1、2022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm1/255F-1/A 1 d384713df1a.htm AMENDMENT NO.2 TO FORM F-1Table of ContentsAs filed with the Securities and Exchange Commission on September 6,2022Registration No. UNITED STATE

2、SSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 AMENDMENT NO.2TOFORM F-1REGISTRATION STATEMENTUnderThe Securities Act of 1933 Nano Labs Ltd(Exact name of Registrant as specified in its Constitution)Cayman Islands 3674 Not Applicable(State or other jurisdiction of(Primary Standard Industrial(

3、I.R.S.Employerincorporation or organization)Classification Code Number)Identification Number)30th Floor,DikaiyinzuoNo.29,East Jiefang Road,Hangzhou,ZhejiangPeoples Republic of China(86)0571-8665 6957(Address,including zip code,and telephone number,including area code,of Registrants principal executi

4、ve offices)Cogency Global Inc.122 East 42nd Street,18th FloorNew York,NY 10168(800)221-0102(Name,address,including zip code,and telephone number,including area code,of agent for service)Copies to:Dan Ouyang,Esq.Wilson Sonsini Goodrich&RosatiProfessional CorporationUnit 2901,29F,Tower C,Beijing Yinta

5、i CentreNo.2 Jianguomenwai AvenueChaoyang District,Beijing 100022Peoples Republic of China(86)10-6529-8300 Stephanie Tang,Esq.Hogan Lovells11th Floor,One Pacific Place88 Queensway RoadHong Kong+852 2219 0888 Approximate date of commencement of proposed sale to the public:As soon as practicable after

6、 the effective date of this registration statement.If 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 of 1933,or theSecurities Act,check the following box.If this Form is filed to register additional

7、 securities for an offering pursuant to Rule 462(b)under the Securities Act,check the following box and list the SecuritiesAct registration 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(c)u

8、nder the Securities Act,check the following box and list the Securities Act registrationstatement 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 Securities Act,check the following box and

9、list the Securities Act registrationstatement number of the earlier 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 growth company 2022/12/13AMENDMENT NO.2

10、 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm2/255If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if the registrant has elected not to usethe extended transition period for complyi

11、ng with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B)of the Securities Act.The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall filea further amendment whi

12、ch specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a)of the SecuritiesAct,as amended,or until the registration statement shall become effective on such date as the Securities and Exchange Commission,acting pursuant to saidSection 8(

13、a)may determine.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board to its Accounting StandardsCodification after April 5,2012.2022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/00088

14、41/d384713df1a.htm3/255Table of ContentsThe information in this preliminary prospectus is not complete and may be changed.These securities may not be sold until theregistration statement filed with the Securities and Exchange Commission is effective.This preliminary prospectus is not anoffer to sell

15、 nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.Subject to Completion.Dated September 6,2022860,000 American Depositary Shares Nano Labs LtdRepresenting 1,720,000 Class A Ordinary Shares This is a public offering of American depositary

16、shares,or ADSs,representing Class A ordinary shares,par value US$0.0001 per share,or Class A ordinary shares,of Nano Labs Ltd.We are offering 860,000 ADSs representing 1,720,000 Class A ordinary shares to be sold in this offering.Each ADS represents two Class A ordinary shares.OnJuly 19,2022,we rece

17、ived a staff determination letter from the Listing Qualifications Department of the Nasdaq notifying us of the determination of the Nasdaq staff todelist our ADSs from the Nasdaq Global Market because of our failure to demonstrate compliance with the requirement that the gross offering proceeds be a

18、t least$25million as outlined in Nasdaq Listing Rule 5210(k)(i)in our recently completed initial public offering.Nasdaqs hearings panel has granted our request to continue ourlisting on the Nasdaq subject to the condition that we will demonstrate compliance with Nasdaq Listing Rule 5210(k)(i)on or b

19、efore January 16,2023.We intend for thisoffering to be of a supplemental nature vis-vis our recently completed initial public offering so as to rectify the non-compliance with Listing Rule 5210(k)(i).Weexpect to raise at least US$4.7 million,which we believe will be sufficient to demonstrate our com

20、pliance with Nasdaq Listing Rule 5210(k)(i).See“Risks Relating tothe ADSs and this OfferingIf we fail to maintain the listing of our ADSs with a U.S.national securities exchange,the liquidity and price of our ADSs could beadversely affected.”Our ADSs are listed on the Nasdaq Global Market,or Nasdaq,

21、under the symbol“NA.”On September 2,2022,the last reported sale price of our ADSs on Nasdaqwas$4.47 per ADS.We are an“emerging growth company”as defined under applicable U.S.securities laws and are eligible for reduced public company reporting requirements.Upon the completion of this offering,51,871

22、,846 Class A ordinary shares and 57,178,154 Class B ordinary shares will be issued and outstanding,assuming theunderwriters do not exercise their option to purchase additional ADSs.Holders of Class A ordinary shares and Class B ordinary shares have the same rights except forvoting and conversion rig

23、hts.Each Class A ordinary share is entitled to one vote,and each Class B ordinary share is entitled to 15 votes on all matters subject to a vote atgeneral meetings of our company.Each Class B ordinary share can be convertible into Class A ordinary share at any time at the option of the holder thereo

24、f.Class Aordinary shares shall not be convertible into Class B ordinary shares under any circumstances.Additionally,we are,and upon the completion of this offering,will continue to be a“controlled company”as defined under corporate governance rules of NasdaqStock Market,because Mr.Jianping Kong will

25、 beneficially own approximately 31.2%of our then-issued and outstanding ordinary shares and will be able to exerciseapproximately 56.1%of the total voting power of our issued and outstanding ordinary shares immediately after the consummation of this offering,assuming theunderwriters do not exercise

26、its option to purchase additional ADSs.For further information,see“Principal Shareholders.”We are exposed to legal and operational risks associated with our operations in China.The PRC government has significant authority to exert influence on theability of a company with operations in China,includi

27、ng us,to conduct its business.Changes in Chinas economic,political or social conditions or government policiescould materially and adversely affect our business and results of operations.For example,we face risks associated with regulatory approvals of offshore offerings,anti-monopoly regulatory act

28、ions,oversight on cybersecurity and data privacy,as well as the lack of PCAOB inspection on our auditors.Our U.S.-based auditor,MaloneBailey,LLP,is not among the PCAOB-registered public accounting firms headquartered in China and Hong Kong that are subject to PCAOBs determinationissued on December 1

29、6,2021 of having been unable to inspect or investigate completely.However,we could still face the risk of delisting and cease of trading of oursecurities from a stock exchange or an over-the-counter market in the United States under the Holding Foreign Companies Accountable Act and the securities re

30、gulationspromulgated thereunder if the PCAOB determines in the future that it is unable to completely inspect or investigate our auditor which has a presence in China.TheseChina-related risks could result in a material change in our operations and/or the value of our securities,or could significantl

31、y limit or completely hinder our ability tooffer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.In particular,recent policy statementsand regulatory actions by the PRC government,such as those related to the cryptocurr

32、ency mining business,may adversely impact our ability to conduct our business,accept foreign investments,or list on a U.S.or other foreign stock exchange,which may cause the ADSs to be prohibited from trading or to be delisted from the NasdaqGlobal Market or any other U.S.stock exchange.See“Risk Fac

