A ordinary shares in theforeseeable future.If,however,we declare dividends on our Class A ordinary shares,thedepositary will pay you the c
179、ash dividends and other distributions it receives on ourClass A ordinary shares,after deducting its fees and expenses in accordance with the termsset forth in the deposit agreement.You may surrender your ADSs to the depositary to withdraw the Class A ordinary sharesunderlying your ADSs.The depositar
180、y will charge you a fee for such an exchange.We may amend or terminate the deposit agreement for any reason without your consent.Ifan amendment becomes effective,you will be bound by the deposit agreement as amended.To better understand the terms of the ADSs,you should carefully read the section in
181、thisprospectus entitled“Description of American 112022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm19/239Table of Contents Depositary Shares.”You should also read the deposit agreement,which is filed as anexhibit to the registration
182、 statement that includes this prospectus.ListingWe have applied to have our ADSs listed on the Nasdaq under the symbol ICG.Our ADSsand ordinary shares will not be listed on any exchange or quoted for trading on anyover-the-counter trading system.Payment and settlementThe underwriters expect to deliv
183、er the ADSs against payment therefor through the facilitiesof the Depository Trust Company on ,2022.Use of ProceedsWe estimate that we will receive net proceeds of approximately US$23.6 million(orUS$27.5 million if the underwriters exercise their option to purchase additional ADSs infull)from this o
184、ffering,assuming an initial public offering price of US$8.00 per ADS,themid-point of the estimated range of the initial public offering price,after deductingestimated underwriter discounts,commissions and estimated offering expenses payable byus.We intend to use our net proceeds from this offering f
185、or(i)the continuing developmentand enhancement of our“Xihe”Platform and“Wangshu”Platform;(ii)the establishmentof research and development centers in China,Singapore and selected locations overseas,research and development projects in cooperation with software companies in China andoverseas,and the e
186、xpansion of our research and development team;(iii)the establishmentof an overseas operating center in Singapore,which will have business operationmanagement functions,end application development capabilities and sales operations;(iv)the purchase of wafers and other raw materials from qualified supp
187、liers;and(v)otherworking capital and general corporate purposes.See“Use of Proceeds”for additionalinformation.Risk FactorsSee“Risk Factors”and other information included in this prospectus for a discussion of therisks you should carefully consider before deciding to invest in our ADSs.DepositaryDeut
188、sche Bank Trust Company Americas.Lock-UpWe,our directors and executive officers and all other existing holders of 5.0%or more ofour outstanding shares have agreed with the underwriters not to offer,issue,sell,encumber,transfer or otherwise dispose of any of our securities,including our ADSs and ordi
189、naryshares for a period of six months after the completion of this offering without the consentof the representatives of the underwriters.See“Underwriting”for more information.122022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm20/23
190、9Table of ContentsSUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATAThe following summary consolidated statements of operations and comprehensive(loss)income data and cash flow data for the years endedDecember 31,2019,2020 and 2021 and summary consolidated balance sheets data as of December 31,2020 a
191、nd 2021 have been derived from ouraudited consolidated financial statements included elsewhere in this prospectus.Our consolidated financial statements are prepared and presentedin accordance with the U.S.GAAP.The following summary consolidated statements of operations and comprehensive(loss)income
192、data and cashflows data for the nine months ended September 30,2021 and 2022,summary consolidated balance sheets data as of September 30,2022,havebeen derived from our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.Our historical results are not n
193、ecessarily indicative of results to be expected for any future period.The following summary consolidatedfinancial data for the periods and as of the dates indicated are qualified by reference to,and should be read in conjunction with,our consolidatedfinancial statements and the related notes and“Man
194、agements Discussion and Analysis of Financial Condition and Results of Operations”includedelsewhere in this prospectus.Summary Consolidated Statements of Operations and Comprehensive(Loss)Income Years ended December 31,For the nine months ended September 30,2019 2020 2021 2021 2022 RMB000 RMB000 RMB
195、000 US$000 RMB000 RMB000 US$000 Net revenue Products revenue 35,816 54,603 631,838 88,822 330,331 440,076 61,865 Total net revenue 35,816 54,603 631,838 88,822 330,331 440,076 61,865 Cost of revenue (29,581)(23,331)(113,955)(16,020)(47,547)(67,030)(9,423)Gross profit 6,235 31,272 517,883 72,802 282,