33、torsRisks Relating to Doing Business in China.”In particular,the PRC government has significant oversight and discretion over the conduct of our business and may intervene with or influence our operations asthe government deems appropriate to further regulatory,political and societal goals.The PRC g

34、overnment has recently published new policies that significantly affectedcertain industries,including the cryptocurrency industry,which may severely restrict our ability to expand our business or serve our customers in China.We cannotassure you that government authorities in China will not introduce

35、 further enhanced regulation over the cryptocurrency industry that may lead to our inability to operatein China at all.Furthermore,the PRC government has recently indicated an intent to exert more oversight and control over overseas securities offerings and other capitalmarkets activities and foreig

36、n investment in China-based companies like us.Any such action,once taken by the PRC government,could significantly limit or completelyhinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases,become wo

37、rthless.Investors in the ADSs are not purchasing equity securities of our subsidiaries that have substantive business operations in China but instead are purchasing equitysecurities of a Cayman Islands holding company.Nano Labs Ltd is a holding company with no material operations of its own.We condu

38、ct our operations primarilythrough our subsidiaries in China and one of our subsidiaries in Hong Kong.Such structure involves unique risks to investors in the ADSs.Investors may never directlyhold equity interests in our PRC subsidiaries with substantive operations.We also cannot assure you that the

39、 Chinese regulatory authorities will not disallow such astructure.If the Chinese regulatory authorities disallow the structure,it would likely result in a material change in our operations and cause the value of the ADSs tosignificantly decline or become worthless.See“Risk FactorsRisks Relating to O

40、ur Corporate Structure and Governance.”Neither we nor any of our subsidiaries has obtained the approval or clearance from either the China Securities Regulatory Commission or the CyberspaceAdministration of China for this offering,and we do not intend to obtain the approval or clearance from any of

41、such or other regulators in China in connection with thisoffering.We cannot assure you,however,that regulators in China will not subsequently require us to undergo the approval or clearance procedures and subject us topenalties for non-compliance.See“Risk FactorsRisks Relating to Conducting Business

42、 in ChinaRecent regulatory developments in China may subject us toadditional regulatory review or otherwise restrict or completely hinder our ability to offer securities and raise capitals overseas,all of which could materially andadversely affect our business and cause the value of the ADSs to sign

43、ificantly decline or become worthless.”and“Risks Relating to the ADSs and this OfferingThe2022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm4/255approval of or clearance by the CSRC,the CAC and other compliance procedures may be requ

44、ired in connection with this offering,and,if required,we cannot predictwhether we will be able to obtain such approval or clearance.”The structure of cash flows within our organization,and the applicable regulations,are as follows.After foreign investors funds enter Nano Labs Ltd,our holdingcompany,

45、at the close of this offering,subject to the cash demand of our PRC and Hong Kong subsidiaries,the funds can be transferred to our wholly owned Caymansubsidiaries,then to our wholly owned BVI subsidiaries,then to our Hong Kong subsidiaries,which will further distribute the funds to our PRC subsidiar

46、ies.If we intendto distribute dividends,PRC subsidiaries will transfer the dividends to our Hong Kong subsidiaries in accordance with the laws and regulations of the PRC,and then ourHong Kong subsidiaries will transfer the dividends all the way up to Nano Labs Ltd,and the dividends will be distribut

47、ed from Nano Labs Ltd to all shareholdersrespectively in proportion to the shares they hold,regardless of whether the shareholders are U.S.investors or investors in other countries or regions.The cross-bordertransfer of funds within our corporate group under our direct holding structure must be lega

48、l and compliant with relevant laws and regulations of China.In utilizing theproceeds from this offering,as an offshore holding company,we are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries only throughloans or capital contributions and to our affiliated entities

49、only through loans,subject to applicable government reporting,registration and approvals.See“Use ofProceeds”and“Risk FactorRisks Relating to Conducting Business in ChinaPRC regulation of loans to and direct investment in PRC entities by offshore holdingcompanies and governmental control of currency

50、conversion may delay or prevent us from using the proceeds of this offering to make loans or additional capitalcontributions to our PRC subsidiaries and affiliated entities.”In 2020 and 2021,we transferred cash proceeds of nil and US$21.1 million to our PRC subsidiaries for thesettlement of intercom

51、pany transactions and as paid-in capital for our PRC subsidiaries,and none of our PRC subsidiaries has issued any dividends or distributions torespective holding companies or any investors as of the date of this prospectus.We do not have any present plan to pay any cash dividends on our ordinary sha

52、res in theforeseeable future after this offering.We have,from time to time,transferred cash between our PRC subsidiaries to fund their operations,and we do not anticipate anydifficulties or limitations on our ability to transfer cash between such subsidiaries.As of the date of this prospectus,no cas

53、h generated from our PRC subsidiaries hasbeen used to fund operations of any of our non-PRC subsidiaries.We may encounter difficulties in our ability to transfer cash between PRC subsidiaries and non-PRCsubsidiaries largely due to various PRC laws and regulations imposed on foreign exchange.However,

54、as long as we are compliant with the procedures for approvals fromforeign exchange authorities and banks in China,the relevant laws and regulations in China do not impose limitations on the amount of funds that we can transfer out ofChina.We currently do not have any cash management policy that dict

55、ate the transfer of cash between our subsidiaries.See“RegulationPRC Laws and Regulationsrelating to Foreign Exchange”for details of such procedures.See“Risk Factors”on page 17 to read about factors you should consider before buying the ADSs.Neither the United States Securities and Exchange Commissio

56、n nor any other regulatory body has approved or disapproved of these securities or passedupon the accuracy or adequacy of this prospectus.Any representation to the contrary is a criminal offense.Per ADS Total Public offering price US$US$Underwriting discounts and commissions(1)US$US$Proceeds,before

57、expenses,to us US$US$(1)See“Underwriting”for additional information regarding underwriting compensation.The underwriters have an option to purchase up to an additional 129,000 ADSs from us at the public offering price less the underwriting discounts andcommissions.The underwriters expect to deliver

58、the ADSs against payment in U.S.dollars in New York,New York on or about ,2022.Maxim Group LLC AMTD Tiger Brokers Prospectus dated ,20222022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm5/255Table of Contents2022/12/13AMENDMENT NO.2

59、TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm6/255Table of ContentsTABLE OF CONTENTS Page PROSPECTUS SUMMARY 1 RISK FACTORS 17 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 68 USE OF PROCEEDS 70 DIVIDEND POLICY 71 CAPITALIZATION 72 DILUTION 74 ENFOR

60、CEABILITY OF CIVIL LIABILITIES 76 CORPORATE HISTORY AND STRUCTURE 78 SELECTED CONSOLIDATED FINANCIAL DATA 79 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 82 INDUSTRY OVERVIEW 98 BUSINESS 107 REGULATION 121 MANAGEMENT 131 PRINCIPAL SHAREHOLDERS 139 RELATED PART

61、Y TRANSACTIONS 141 DESCRIPTION OF SHARE CAPITAL 142 DESCRIPTION OF AMERICAN DEPOSITARY SHARES 161 SHARES ELIGIBLE FOR FUTURE SALE 173 TAXATION 175 UNDERWRITING 182 EXPENSES RELATING TO THIS OFFERING 193 LEGAL MATTERS 194 EXPERTS 195 WHERE YOU CAN FIND ADDITIONAL INFORMATION 196 INDEX TO CONSOLIDATED

62、 FINANCIAL STATEMENTS F-1 You should rely only on the information contained in this prospectus or in any related free writing prospectus that we have filed with the U.S.Securities and Exchange Commission,or the SEC.We have not authorized anyone to provide you with information different from that con

63、tained in thisprospectus or in any related free-writing prospectus.We take no responsibility for,and can provide no assurance as to the reliability of,any otherinformation that others may give you.We are offering to sell,and seeking offers to buy the ADSs offered hereby,but only under circumstances

64、and injurisdictions where offers and sales are permitted and lawful to do so.The information contained in this prospectus is current only as of its date,regardless of the time of delivery of this prospectus or of any sale of the ADSs.Neither we nor the underwriters have done anything that would perm

65、it this offering or possession or distribution of this prospectus or any filedfree writing prospectus in any jurisdiction where other action for that purpose is required,other than in the United States.Persons outside the UnitedStates who come into possession of this prospectus or any filed free wri

66、ting prospectus must inform themselves about,and observe any restrictionsrelating to,the offering of the ADSs and the distribution of this prospectus or any filed free writing prospectus outside the United States.i2022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/000

67、8841/d384713df1a.htm7/255Table of ContentsPROSPECTUS SUMMARYThis summary highlights information contained in greater detail elsewhere in this prospectus and does not contain all of the information thatyou should consider in making your investment decision.Before investing in the ADSs,you

68、should carefully read this entire prospectus,includingour consolidated financial statements and the related notes included in this prospectus and the information set forth under the headings“RiskFactors”and“Managements Discussion and Analysis of Financial Condition and Results of Operations.”This pr

69、ospectus contains informationfrom an industry report commissioned by us and prepared by Frost&Sullivan,an independent research firm,to provide information regarding ourindustry and our market position in China.We refer to this report as the F&S report.Our MissionOur mission is to provide ubiquitous

70、computing power to the Metaverse computing network with our fabless logic-memory integratedcircuits.OverviewWe are a leading fabless integrated circuit,or IC,design company and product solution provider in China.We are committed to thedevelopment of high throughput computing,or HTC,chips,high perfor

71、mance computing,or HPC,chips,distributed computing and storagesolutions,smart network interface cards,or NICs,vision computing chips and distributed rendering.We have built a comprehensive flowprocessing unit,or FPU,architecture which offers solution that integrates the features of both HTC and HPC.

72、Moreover,our Cuckoo series are oneof the first near-memory HTC chips available in the market with a maximum bandwidth of approximately 2.27 Tbps,as well as one of the firstmovers of ASIC-based Grin mining market,according to the F&S report.In June 2021,we established IPOLLO PTE.LTD.,our indirect who

73、lly-owned subsidiary in Singapore,to facilitate our business expansion in the overseas IC markets.The fabless model of semiconductor production has become increasingly popular as it allows companies to focus on IC design and avoidsignificant resource investments by sharing the existing manufacturing

74、 facilities of a third party.The market size of the global fabless IC designmarket,in terms of the sales revenue,increased from US$101.5 billion in 2017 to US$169.0 billion in 2021 at a CAGR of 13.6%,according to theF&S report.Due to the emergence of cutting-edge technologies,such as artificial inte

75、lligence,Internet-of-things and blockchain,the market size ofthe global fabless IC design market is expected to reach US$343.3 billion in 2026 at a CAGR of 15.2%between 2021 and 2026,according to thesame source.Moreover,China has taken a large share of the global fabless IC design market in recent y

76、ears and experienced a steady growth inrevenue due to the development of design and manufacturing technology and government support.According to the F&S report,the market size ofChinas fabless IC design market,in terms of the sales revenue of ICs,increased from RMB72.6 billion in 2017 to RMB181.3 bi

77、llion in 2021 at aCAGR of 25.7%and is expected to reach RMB468.6 billion in 2026 at a CAGR of 20.9%between 2021 and 2026,according to the same source.We have developed significant advantages in our business and technological capabilities,including the following:We released our first generation of th

78、e Cuckoo series,Cuckoo 1.0,in the second quarter of 2020,which is one of the first near-memory HTCchips available in the market with a maximum bandwidth of approximately 2.27 Tbps,as well as one of the first movers in the ASIC-basedGrin mining market,according to the F&S report.We completed the tape

79、-out for Cuckoo 2.0 and launched the product in the fourth quarter of 2021.We are in the design process of Cuckoo 3.0,which is expected to be completed in 2023.12022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm8/255Table of Contents

80、 We have completed the design of Darkbird 1.0 and have begun the delivery of Darkbird 1.0 in the first quarter of 2022.We are in the processof designing Darkbird 2.0.Our proprietary HPC chips,Darkbird,embedded in our Bitcoin mining machine,iPollo,can achieve high computing power with reduced sizeand

81、 increased power efficiency.In the fourth quarter of 2021,we launched our Darksteel series,which can be applied to both industrial and commercial sectors by offeringdistributed computing and data storage solutions.We have successfully designed our 55nm,40nm,22nm and n+1 ASIC chips and our 38nm memor

82、y chip.As of June 30,2022,we had registered 15 software copyrights,four IC layout-design rights and 10 patents in China,and applied forregistration of 34 patents in China.Competitive StrengthsWe believe that the following strengths contribute to our success and differentiate us from our competitors:

83、We are a leading fabless integrated circuit design company and product solution provider in China.We can achieve a fast time-to-market with our FPU Architecture.We have strong supply chain management capabilities.We can capture the market growth of Metaverse and its application scenarios.We have a v

84、isionary management team and talented research and development team.Growth StrategiesWe intend to grow our business using the following key strategies:Enhance our research and development capabilities.Strengthen and expand the application of our chip products and solutions.Selectively pursue interna

85、tional expansion.Enhance our supply chain management.Attract,cultivate and retain a talented and professional workforce.Risks and ChallengesInvesting in the ADSs entails a significant level of risk.Before investing in the ADSs,you should carefully consider the risks anduncertainties summarized below

86、,the risks described under the“Risk Factors”section beginning on page 17 of,including the risks described underthe subsections headed“Risks Relating to Our Business,”“Risks Relating to Our Operations,”“Risks Relating to Our Industry,”“RisksRelating to Conducting Business in China,”“Risks Relating to

87、 Our Corporate Structure and Governance,”and“Risks Relating to the ADSsand This Offering,”and the other information contained in this prospectus before you decide whether to purchase the ADSs.Investors in the ADSs are not purchasing equity securities of our subsidiaries that have substantive busines

88、s operations in China but insteadare purchasing equity securities of a Cayman Islands holding company.Nano Labs Ltd is a holding company with no material operations of itsown.We conduct our operations primarily through our subsidiaries in China and one of our subsidiaries in Hong Kong.Such structure

89、 involvesunique risks 22022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm9/255Table of Contentsto investors in the ADSs.Investors may never directly hold equity interests in our PRC subsidiaries with substantive operations.See“Risk F

90、actorsRisks Relating to Our Corporate Structure and GovernanceInvestors in our ADSs are not purchasing equity securities of our subsidiaries thathave substantive business operations in China but instead are purchasing equity securities of a Cayman Islands holding company.”We are exposed to legal and