196、784 373,046 52,442 Operating expenses:Research and development expenses (9,062)(22,481)(53,153)(7,472)(25,416)(38,429)(5,403)Sales and marketing expenses (1)(91)(3,006)(423)(1,846)(2,989)(420)General and administrative expenses (5,036)(3,165)(14,403)(2,025)(5,404)(9,867)(1,387)Total operating expens
197、es (14,099)(25,737)(70,562)(9,920)(32,666)(51,285)(7,210)(Loss)Income from operations:Interest income 16 37 2,518 354 1,146 7,658 1,077 Interest expense and guarantee fee (132)(168)(197)(28)(98)(58)(8)Foreign exchange(loss)/gains,net (55)348 (238)(34)(95)3,566 501 Other income 5,323 2,495 740 104 51
198、9 19,196 2,699(Loss)/Income before income taxexpenses (2,712)8,247 450,144 63,278 251,590 352,123 49,501 Income tax expense (238)9,575 1,346 Net(loss)/income and totalcomprehensive(loss)/income (2,950)8,247 450,144 63,278 251,590 342,548 48,155 Weighted average number ofshares used in per sharecalcu
199、lation(1):Basic and diluted 100,000,000 100,000,000 100,870,300 100,870,300 100,000,000 117,647,000 117,647,000 Net(loss)/earnings per share Basic and diluted (0.03)0.08 4.46 0.63 2.52 2.91 0.41 Note:(1)Retroactively restated to reflect the 1:100 split of our ordinary shares effected on July 8,2022,
200、as described in Note 1 to our consolidatedfinancial statements included in this prospectus.132022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm21/239Table of ContentsSummary Consolidated Balance Sheets As of December 31,As of Septemb
201、er 30,2020 2021 2022 RMB000 RMB000 US$000 RMB000 US$000 ASSETS Current assets:Cash and cash equivalents 19,627 502,420 70,629 703,105 98,841 Accounts receivable 6,530 Inventories 9,481 66,818 9,393 76,598 10,768 Prepayments and other current assets 7,616 38,124 5,360 42,923 6,035 Amount due from a r
202、elated party Total current assets 43,254 607,362 85,382 822,626 115,644 Non-current assets:Property,equipment,and software,net 406 1,623 229 4,441 625 Right of use assets 239 2,275 320 1,566 220 Prepayments on long-term assets 112,856 15,865 Total non-current assets 645 3,898 549 118,863 16,710 Tota
203、l assets 43,899 611,260 85,931 941,489 132,354 LIABILITIES,AND SHAREHOLDERS EQUITY Current liabilities:Accounts payable 621 6,583 926 2,259 318 Short-term debts Contract liabilities 3,002 422 1,115 157 Income tax payable 2,377 334 Lease liabilities 239 934 131 963 135 Amounts due to related parties
204、4,803 Provision for warranty 463 65 385 54 Accrued liabilities and other current liabilities 3,997 20,615 2,898 12,905 1,814 Total current liabilities 9,660 31,597 4,442 20,004 2,812 Non-current liabilities:Lease liabilities 1,267 178 541 76 Other non-current liabilities 46 Total non-current liabili
205、ties 46 1,267 178 541 76 Total liabilities 9,706 32,864 4,620 20,545 2,888 Total shareholders equity 34,193 578,396 81,311 920,944 129,466 Total liabilities and shareholders equity 43,899 611,260 85,931 941,489 132,354 142022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895
206、597/0000394/d204090df1a.htm22/239Table of ContentsSummary Consolidated Statements of Cash Flow Years ended December 31,For the nine months ended September 30,2019 2020 2021 2021 2022 RMB000 RMB000 RMB000 US$000 RMB000 RMB000 US$000 Net cash(used in)provided by operating activities (5,987)
207、15,586 395,420 55,587 220,332 316,209 44,452 Net cash used in investing activities (165)(251)(1,770)(249)(1,070)(115,524)(16,240)Net cash provided by financing activities 3,388 251 89,143 12,532 4,099 Net(decrease)/increase in cash and cash equivalents (2,764)15,586 482,793 67,870 223,361 200,685 28
208、,212 Cash and cash equivalents,at the beginning of year 6,805 4,041 19,627 2,759 19,627 502,420 70,629 Cash and cash equivalents,at the end of year 4,041 19,627 502,420 70,629 242,988 703,105 98,841 Key Operating DataThe following table sets forth the breakdown of revenue,sales volume and average se
209、lling price(per unit)of ASIC chips delivered for theperiods indicated:Years ended December 31,For the nine months ended September 30,2019 2020 2021 2021 2022 Revenue Sales volume Average selling price per unit Revenue Sales volume Average selling price per unit Revenue Sales volume Average selling p
210、rice per unit Revenue Sales volume Average selling price per unit Revenue Sales volume Avseppe (RMB000)(Unit)(RMB)(RMB000)(Unit)(RMB)(RMB000)(Unit)(RMB)(RMB000)(Unit)(RMB)(RMB000)(Unit)(RASICchips ICQ510 3,312 362,000 9.15 15,189 1,308,351 11.61 SIPC100 211 3,500 60.29 884 66,240 13.35 ICQ520 1,313
211、114,789 11.44 ICT560 10,486 622,015 16.86 83,770 1,437,544 58.27 29,437 439,816 66.93 42,793 598,264 ICT570 1,111 34,885 31.85 7,380 74,592 98.94 4,227 49,712 85.03 5,197 34,464 1ICT580 1,075 36,350 29.57 3,858 32,880 ICC590 18,553 123,130 150.68 131,975 1,169,405 112.86 71,744 622,281 115.29 48,924
212、 517,096 ICA585 148,079 328,924 4ICA586 108,092 411,944 262.39 64,097 231,656 276.69 70,797 166,756 4ICA588 206,823 1,706,716 121.18 119,275 894,300 133.37 61,605 533,100 ICA589 22,065 306,952 71.88 16,620 253,560 65.55 5,692 60,756 IAA561 19,148 252,727 ICC551 3,570 43,848 Total 3,523 365,500 9.64
213、48,611 2,305,760 21.08 560,105 5,107,153 109.67 305,400 2,491,325 122.59 409,663 2,568,815 1 152022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm23/239Table of ContentsRISK FACTORSAn investment in the ADSs involves significant risks.