91、 operational risks associated with our operations in China.The PRC government has significant authority to exertinfluence on the ability of a company with operations in China,including us,to conduct its business.Changes in Chinas economic,political orsocial conditions or government policies could ma

92、terially and adversely affect our business and results of operations.For example,we face risksassociated with regulatory approvals of offshore offerings,anti-monopoly regulatory actions,oversight on cybersecurity and data privacy,as wellas the lack of PCAOB inspection on our auditors.These China-rel

93、ated risks could result in a material change in our operations and/or the value ofour securities,or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value ofsuch securities to significantly decline or become worthless.In p

94、articular,recent policy statements and regulatory actions by the PRC government,such as those related to the cryptocurrency mining business,may adversely impact our ability to conduct our business,accept foreign investments,or list on a U.S.or other foreign stock exchange,which may cause the ADSs to

95、 be prohibited from trading or to be delisted from the Nasdaq GlobalMarket or any other U.S.stock exchange.Additionally,the PRC government has significant oversight and discretion over the conduct of ourbusiness and may intervene with or influence our operations as the government deems appropriate t

96、o further regulatory,political and societal goals.The PRC government has recently published new policies that significantly affected certain industries,including the cryptocurrency industry,which may severely restrict our ability to expand our business or serve our customers in China.We cannot assur

97、e you that government authoritiesin China will not introduce further enhanced regulation over the cryptocurrency industry that may lead to our inability to operate in China at all.Furthermore,the PRC government has recently indicated an intent to exert more oversight and control over overseas securi

98、ties offerings and othercapital markets activities and foreign investment in China-based companies like us.Any such action,once taken by the PRC government,couldsignificantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such secu

99、rities tosignificantly decline or,in extreme cases,become worthless.Our financial statements contained in this registration statement on Form F-1,of which the prospectus forms a part,have been audited byMaloneBailey,LLP,an independent registered public accounting firm that is headquartered in the Un

100、ited States with offices in Beijing andShenzhen,China.MaloneBailey,LLP has been inspected by the PCAOB on a regular basis and is not among the PCAOB-registered publicaccounting firms headquartered in China and Hong Kong that are subject to PCAOBs determination issued on December 16,2021 of having be

101、enunable to inspect or investigate completely.However,as the PRC Securities Law requires approval from relevant PRC authorities for inspection ofany audit working papers in China by foreign authorities,the audit working papers of our financial statements may not be inspected by thePCAOB,since the au

102、dit work was carried out by MaloneBailey,LLP with the collaboration of their China-based offices and the PCAOB has notobtained such requisite approval.We could still face the risk of delisting and cease of trading of our securities from a stock exchange or an over-the-counter market in the United St

103、ates under the Holding Foreign Companies Accountable Act and the securities regulations promulgatedthereunder if the PCAOB determines in the future that it is unable to completely inspect or investigate our auditor which has a presence in China.The trading of the ADSs may be prohibited and the ADSs

104、may be delisted from the Nasdaq Global Market or any other U.S.stock exchange underthe Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors with presence in China.Additionally,on June 22,2021,the U.S.Senate passed a bill which,if passed by the U.S.House of Representat

105、ives and signed into law,would reduce the number ofconsecutive non-inspection years required for triggering the prohibitions under the Holding Foreign Companies Accountable Act from three yearsto two years.The prohibition of trading of the ADSs and the delisting of the ADSs,or the threat of their be

106、ing prohibited or delisted,maymaterially and adversely affect the value of your 32022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm10/255Table of Contentsinvestment.You should pay special attention to the subsection headed“Risks Rela

107、ting to Conducting Business in China”below.In particular,we face risks and challenges in the following aspects,including:Risks Relating to Our Business Uncertainties in our research and development activities.Volatility of the cryptocurrency market.Market conditions for HTC and HPC solutions market.

108、Constant technological changes in the industries we operate in.Significant revenue contribution from our cryptocurrency mining machines.Our reliance on limited suppliers.Risks Relating to Our Operations Our ability to achieve or sustain profitability.Our ability to forecast our business and assess t

109、he seasonality and volatility in our business.Ongoing global coronavirus COVID-19 outbreak.Our ability to obtain significant financial resources.Our ability to price our products at our desired margins.Credit risks and concentration of credit risks in relation to defaults from counterparties.Our abi

110、lity to manage our growth or execute our strategies effectively.High customer concentration.Risks Relating to Our Industry Adverse changes in the regulatory environment in China.Adverse changes of regulatory environment in foreign markets.Increasing mining difficulty,which could result in downward p

111、ressure on the expected economic returns.Concert actions,which could prevent new transactions from gaining confirmations,halt payments between users,and reverse previouslycompleted transactions.Challenges against decentralized nature of cryptocurrencies.Change of algorithm and mining mechanism.Risks

112、 Relating to Conducting Business in China Recent regulatory developments in China,which may subject us to additional regulatory review.Significant influence of PRC government over companies with China-based operations.Possibility of delisting if the PCAOB is unable to inspect auditors with presence

113、in China.Changes in the political and economic policies of the PRC government.42022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm11/255Table of Contents Uncertainties regarding the interpretation and enforcement of PRC laws,rules and

114、 regulations.A severe or prolonged downturn in Chinas economy.Increased labor costs and enforcement of stricter labor laws and regulations in China.Risks Relating to Our Corporate Structure and Governance Investors in the ADSs not purchasing equity securities of our subsidiaries that have substantiv

115、e business operations in China but insteadequity securities of a Cayman Islands holding company.Custodians or authorized users of our controlling non-tangible assets,including chops and seals,failing to fulfill their responsibilities.Anti-takeover provisions in our currently effective memorandum and

116、 articles of association.Dual-class structure of our ordinary shares which could affect the trading market for the ADSs.Less protection to shareholders due to our home country practices for corporate governance matters.Certain judgments obtained against us by our shareholders may not be enforceable.

117、Reduced reporting requirements due to our emerging growth company status.Our exemption from certain provisions applicable to U.S.domestic public companies due to our foreign private issuer statusRisks Relating to the ADSs and this Offering Our ability to comply with the CSRC,the CAC and other compli

118、ance procedures.Volatile trading price of the ADSs.Lack of research or report on the business or change in recommendations regarding the ADSs.Sale or availability for sale of substantial amounts of the ADSs.Potential CAC and CSRC Approval Required for This OfferingThe General Office of the Central C

119、ommittee of the Communist Party of China and the General Office of the State Council jointly issued theOpinions on Severe and Lawful Crackdown on Illegal Securities Activities,which was available to the public on July 6,2021.These opinionsemphasized the need to strengthen the administration over ill

120、egal securities activities and the supervision on overseas listings by China-basedcompanies.These opinions proposed to take effective measures,such as promoting the construction of relevant regulatory systems to deal with therisks and incidents facing China-based overseas-listed companies and the de

121、mand for cybersecurity and data privacy protection.Moreover,onJanuary 4,2022,the Cyberspace Administration of China,or the CAC,and other ministries and commissions(including the CSRC),announced theadoption of the Cybersecurity Review Measures,which became effective on February 15,2022 and provides t

122、hat network platform operatorspossessing personal information of more than one million individual users must undergo a cybersecurity review by the CAC when they seek tohave their securities listed on a foreign stock exchange.Furthermore,the Standing Committee of the National Peoples Congress passed

123、thePersonal Information Protection Law of the PRC,or PIPL,which became effective on November 1,2021,requires such operators to obtain consentof the user prior to any cross-border transfer of personal information,as well as the satisfaction of at least one of the following conditions:(1)asecurity ass

124、essment organized by competent cybersecurity authorities has been passed;(2)certification of personal information protection from aspecialized institution in accordance with the provisions issued by competent cybersecurity authorities has been passed;(3)a 52022/12/13AMENDMENT NO.2 TO FORM F-1https:/

125、www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm12/255Table of Contentsmodel standard contract about both parties rights and obligations formulated by competent cybersecurity authorities with the overseas recipienthas been entered into;or(4)any other condition prescribed by

126、 laws,administrative regulations or by competent cybersecurity authorities has beensatisfied.These policies and any related implementation rules to be enacted may subject us to additional compliance requirement.As of the date ofthis prospectus,no official guidance or related implementation rules hav

127、e been issued in relation to these recently issued opinions,and theinterpretation and implementation of these opinions remain unclear at this stage.Moreover,the M&A Rules requires an overseas special purposevehicle that are controlled by PRC companies or individuals formed for the purpose of seeking

128、 a public listing on an overseas stock exchangethrough acquisitions of PRC domestic companies using shares of such special purpose vehicle or held by its shareholders as considerations toobtain the approval of the CSRC,prior to the listing and trading of such special purpose vehicles securities on a

129、n overseas stock exchange.However,the application of the M&A Rules remains unclear.On December 24,2021,the CSRC,together with other relevant government authorities in China issued the Provisions of the State Council onthe Administration of Overseas Securities Offering and Listing by Domestic Compani

130、es(Draft for Comments),and the Measures for the Filing ofOverseas Securities Offering and Listing by Domestic Companies(Draft for Comments),or collectively,Draft Overseas Listing Regulations.TheDraft Overseas Listing Regulations require that a PRC domestic enterprise seeking to issue and list its sh

131、ares overseas shall complete the filingprocedures with the CSRC.Such overseas securities issuance and listing include direct and indirect issuance and listing.Where an enterprise,whose principal business activities are conducted in China,seeks to issue and list its shares in the name of an overseas

132、entity,such practice isdeemed as an indirect overseas issuance and listing in the meaning of the Draft Overseas Listing Regulations.Therefore,our company will berequired to complete the filing procedures with the CSRC,if the Draft Overseas Listing Regulations become effective in their current form i

133、n thefuture.Neither we nor any of our subsidiaries has not obtained the approval or clearance from either the CSRC,the CAC or any other regulators inChina for this offering.We cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or anyfuture im

134、plementation rules on a timely basis,or at all.If we are subject to additional requirements that we obtain the approval or clearance fromeither the CSRC,the CAC or any other regulators in China for this offering but fail to obtain such approval or clearance,we will not be able topursue this offering

135、 any further.If we attempt to pursue this offering without obtaining such approval or clearance from regulators in China,nomatter it is rejected or granted but later rescinded,or if we inadvertently conclude that such approvals are not required,we may face severe andexpansive sanctions imposed by re

136、gulators in China,including fines and penalties on our operations in China,limitations on our operatingprivileges in China,delays in or restrictions on the repatriation of the proceeds from this offering into the PRC,restrictions on or prohibition of thepayments or remittance of dividends by our sub

137、sidiaries in China,forced delisting of the ADSs,or other actions that could have a material andadverse effect on our business,financial condition,results of operations,reputation and prospects,as well as the trading price of the ADSs.TheCSRC or other regulators in China may also take actions requiri

138、ng us,or making it advisable for us,to halt this offering before the settlement anddelivery of the ADSs that we are offering.Consequently,if you engage in market trading or other activities in anticipation of and prior to thesettlement and delivery of the ADSs we are offering,you would be doing so a

139、t the risk that the settlement and delivery may not occur.In addition,if the CSRC or other regulators in China later promulgate new rules or explanations requiring that we obtain their approvals for this offering,wemay be unable to obtain a waiver of such approval requirements.See“Risk FactorsRisks

140、Relating to Conducting Business in ChinaRecentregulatory developments in China may subject us to additional regulatory review or otherwise restrict or completely hinder our ability to offersecurities and raise capitals overseas,all of which could materially and adversely affect our business and caus

141、e the value of the ADSs tosignificantly decline or become worthless”and“Risks Relating to the ADSs and this OfferingThe approval of or clearance by the CSRC,theCAC and other compliance procedures may be required in connection with this offering,and,if required,we cannot predict whether we will be ab

142、leto obtain such approval or clearance.”62022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm13/255Table of ContentsCorporate History and StructureWe first started our business designing and developing high throughput computing solutio

143、ns through Zhejiang Haowei Technology Co.,Ltd.,or Zhejiang Haowei,incorporated in July 2019.On January 8,2021,we incorporated Nano Labs Ltd,our holding company,as an exemptedcompany with limited liability in the Cayman Islands.In 2021,we underwent a series of corporate reorganization in anticipation

144、 of our initialpublic offering,including incorporation of our company as the listing vehicle,incorporation of our oversea holding companies and issuance ofshares to shareholders of Zhejiang Haowei.In April 2021,we completed a one-for-10,000 shares subdivision,following which our authorized sharecapi

145、tal of US$50,000 is divided into 500,000,000 ordinary shares of US$0.0001 each.On July 12,2022,our ADSs representing Class A ordinaryshares commenced trading on the Nasdaq Global Market under the symbol of“NA.”The following diagram illustrates our corporate structure as of the date of this prospectu

146、s.(1)The remaining 35%equity interest is owned by Hangzhou Linan Mantefu Technology Co.,Ltd.,an unaffiliated third party.Holding Company StructureNano Labs Ltd is a holding company with no material operations of its own.We conduct our operations primarily through our subsidiaries inChina and Hong Ko

147、ng.As a result,Nano Labs Ltds ability to pay dividends depends upon dividends paid by our subsidiaries in China and HongKong.If our existing PRC and Hong Kong subsidiaries or any newly formed ones incur debt on their own behalf in the future,the instrumentsgoverning their debt may restrict their abi

148、lity to pay dividends to us.72022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm14/255Table of ContentsIn addition,our PRC subsidiaries are permitted to pay dividends to us only out of their retained earnings,if any,as determined in a

149、ccordancewith PRC accounting standards and regulations.Our PRC subsidiaries did not have aggregate retained earnings as determined under PRCaccounting standards as of December 31,2021.Pursuant to the Company Law of the Peoples Republic of China,or the PRC Company Law,ourPRC subsidiaries are required

150、 to make contribution of at least 10%of their after-tax profits calculated in accordance with the PRC GAAP to thestatutory common reserve.Contribution is not required if the reserve fund has reached 50%of the registered capital of our subsidiaries.As of June30,2022,our PRC subsidiaries had no restri

151、cted amount under the reserve fund.None of our PRC subsidiaries has issued any dividends or distributions to respective holding companies or any investors as of the date of thisprospectus.Our PRC subsidiaries generate and retain cash generated from operating activities and re-invest it in our busine