214、You should consider carefully all of the information in this prospectus,including the risksand uncertainties described below,before making an investment in the ADSs.Any of the following risks could have a material and adverse effect on ourbusiness,financial condition and results of operations.Additi
215、onal risks and uncertainties not currently known to us or that we currently deem to beimmaterial may also materially and adversely affect our business,prospects,financial condition,results of operations,cash flows and ability to paydividends,and you may lose all or part of your investment.Risks Rela
216、ting to Our Business and IndustryThere is no assurance that a cryptocurrency will maintain its long-term value,and volatility in the market prices of cryptocurrencies may adverselyaffect our business and results of operations.As a relatively new product based on technologies developed in recent year
217、s,cryptocurrencies have only recently been accepted as a means ofpayment for goods and services by selected industries and in selected markets,and the use of cryptocurrencies by consumers to make payment remainslimited.Additionally,as the value of most cryptocurrencies is not anchored by any reserve
218、 currency or precious metal,nor is it backed by anygovernment or commercial enterprise,the long-term value of cryptocurrencies is uncertain,which may further increase the volatility in cryptocurrencyprices.Banks and other established financial institutions may refuse to process funds for cryptocurre
219、ncy transactions,process wire transfers to or fromcryptocurrency exchanges,or maintain accounts for persons or entities transacting in cryptocurrencies.Meanwhile,a significant portion of cryptocurrency demand is generated by speculators and investors seeking to profit from the short or long termhold
220、ing of cryptocurrencies.The prices of cryptocurrencies may also be impacted by evolving and uncertain regulatory environment and thedevelopment of blockchain technology.According to Frost&Sullivan,the prices of alternative cryptocurrencies have experienced significantfluctuations during their limite
221、d history and may continue to fluctuate significantly in the future.As a result of the foregoing,the prices ofcryptocurrencies have been quite volatile during its limited history.Our business and financial condition highly correlate with market prices of cryptocurrencies.Our ASIC chip is the core co
222、mponent of thecryptocurrency mining machine.We price our ASIC chips with reference to the market price of cryptocurrencies and the expected economic return ofcryptocurrency mining,among other factors.In 2019,2020 and 2021 and the nine months ended September 30,2021 and 2022,respectively,almost allof
223、 our revenue was generated from the sales of ASIC chips for cryptocurrency mining machines.Any wild fluctuations in the market price ofcryptocurrencies may have a material adverse impact on our business,financial condition and results of operations.In addition,if there is a steepincrease in the mark
224、et price of cryptocurrencies,market demand for our ASIC chips is also likely to surge.In the event that our production and servicecapabilities cannot quickly catch up,we may lose our customers and market share.In addition,if market demand increases beyond our expectations,wemay not be able to mainta
225、in an adequate inventory level of our finished goods,and may lose sales and market share to our competitors as a result.On the other hand,if the market price of cryptocurrencies falls significantly,economic returns for mining activities as well as demand for ourASIC chips will likely drop rapidly.We
226、 may be exposed to increased inventory risks due to accumulating excessive inventory of our products or rawmaterials,parts and components for our products.The industry in which we operate is characterized by constant changes.If we fail to innovate or to provide products that meet the expectations of
227、 ourcustomers,we may be unable to attract new customers or retain existing customers,and as a result our business and results of operations may beadversely affected.The industry in which we operate is characterized by constant changes,including rapid technological evolution,continual shifts in custo
228、merdemand,frequent introductions of new products and solutions and 162022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm24/239Table of Contentsconstant emergence of new industry standards and practices.For example,algorithms used for
229、mining a certain cryptocurrency may change from time totime,and our customers may demand ASIC chips with the latest algorithms that meet their requirements.Thus,our success will depend,in part,on ourability to respond to these changes in a cost-effective and timely manner.We need to anticipate the e
230、mergence of new technologies and assess theirmarket acceptance.We also need to invest significant resources in research and development in order to keep our products competitive in the market.However,research and development activities are inherently uncertain,and we might encounter practical diffic
231、ulties in commercializing ourresearch and development results,which could result in excessive research and development expenses or delays.Given the fast pace with whichblockchain technologies have been and will continue to be developed,we may not be able to timely upgrade our technologies in an effi
232、cient andcost-effective manner,or at all.In addition,new developments in deep learning,IoT,computer vision,blockchain and cryptocurrency could render ourproducts obsolete or unattractive.If we are unable to keep up with the technological developments and anticipate market trends,or if new technologi
233、esrender our technologies or solutions obsolete,customers may no longer be attracted to our products.As a result,our business,results of operations andfinancial condition would be materially and adversely affected.As our current ASIC chips are mainly designed for cryptocurrency mining,any limitation
234、 on the usage and adaptation of cryptocurrency and anyactual or perceived adverse development in the cryptocurrency market,which is rapidly and continuously evolving,can adversely affect our results ofoperations.As there is no wide consensus with respect to the value and application of cryptocurrenc
235、y,any future development may continue to affect theprice of cryptocurrency and as a result affect the demand for our current ASIC chips.In addition,any event or rumor that generates negative publicityfor the cryptocurrency industry and market,such as allegations that cryptocurrency is used for money
236、 laundering or other illicit activities,could result inharm to our reputation,which in turn may negatively affect our results of operations.Decentralization,or the lack of control by a central authority,is a key reason that cryptocurrencies have attracted many committed users.However,the decentraliz
237、ed nature of cryptocurrency is subject to growing discussion and suspicion.Individuals,companies or groups,as well ascryptocurrency exchanges that own vast amounts of cryptocurrencies,can affect the market price of cryptocurrency.Furthermore,mining equipmentproduction and mining pool locations are b
238、ecoming centralized.The suspicion about the decentralized nature of cryptocurrency may cause ourcustomers to lose confidence in the prospects of the cryptocurrency industry.This in turn could adversely affect the market demand for our ASIC chipsand our business.We are subject to risks associated wit
239、h legal,political or other conditions or developments regarding holding,using or mining of cryptocurrenciesand related products and services,which could negatively affect our business,financial condition,and results of operations.End users of our products are based across the world.As such,changes i
240、n government policies,taxes,general economic and fiscal conditions,aswell as political,diplomatic or social events,expose us to financial and business risks.In particular,changes in domestic or overseas policies and lawsregarding holding,using and/or mining of cryptocurrencies and related products a
241、nd services could result in an adverse effect on our business operationsand results of operations.Moreover,if any domestic or international jurisdiction where we operate or sell our ASIC chips prohibits or restrictscryptocurrency mining activities,we may face legal and other liabilities and may expe
242、rience a material loss of revenue.There are significant uncertainties regarding future regulations pertaining to the holding,using or mining of cryptocurrencies and related productsand services,which may adversely affect our results of operations.While cryptocurrency has gradually gained more market
243、 acceptance and attention,itis anonymous and may be used for black market transactions,money laundering,tax evasion,terrorism or other illegal activities.As a result,governments may seek to regulate,restrict,control or ban the mining,use and holding of cryptocurrencies and related products and servi
244、ces.Ourexisting policies and procedures for the detection and prevention of money 172022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm25/239Table of Contentslaundering and terrorism-funding activities through our business activities
245、have only been adopted in recent years and may not completely eliminateinstances in which we or our products may be used by other parties to engage in money laundering and other illegal or improper activities.We cannotassure you that there will not be a failure in detecting money laundering or other
246、 illegal or improper activities which may adversely affect our reputation,business,financial condition and results of operations.With advances in technology,cryptocurrencies are likely to undergo significant changes in the future.It remains uncertain whether cryptocurrencywill be able to cope with,o
247、r benefit from,those changes.In addition,as cryptocurrency mining employs sophisticated and high computing powerdevices that need to consume a lot of electricity to operate,future developments in the regulation of energy consumption,including possible restrictionson energy usage in the jurisdictions
248、 where we sell our products,may also affect our business operations and the demand for our current ASIC chips.There has been public backlash surrounding the environmental impact of cryptocurrency mining,particularly the large consumption of electricity,andgovernments of various jurisdictions have re
249、sponded.For example,in the United States,certain local governments of the state of Washington havediscussed measures to address environmental impact of cryptocurrency-related operations,such as the high electricity consumption of cryptocurrencymining activities.Pursuant to the Announcement on Preven
250、tion of Risks from Offering and Financing of Cryptocurrencies promulgated by seven PRCgovernmental authorities including the PBOC on September 4,2017,and Guarding against the Speculative Risks of Cryptocurrency Tradingpromulgated by the National Internet Finance Association of China,the China Bankin
251、g Association;and the Payment&Clearing Association of Chinaon May 18,2021,illegal activities in offering and financing of cryptocurrencies,including initial coin offerings(ICOs),are forbidden in the PRCbecause such activities may be considered to constitute illegal offering of securities or illegal
252、fundraising.Furthermore,financial institutions andpayment institutions shall not engage in businesses related to cryptocurrency offering or financing transactions.Pursuant to the Circular of theRegulating Cryptocurrency Mining Activities promulgated by eleven PRC governmental authorities including t
253、he PBOC on September 3,2021,whichaims to dispose of the“hidden risks”in cryptocurrency mining as it pursues Chinas carbon-neutrality goals,and cryptocurrency mining is to beclassified as a phased-out industry.This circular does not outlaw cryptocurrency mining completely,rather it orders local autho