152、ss.Historically,our PRCsubsidiaries have also received equity financing from its shareholders to fund business operations of our PRC subsidiaries.In 2020 and 2021,wetransferred cash proceeds of nil and US$21.1 million to our PRC subsidiaries for the settlement of intercompany transactions and as pai

153、d-in capitalfor our PRC subsidiaries.In the future,cash proceeds raised from overseas financing activities,including this offering,may be,and are intended tobe,transferred by us through subsidiaries in Hong Kong to our PRC subsidiaries via capital contribution and shareholder loans,as the case may b

154、e.Subsidiaries in China that receives such cash proceeds then will transfer funds to its subsidiaries to meet the capital needs of our businessoperations.For details about the applicable PRC rules that limit transfer of funds from overseas to our PRC subsidiaries,see“Use of Proceeds”and“Risk Factors

155、Risks Related to Doing Business in ChinaPRC regulation of loans to and direct investment in PRC entities by offshore holdingcompanies and governmental control of currency conversion may delay or prevent us from using the proceeds of this offering to make loans oradditional capital contributions to o

156、ur PRC subsidiaries and affiliated entities.”The structure of cash flows within our organization,and the applicable regulations,are as follows.After foreign investors funds enter NanoLabs Ltd,our holding company,at the close of this offering,subject to the cash demand of our PRC and Hong Kong subsid

157、iaries,the funds can betransferred to our wholly owned Cayman subsidiaries,then to our wholly owned BVI subsidiaries,then to our Hong Kong subsidiaries,which willfurther distribute the funds to our PRC subsidiaries.If we intend to distribute dividends,PRC subsidiaries will transfer the dividends to

158、our HongKong subsidiaries in accordance with the laws and regulations of the PRC,and then our Hong Kong subsidiaries will transfer the dividends all theway up to Nano Labs Ltd,and the dividends will be distributed from Nano Labs Ltd to all shareholders respectively in proportion to the shares theyho

159、ld,regardless of whether the shareholders are U.S.investors or investors in other countries or regions.The cross-border transfer of funds withinour corporate group under our direct holding structure must be legal and compliant with relevant laws and regulations of China.In utilizing theproceeds from

160、 this offering,as an offshore holding company,we are permitted under PRC laws and regulations to provide funding to our PRCsubsidiaries only through loans or capital contributions and to our affiliated entities only through loans,subject to applicable government reporting,registration and approvals.

161、See“Use of Proceeds”and“Risk FactorRisks Relating to Conducting Business in ChinaPRC regulation of loans toand direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent usfrom using the proceeds of this offering to make loans

162、 or additional capital contributions to our PRC subsidiaries and affiliated entities.”We do nothave any present plan to pay any cash dividends on our ordinary shares in the foreseeable future after this offering.We have,from time to time,transferred cash between our PRC subsidiaries to fund their op

163、erations,and we do not anticipate any difficulties or limitations on our ability totransfer cash between such subsidiaries.As of the date of this prospectus,no cash generated from our PRC subsidiaries has been used to fundoperations of any of our non-PRC subsidiaries.We may encounter difficulties in

164、 our ability to transfer cash between PRC subsidiaries and non-PRC subsidiaries largely due to various PRC laws and regulations imposed on foreign exchange.However,as long as we are compliant with theprocedures for approvals from foreign exchange authorities and banks in China,the relevant laws and

165、regulations in China do not imposelimitations on the amount of funds that we can transfer out of China.We currently do not have any cash 82022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm15/255Table of Contentsmanagement policy that

166、 dictate the transfer of cash between our subsidiaries.See“RegulationPRC Laws and Regulations relating to ForeignExchange”for details of such procedures.We estimate that the net proceeds to us from this offering will be approximately US$4.4 million(at anassumed price of US$5.84,after deducting estim

167、ated underwriting discounts and commissions and estimated offering expenses payable by us),ofwhich approximately US$2.8 million will be transferred to our PRC subsidiaries for(1)research and development initiatives for more advancedASIC chips,smart-NICs,vision computing chips and our Metaverse compu

168、ting network platform,Ipolloverse,(2)the establishment of ourmanufacturing plant for product assembling and supply chain optimization,and(3)working capital and other general corporate activities withinChina.See“Use of Proceeds”for more details.Implications of Being an Emerging Growth CompanyAs a com

169、pany with less than US$1.07 billion in revenue for the last fiscal year,we qualify as an“emerging growth company”pursuant to theJumpstart Our Business Startups Act of 2012,or the JOBS Act.As such,we may take advantage of specified reduced reporting and otherrequirements that are otherwise applicable

170、 generally to public companies.These provisions include exemption from the auditor attestationrequirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of our internal control over financial reporting.Under theJOBS Act,an emerging growth company does not need to comply with a

171、ny new or revised financial accounting standards until the date that privatecompanies are required to do so.We have elected to take advantage of such exemption,and as a result,while we are an emerging growth company,we will not be subject to new or revised accounting standards at the same time that

172、they become applicable to other public companies that are notemerging growth companies.We will remain an emerging growth company until the earliest of(1)the last day of our fiscal year during which we have total annual grossrevenues of at least US$1.07 billion;(2)the last day of our fiscal year foll

173、owing the fifth anniversary of completion of our initial public offering;(3)the date on which we have,during the previous three-year period,issued more than US$1.0 billion in non-convertible debt;or(4)the date onwhich we are deemed to be a“large accelerated filer”under the Securities Exchange Act of

174、 1934,as amended,or the Exchange Act,which wouldoccur if we have been a public company for at least 12 months and the market value of the ADSs that are held by non-affiliates exceedsUS$700 million as of the last business day of our most recently completed second fiscal quarter.Once we cease to be an

175、 emerging growthcompany,we will not be entitled to the exemptions provided in the JOBS Act discussed above.Corporate InformationOur principal executive office is located at 30th Floor,Dikaiyinzuo,No.29,East Jiefang Road,Hangzhou,Zhejiang,Peoples Republic ofChina.Our telephone number at this address

176、is(86)0571-8665 6957.Our registered office in the Cayman Islands is located at PO Box 309,UglandHouse,Grand Cayman,KY1-1104,Cayman Islands.Investors should submit any inquiries to the address and telephone number of our principal executive offices.Our corporate website .The information contained on

177、our websites is not a part of this prospectus.Our agent for service of process in the United States isCogency Global Inc.located at 122 East 42nd Street,18th Floor,New York,NY 10168.Conventions that Apply to this ProspectusUnless we indicate otherwise and for the purpose of this prospectus only:“ADR

178、s”refers to the American depositary receipts,which,if issued,evidence the ADSs;“ADSs”refers to our American depositary shares,each of which represents two Class A ordinary shares;92022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm16/

179、255Table of Contents “CAGR”refers to compound annual growth rate;“China”and“PRC”refers to the Peoples Republic of China,excluding,for the purposes of this prospectus only,Taiwan,the HongKong Special Administrative Region and the Macau Special Administrative Region;“Class A ordinary shares”refers to

180、our Class A ordinary shares,par value US$0.0001 per share;“Class B ordinary shares”refers to our Class B ordinary shares,par value US$0.0001 per share;“hash rate”refers to the processing power of the cryptocurrency network and represents the number of computations that is processedby the network in

181、a given time period;“ICs”or“chips”refers to integrated circuits;“nm”refers to nanometer(1 meter=1,000,000,000 nanometers);“RMB”and“Renminbi”refers to the legal currency of China;“shares”and“ordinary shares”refers to prior to the completion of this offering,our pre-offering ordinary shares,and upon a