254、rities to clamp down onillegal mining activities with plans to gradually phase out the industry.Investing in and constructing new mining projects will not be allowed and theexisting mining projects will be given time to exit,and the entire industrial chain of the upstream and downstream of cryptocur
255、rency mining activitieswill be tighten regulated.On September 15,2021,ten PRC governmental authorities including the Peoples Bank of China,or the PBOC,issued theNotice on Further Preventing and Disposing of Risks in Cryptocurrency Trading and Speculation.This notice reiterates that cryptocurrencies
256、do nothave the same legal status as legal currencies,and emphasizes that cryptocurrency-related businesses are illegal financing activities such as conductingexchanges between legal currencies and cryptocurrencies,exchanges among different cryptocurrencies,trading cryptocurrencies as a centralcounte
257、rparty,matching and pricing services for cryptocurrency transactions,token issuance and financing,and cryptocurrencies derivatives transactions.Cryptocurrency exchanges providing services to domestic residents are also illegal financial activities,and the relevant domestic staff and subjectsprovidin
258、g marketing and promotion,payment and settlement,and technical support services for them will be investigated for knowingly participating inthe cryptocurrency industry.We derive a significant portion of our revenue from our ASIC chips.If the market for ASIC chips used in cryptocurrency mining machin
259、es ceases toexist or diminishes significantly,our business and results of operations would be materially harmed.Historically,we derived a significant portion of our revenue from the sales of our proprietary ASIC chips,and this is expected to continue in theforeseeable future.In 2019,2020 and 2021 an
260、d the nine months ended September 30,2021 and 2022,sales of our ASIC chips accounted for 9.8%,89.0%,88.6%,92.5%and 93.1%of our revenue,respectively.If the market for ASIC chips used in cryptocurrency mining machines ceases to exist ordiminishes significantly,we would experience a significant loss of
261、 sales,cancelation of orders,or loss of customers for our ASIC chips.If we cannotmaintain the scale and profitability of our ASIC chips,our business,182022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm26/239Table of Contentsresults o
262、f operations and ability to continue to grow will suffer.Furthermore,excess inventories,inventory markdowns,brand image deterioration andmargin squeeze caused by declining economic returns for miners or pricing competition for our ASIC chips could all have a material and adverse impacton our busines
263、s,financial condition and results of operations.We generate all of our revenue from sales to customers in the PRC.Any adverse development in the regulatory environment in the PRC could havea negative impact on our business,financial condition and results of operations.We sell all of our ASIC chips t
264、o distributors in the PRC which in turn sell our products to cryptocurrency miners.We generate all of our revenuefrom customers in the PRC.If there is any adverse development in the regulatory environment concerning cryptocurrency mining in the PRC,ourbusiness,financial condition and results of oper
265、ations will be materially and adversely affected.For example,on September 15,2021,ten PRCgovernmental authorities including the PBOC issued the Notice on Further Preventing and Disposing of Risks in Cryptocurrency Trading andSpeculation.This notice reiterates that cryptocurrencies do not have the sa
266、me legal status as legal currencies,and emphasizes that cryptocurrency-related businesses are illegal financing activities such as conducting exchanges between legal currencies and cryptocurrencies,exchanges amongdifferent cryptocurrencies,trading cryptocurrencies as a central counterparty,matching
267、and pricing services for cryptocurrency transactions,tokenissuance and financing,and cryptocurrencies derivatives transactions.See“Regulation Regulations and Government Policies Relating to theCryptocurrency”for details.There is no assurance that we will be able to effectively respond to any changes
268、 in PRC industrial policies as well as theirimplementation and interpretation.To the extent we are not able to generate sufficient sales from overseas markets to offset any decrease in demandfrom our PRC customers,our business and results of operations will be negatively impacted.In particular,if th
269、e PRC government completely bans themining,even the upstream and downstream industry of the mining,possession and use of cryptocurrency,we will not be able to sell our products in thePRC,and we may not be able to generate sufficient sales overseas to make up for such loss of business in the PRC.In a
270、ddition,PRC government authorities have broad powers to adopt regulations and other requirements affecting or restricting our operations,including tax policies.Moreover,these relevant regulatory authorities possess significant powers to enforce applicable regulatory requirements in theevent of our n
271、on-compliance,including the imposition of fines,sanctions or the revocation of licenses or permits to operate our business.We cannotassure you that we will not face administrative fines or penalties concerning our operations or our subsidiaries,which could have a material adverseimpact on our result
272、s of operation.Our ASIC chips business depends mainly on supplies from a single third-party foundry,and any failure to obtain sufficient foundry capacity fromthis foundry would significantly delay the shipment of our products.As a fabless IC design company,we do not own any IC fabrication facilities
273、.A leading semiconductor foundry has been our major third-partyfoundry partner for our ASIC chips business(the“Foundry Partner”).In 2019,2020 and 2021 and the nine months ended September 30,2021 and 2022,the value of the ICs we purchased from the Foundry Partner accounted for 60.6%,84.0%,45.3%,47.4%
274、and 58.9%,respectively,of our totalprocurement for the respective periods.It is important for us to have a reliable relationship with the Foundry Partner and other future foundry serviceproviders to ensure adequate product supply to respond to customer demand.We cannot guarantee that the Foundry Par
275、tner will be able to meet our manufacturing requirements.The ability of the Foundry Partner to provideus with foundry services is limited by its technology migration,available capacity and existing obligations.If the Foundry Partner fails to succeed in itstechnology migration,it will not be able to
276、deliver to us qualified ICs,which will significantly affect our technological advancement and shipment ofASIC chips.This could in turn result in lost sales and have a material adverse effect on our relationships with our customers and on our business andfinancial condition.In addition,we do not have
277、 a 192022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm27/239Table of Contentsguaranteed level of production capacity from the Foundry Partner.We do not have long-term contracts with the Foundry Partner,and we source oursupplies on a
278、 purchase order basis and prepay the purchase amount.As a result,we depend on the Foundry Partner to allocate to us a portion of itsmanufacturing capacity sufficient to meet our needs,to produce products of acceptable quality and at acceptable final test yields and to deliver thoseproducts to us on
279、a timely basis and at acceptable prices.If the Foundry Partner raises its prices or is unable or unwilling to meet our required capacityfor any reason,such as shortages or delays in the shipment of semiconductor equipment or raw materials required to manufacture our ICs,or if ourbusiness relationshi
280、ps with the Foundry Partner deteriorate,we may not be able to obtain the required capacity and would have to seek alternativefoundries,which may not be available on commercially reasonable terms,or at all.Moreover,it is possible that other customers of the Foundry Partnerthat are larger and/or bette
281、r financed than we are,or that have long-term contracts with it,may receive preferential treatment in terms of capacityallocation or pricing.In addition,if we do not accurately forecast our capacity needs,the Foundry Partner may not have available capacity to meet ourimmediate needs or we may be req
282、uired to pay higher costs to fulfill those needs,either of which could materially and adversely affect our business,operating results or financial condition.In particular,the production of our ASIC chips may require advanced IC fabrication technologies,and foundries other than the Foundry Partnermig
283、ht not have sufficient production capacity for such technologies,if at all,to meet our requirements.This may expose us to risks associated withengaging new foundries.For example,using foundries with which we have not established relationships could expose us to potentially unfavorablepricing,unsatis
284、factory quality or insufficient capacity allocation.Other risks associated with our dependence on a single third-party foundry include limited control over delivery schedules and quality assurance,lack of capacity in periods of excess demand,unauthorized use of our intellectual property and limited
285、ability to manage inventory and parts.Inparticular,although we have entered into confidentiality agreements with our Foundry Partner for the protection of our intellectual property,it may notprotect our intellectual property with the same degree of care as we use to protect our intellectual property
286、.See“If we fail to adequately protect ourintellectual property rights,our ability to compete effectively or to defend ourselves from litigation could be impaired,which could reduce our totalrevenue and increase our costs.”If we fail to properly manage any of these risks,our business and results of o
287、perations may be materially and adverselyaffected.Moreover,if the Foundry Partner suffers any damage to its facilities,suspends manufacturing operations,loses benefits under materialagreements,experiences power outages or computer virus attacks,lacks sufficient capacity to manufacture our products,e
288、ncounters financialdifficulties,is unable to secure necessary raw materials from its suppliers or suffers any other disruption or reduction in efficiency,we may encountersupply delays or disruptions.Mining difficulty for any reason would negatively affect the economic returns of cryptocurrency minin
289、g activities,which in turn would decrease thedemand for and/or pricing of our products.The difficulty of cryptocurrency mining,or the amount of computational resources required for a set amount of reward for recording a new block,directly affects the expected economic returns for cryptocurrency mine
290、rs,which in turn affects the demand for our ASIC chips.Cryptocurrency miningdifficulty is a measure of how much computing power is required to record a new block and it is affected by the total amount of computing power in thecryptocurrency network.The cryptocurrency algorithm is designed so that on
291、e block is generated within a certain time period,no matter how muchcomputing power is in the network.Thus,as more computing power joins the network,and assuming the rate of block creation does not change,theamount of computing power required to generate each block increases and hence the mining dif
292、ficulty also increases.In other words,based on thecurrent design of the cryptocurrency network,cryptocurrency mining difficulty would increase together with the total computing power available in thecryptocurrency network,which is in turn affected by the number of cryptocurrency mining machines in o
293、peration.As a result,strong growth in sales ofour ASIC chips can contribute to further growth in the total computing power in the network,thereby driving up the difficulty of 202022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm28/239