182、nd afterthe completion of this offering,are to our Class A ordinary shares and our Class B ordinary shares;“TH/s”and“GH/s”refers to the measuring unit of hash rate,which represent the processing power of the cryptocurrency miningmachine.1 TH/s=1,000 GH/s;“US$”and“U.S.dollars”refers to the legal curr

183、ency of the United States of America;and “we,”“us,”“our company,”“our,”and“our group”refers to Nano Labs Ltd,our Cayman Islands holding company,its predecessorentity and its subsidiaries,as the context requires.Unless the context indicates otherwise,all information in this prospectus assumes no exer

184、cise by the underwriters of their option to purchaseadditional ADSs.We have made rounding adjustments to reach some of the figures included in this prospectus.Consequently,numerical figures shown astotals in some tables may not be arithmetic aggregations of the figures that precede them.Our reportin

185、g and functional currency is Renminbi.This prospectus contains translations of certain foreign currency amounts into U.S.dollars for the convenience of the reader.Unless otherwise stated,all translations of Renminbi into U.S.dollars were made at RMB6.7114 toUS$1.00,representing the central parity ra

186、te on June 30,2022 published by the Peoples Bank of China,except for the translation of Renminbi intoU.S.dollars for the consolidated balance sheet data as of December 31,2021 and consolidated statement of operation data and consolidatedstatement of cash flows data for the year ended December 31,202

187、1,which were made at RMB6.3757 to US$1.00,representing the central parityrate on December 31,2021 published by the Peoples Bank of China.We make no representation that the Renminbi or U.S.dollar amounts referredto in this prospectus could have been or could be converted into U.S.dollars or Renminbi

188、at any particular rate or at all.On September 5,2022,thenoon buying rate for Renminbi was RMB6.8998 to US$1.00.102022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm17/255Table of ContentsThe Offering Offering price per ADSUS$per ADS A

189、DSs offered by us860,000 ADSs(or 989,000 ADSs if the underwriters exercise in full their option topurchase additional ADSs).ADSs issued and outstanding immediately after thisoffering2,630,000 ADSs(or 2,759,000 ADSs if the underwriters exercise in full their option topurchase additional ADSs).Ordinar

190、y shares issued and outstanding immediatelyafter this offering51,871,846 Class A ordinary shares and 57,178,154 Class B ordinary shares(or 52,129,846Class A ordinary shares and 57,178,154 Class B ordinary shares if the underwritersexercise in full their option to purchase additional ADSs).ADSsEvery

191、ADS represents two Class A ordinary shares,par value US$0.0001 per share.The depositary,or its nominee,will hold the underlying Class A ordinary sharesrepresented by the ADSs and you will have the rights as provided in the deposit agreementamong us,the depositary and holders and beneficial owners of

192、 ADSs from time to time.We do not expect to pay dividends in the foreseeable future.If,however,we declaredividends on our ordinary shares,the depositary will pay you the cash dividends and otherdistributions it receives on our Class A ordinary shares after deducting its fees andexpenses in accordanc

193、e with the terms set forth in the deposit agreement.You may turn in your ADSs to the depositary in exchange for the underlying Class Aordinary shares,subject to the terms of the deposit agreement relating to the ADSs.Thedepositary will charge you fees for any such exchange.We may amend or terminate

194、the deposit agreement without your consent.If you continue tohold your ADSs after an amendment to the deposit agreement,you agree to be bound bythe deposit agreement as amended.You should carefully read the section in this prospectus entitled“Description of AmericanDepositary Shares”to better unders

195、tand the terms of the ADSs.You should also read thedeposit agreement,which is an exhibit to the registration statement that includes thisprospectus.Ordinary SharesOur issued and outstanding share capital consists of Class A ordinary shares and Class Bordinary shares.In respect of all matters subject

196、 to a shareholder vote,each Class Aordinary share is entitled to one 112022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm18/255Table of Contents vote,and each Class B ordinary share is entitled to 15 votes,voting together as one clas

197、s.Each Class B ordinary share is convertible into Class A ordinary share at any time by theholder thereof.Class A ordinary shares are not convertible into Class B ordinary sharesunder any circumstances.Upon any sale,transfer,assignment or disposition of Class Bordinary shares by a holder thereof to

198、any person other than Mr.Jianping Kong and Mr.Qifeng Sun,the founders of our company or an affiliate of Mr.Jianping Kong and Mr.Qifeng Sun,or upon a change of ultimate beneficial ownership of any Class B ordinaryshares to any person who is not Mr.Jianping Kong and Mr.Qifeng Sun or an affiliate ofMr.

199、Jianping Kong and Mr.Qifeng Sun,such Class B ordinary shares shall beautomatically and immediately converted into the same number of Class A ordinary shares.For a description of Class A ordinary shares and Class B ordinary shares,see“Descriptionof Share Capital.”Option to purchase additional ADSsWe

200、have granted to the underwriters an option,exercisable within 30 days from the date ofthis prospectus,to purchase up to an aggregate of 129,000 additional ADSs at the publicoffering price,less underwriting discounts and commissions.Use of ProceedsWe estimate that we will receive net proceeds of appr

201、oximately US$4.4 million(or US$5.1million if the underwriters exercise in full their option to purchase additional ADSs)fromthis offering at an assumed price of US$5.84 per ADS,after deducting underwritingdiscounts and commissions and estimated offering expenses payable by us.We anticipate using the

202、 net proceeds of this offering primarily for research anddevelopment,supply chain optimization,establishment of overseas headquarters andgeneral corporate purposes.See“Use of Proceeds”for more information.Lock-upWe,our directors and executive officers,and existing shareholders have agreed,subject to

203、certain exceptions,not to sell,transfer or otherwise dispose of any ADSs,ordinary sharesor similar securities or any securities convertible into or exchangeable or exercisable forour ordinary shares or ADSs,for a period of 180 days after July 11,2022 pursuant to theunderwriting agreement dated July

204、11,2022 in connection with our initial public offering.See“Shares Eligible for Future Sale”and“Underwriting.”ListingOur ADSs are listed on the Nasdaq Global Market under the symbol“NA.”“NA.”DepositaryCitibank,N.A.Payment and settlementThe underwriters expect to deliver the ADSs against payment on ,2

205、022,throughthe facilities of The Depository Trust Company,or DTC.122022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm19/255Table of ContentsRisk FactorsSee“Risk Factors”and other information included in this prospectus for a discussi

206、on ofrisks you should carefully consider before investing in the ADSs.The total number of ordinary shares that will be issued and outstanding immediately after this offering is based upon:50,151,846 Class A ordinary shares and 57,178,154 Class B ordinary shares issued and outstanding as of the date

207、of this prospectus;and 1,720,000 Class A ordinary shares in the form of ADSs that we will issue and sell in this offering,assuming the underwriters do notexercise their option to purchase additional ADSs.132022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/00011931252

208、2238841/d384713df1a.htm20/255Table of ContentsSummary Consolidated Financial DataThe following summary consolidated statements of operations data for the years ended December 31,2020 and 2021 and the six monthsended June 30,2021 and 2022,the summary consolidated balance sheets data as of December 31