294、Table of Contentscryptocurrency mining and resulting in downward pressure on the expected economic return of cryptocurrency mining and the demand for,and pricingof,our products.Cryptocurrency exchanges and wallets,and to a lesser extent,the cryptocurrency network itself,may suffer from hacking and f
295、raud risks,whichmay erode user confidence in cryptocurrency which would in turn decrease the demand for our ASIC chips that are used in cryptocurrency miningmachines.Cryptocurrency transactions are entirely digital and,as with any virtual system,are at risk from hackers,malware and operational glitc
296、hes.Hackers can target cryptocurrency exchanges and cryptocurrency transactions so as to gain access to thousands of accounts and digital wallets wherecryptocurrencies are stored.Cryptocurrency transactions and accounts are not insured by any type of government program and all cryptocurrencytransact
297、ions are permanent because there is no third party or payment processor.Cryptocurrency has suffered from hacking and cyber-theft as suchincidents have been reported by several cryptocurrency exchanges and miners,highlighting concerns about the security of cryptocurrency and thereforeaffecting its de
298、mand and price.Also,the price and exchange of cryptocurrency may be affected due to fraud risk.While cryptocurrency uses private keyencryption to verify owners and register transactions,fraudsters and scammers may attempt to sell false cryptocurrencies.All of the above mayadversely affect the operat
299、ion of the cryptocurrency network which would erode user confidence in cryptocurrency,and which would negatively affectdemand for our productsCryptocurrency mining activities are energy-intensive.The availability and cost of electricity will restrict the geographic locations of miningactivities,ther
300、eby restricting the geographic locations of miners and sales of our products.Cryptocurrency mining activities are inherently energy-intensive and electricity costs account for a significant portion of the overall mining costs.The availability and cost of electricity will restrict the geographic loca
301、tions of mining activities.Any shortage of electricity supply or increase inelectricity cost in a jurisdiction may negatively impact the viability and the expected economic return for cryptocurrency mining activities in thatjurisdiction,which may in turn decrease the sales of our ASIC chips in that
302、jurisdiction.In addition,the significant consumption of electricity may have a negative environmental impact,including contribution to climate change,whichmay give rise to public opinion against allowing the use of electricity for cryptocurrency mining activities or government measures restricting o
303、rprohibiting the use of electricity for cryptocurrency mining activities.Any such development in the jurisdictions where we sell our ASIC chips that areused in cryptocurrency mining machines could have a material and adverse effect on our business,financial condition and results of operations.Failur
304、e at tape-out or failure to achieve the expected final test yields for our ASIC chips could negatively impact our operating results.The tape-out process is a critical milestone in our business.A successful tape-out means all the stages in the design and verification process of ourASIC chips have bee
305、n completed,and the product is ready to be sent for manufacturing.A tape-out will be either a success or a failure,and in the lattercase design modifications will be needed.The tape-out process is very costly,and repeated failures can significantly increase our costs,lengthen ourproduct development
306、period and delay our product launch.While we have consistently achieved successful initial tape-outs in the initial batchhistorically,we cannot assure you that we will be able to continue to have a high tape-out success rate in the future.Once tape-out is successful,the ASIC design is sent for manuf
307、acturing,and the final test yield is a measurement of the production success rate.The final test yield is a function of both of product design,which is developed by us,and process technology,which typically belongs to a third-partyfoundry,such as the Foundry Partner in our case.While we have histori
308、cally achieved high final test yields,such as 97%in 2019,99%in 212022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm29/239Table of Contents2020,99%in 2021,98%in the nine months ended September 30,2021 and 99%in the nine months ended S
309、eptember 30,2022,we cannot assure youthat we will be able to maintain such high final test yields in the future.Low final test yields can result from either a product design deficiency or aprocess technology failure or a combination of both.As such,we may not be able to identify problems causing low
310、 final test yields until our productdesigns go to the manufacturing stage,which may substantially increase our per unit costs and delay the launch of new products.For example,if the Foundry Partner experiences manufacturing inefficiencies or encounters disruptions,errors or difficulties during produ
311、ction,we may fail to achieve acceptable final test yields or experience product delivery delays.We cannot be certain that the Foundry Partner will be able todevelop,obtain or successfully implement process technologies needed to manufacture future generations of our products on a timely basis.Moreov
312、er,during the periods in which foundries are implementing new process technologies,their manufacturing facilities may not be fully productive.Asubstantial delay in the technology transitions to smaller geometry process technologies could have a material and adverse effect on us,particularly ifour co
313、mpetitors transition to such technologies before us.In addition,resolution of yield problems requires cooperation among us,the Foundry Partner and package and test partners.We cannot assure youthat the cooperation will be successful and that any yield problems can be fixed.Any failure of our product
314、s to meet the necessary quality standards could adversely affect our reputation,business and results of operation.The quality of our products is critical to the success of our business and depends significantly on the effectiveness of our and of our manufacturingservice providers quality control sys
315、tems.In our efforts to quickly meet new market trends and demand and to adopt new technologies,our productsmay not have adequate time to go through our normal rigorous testing procedures and final inspection,which could result in instances where ourproducts cannot reach the required performance stan
316、dard,or our products are found to be defective.These instances could result in our customerssuffering losses.Defects detected before product delivery to our customers may result in additional costs for remediation and rework.Defects detectedafter the delivery and installation of our products may res
317、ult in our incurring further costs relating to inspection,installation,remediation or productreturn,which may result in damages to our reputation,loss of customers,government fines and disputes and/or litigation.In addition,we outsource a portion of our product manufacturing process to certain produ
318、ction partners,and in those instances we require theseproduction partners to purchase parts and components from other third-party suppliers.Although we carry out quality inspections for the manufacturingprocess and the parts and components purchased by our production partners,we cannot assure you th
319、at we will always be able to detect defects in themanufacturing process or the parts and components purchased.Any defect in our third party manufacturing process or parts and components purchasedby them may lead to defects in our finished products,which may in turn increase our costs as well as dama
320、ge our reputation and market share.We maynot be able to procure contractual or other indemnities from the suppliers of the defective parts and components adequately,or at all.We may be subjectto product liability claims and litigation for compensation which could result in substantial and unexpected
321、 expenditures and could materially andadversely affect our cash flow and operating results.We may be unable to make the substantial investments in research and development that are required to remain competitive in our business.Advances in cryptocurrency mining technology and the semiconductor indus
322、try have led to increased demand for ICs of higher speed and powerefficiency for solving computational problems of increasing complexity.In 2019,2020 and 2021 and the nine months ended September 30,2021 and2022,we incurred research and development expenses of RMB9.1 million,RMB22.5 million,RMB53.2 m
323、illion(US$7.5 million),222022/12/13Amendment No.6 to Form F-1https:/www.sec.gov/Archives/edgar/data/1895597/0000394/d204090df1a.htm30/239Table of ContentsRMB25.4 million and RMB38.4 million(US$5.4 million),respectively.We are committed to investing in new product development in order to s
324、taycompetitive in our markets.We are driven by market demand,and we intend to continue to broaden and enhance our product portfolio in order to deliverthe most effective solutions to our customers.Nevertheless,if we are unable to generate enough revenue or raise enough capital to make adequateresear
325、ch and development investments going forward,our product development and relevant research and development initiatives may be restricted ordelayed,or we may not be able to keep pace with the latest market trends and satisfy our customers needs,which could materially and adversely affectour results o
326、f operations.Furthermore,our research and development expenditures may not yield the expected results that enable us to roll out newproducts,which in turn will harm our prospects and results of operations.Failure to maintain inventory levels in line with the approximate level of demand for our produ
327、cts could cause us to lose sales,expose us toincreased inventory risks and subject us to increases in holding costs,risk of inventory obsolescence,increases in markdown allowances and write-offs,any of which could have a material adverse effect on our business,financial condition and results of oper
328、ations.To operate our business successfully and meet our customers demands and expectations,we must maintain a certain level of finished goodsinventory to ensure immediate delivery when required.However,forecasts are inherently uncertain.If our forecasted demand is lower than actualdemand,we may not
329、 be able to maintain an adequate inventory level of our finished goods or produce our products in a timely manner,and we may losesales and market share to our competitors.On the other hand,we may also be exposed to increased inventory risks due to accumulated excess inventoryof our products or raw m
330、aterials,parts and components for our products.Excess inventory levels may lead to increases in inventory holding costs,risksof inventory obsolescence and provisions for write-downs.The carrying value of our inventories were RMB9.5 million,RMB66.8 million(US$9.4million)and RMB76.6 million(US$10.8 mi
331、llion)as of December 31,2020 and 2021 and September 30,2022,respectively.The average selling prices of our products may decrease from time to time due to technological advancement and we may not be able to pass suchdecreases onto our suppliers,which may in turn adversely affect our profitability.The
332、 IC design industry is characterized by rapid launches of new products,continuous technological advancements and changing market trendsand customer preferences,all of which have generally translated to a shorter life cycle and a gradual decrease in the average selling prices of productsover time.Bec
333、ause we compete in the environment of rapidly-evolving technology advancement and market trends and developments of the IC designindustry,there are no assurances that we will be able to pass on any decrease in average selling prices of our products to our suppliers.In the event thataverage selling prices of our products unusually or significantly decrease and such decreases cannot be offset by a c