209、,2020 and 2021 and June 30,2022,and thesummary consolidated statements of cash flows data for the years ended December 31,2020 and 2021 and the six months ended June 30,2021 and2022 have been derived from the audited and unaudited consolidated financial statements included elsewhere in this prospect

210、us.You should readthe following information in conjunction with those financial statements and accompanying notes included elsewhere in this prospectus and“Managements Discussion and Analysis of Financial Condition and Results of Operations.”Our audited and unaudited consolidated financialstatements

211、 have been prepared in accordance with U.S.generally accepted accounting principles,or U.S.GAAP.Historical results for any priorperiod are not necessarily indicative of results to be expected for any future period.Summary Consolidated Statements of Operations Data Years Ended December 31,Six Months

212、Ended June 30,2020 2021 2021 2022 RMB RMB RMB RMB US$(Unaudited)(Unaudited)(Unaudited)Net revenues:Product sales revenue 2,004,074 39,440,897 22,823,678 319,193,707 47,559,929 Service revenue 122,602 60,945,060 9,080,827 Total net revenues 2,126,676 39,440,897 22,823,678 380,138,767 56,640,756 Cost

213、of revenues 1,270,544 43,530,708 11,574,779 203,767,419 30,361,388 Gross profit(loss)856,132 (4,089,811)11,248,899 176,371,348 26,279,368 Operating expenses:Selling and marketing expenses 108,567 5,119,072 43,870 10,165,237 1,514,622 General and administrative expenses 3,187,033 24,121,823 11,497,79

214、5 16,885,396 2,515,928 Research and development expenses 34,476,484 145,455,181 33,929,137 41,692,574 6,212,202 Total operating expenses 37,772,084 174,696,076 45,470,802 68,743,207 10,242,752 Profit(loss)from operations (36,915,952)(178,785,887)(34,221,903)107,628,141 16,036,616 Other expenses(inco

215、me):Finance expenses(income)3,747 509,764 132,914 (636,158)(94,788)Interest income (17,915)(3,495,208)(619,876)(1,860,642)(277,236)Other expenses(income)800,000 (855,959)(393,876)(1,268,583)(189,019)Total other expenses(income)785,832 (3,841,403)(880,838)(3,765,383)(561,043)Income(loss)before income

216、 tax provision (37,701,784)(174,944,484)(33,341,065)111,393,524 16,597,659 Income tax provision 2,293 Net income(loss)(37,704,077)(174,944,484)(33,341,065)111,393,524 16,597,659 142022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm21/

217、255Table of ContentsSummary Consolidated Balance Sheets Data As of December 31,As of June 30,2020 2021 2022 RMB RMB RMB US$(Unaudited)(Unaudited)ASSETS:Current assets Cash and cash equivalents 35,333,172 233,853,654 51,409,197 7,659,981 Short-term investments 31,888,500 Accounts receivable,net 1,165

218、,716 Inventories,net 7,238,293 213,870,251 392,691,276 58,511,082 Prepayments 7,985,676 372,355,129 264,126,602 39,354,919 Due from related party 4,390,000 Other current assets 2,895,895 41,460,490 35,372,460 5,270,504 Total current assets 59,008,752 893,428,024 743,599,535 110,796,486 Non-current a

219、ssets Property and equipment,net 1,066,759 7,249,044 6,713,620 1,000,331 Intangible asset,net 99,301 49,210,055 7,332,308 Long-term prepaid expense 550,000 Operating lease right-of-use assets 768,678 9,155,665 6,618,669 986,183 Total non-current assets 2,484,738 16,404,709 62,542,344 9,318,822 TOTAL

220、 ASSETS 61,493,490 909,832,733 806,141,879 120,115,308 LIABILITIES AND SHAREHOLDERS EQUITY(DEFICIT)Current liabilities:Accounts payable 899,687 2,837,638 7,313,610 1,089,729 Accounts payable related party 4,716,981 Advance from customers 65,404,664 917,391,899 696,894,165 103,837,376 Loan payable 5,

221、000,000 Due to related parties 31,355,000 Operating lease liabilities,current 462,313 5,224,757 3,429,724 511,030 Other current liabilities 1,898,524 6,917,757 4,350,494 648,223 Total current liabilities 109,737,169 932,372,051 711,987,993 106,086,358 Non-current liabilities:Operating lease liabilit

222、ies,non-current 276,653 2,122,357 1,411,472 210,310 TOTAL LIABILITIES 110,013,822 934,494,408 713,399,465 106,296,668 Shareholders equity(deficit):Ordinary shares(US$0.0001 par value;500,000,000 shares authorized;79,249,000,103,790,000 and 103,790,000 shares issued andoutstanding as of December 31,2

223、020,December 31,2021 and June30,2022,respectively)51,135 66,970 66,970 9,979 Additional paid-in capital 163,747 201,418,380 206,092,053 30,707,759 Accumulated deficit (48,735,214)(223,679,698)(112,286,174)(16,730,663)Accumulated other comprehensive loss (2,467,327)(1,130,435)(168,435)Total sharehold

224、ers equity(deficit)(48,520,332)(24,661,675)92,742,414 13,818,640 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY(DEFICIT)61,493,490 909,832,733 806,141,879 120,115,308 152022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm22/255Table of Cont

225、entsSummary Consolidated Statements of Cash Flows Data Years Ended December 31,Six Months Ended June 30,2020 2021 2021 2022 RMB RMB RMB RMB US$(Unaudited)(Unaudited)(Unaudited)Net cash provided by(used in)operating activities (3,027,899)71,732,868 299,635,175 (165,241,380)(24,620,998)Net cash used i

226、n investing activities (1,646,776)(36,046,123)(18,043,834)(18,655,969)(2,779,743)Net cash provided by financing activities 29,365,000 164,896,124 10,746,119 Effects of exchange rate changes on cash and cashequivalents (2,062,387)1,452,892 216,479 Net increase(decrease)in cash and cash equivalents 24

227、,690,325 198,520,482 292,337,460 (182,444,457)(27,184,262)Cash and cash equivalents at the beginning of theyear/period 10,642,847 35,333,172 35,333,172 233,853,654 34,844,243 Cash and cash equivalents at the end of the year/period 35,333,172 233,853,654 327,670,632 51,409,197 7,659,981 162022/12/13A

228、MENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm23/255Table of ContentsRISK FACTORSAn investment in our ADSs involves significant risks.You should carefully consider all of the information in this prospectus,including the risksand uncertainti

229、es described below,before making an investment in our ADSs.Any of the following risks could have a material adverse effect on ourbusiness,financial condition and results of operations.The trading price of our ADSs could decline due to any of these risks and you may lose all orpart of your investment

230、.When determining whether to invest,you should also refer to the other information contained in this prospectus,including ourfinancial statements and the related notes thereto.You should also carefully review the cautionary statements referred to under“Forward-lookingStatements.”Our actual results c

231、ould differ materially and adversely from those anticipated in this prospectus.Risks Relating to Our BusinessWe may fail to anticipate or adapt to technology innovations in a timely manner,so our IC design may fail to gain recognition from the customersand the IC design industry.The IC design indust

232、ry is experiencing rapid technological changes.Failure to anticipate technology innovations or adapt to such innovations in atimely manner,or at all,may result in our products becoming obsolete at sudden and unpredictable intervals.As a result,our IC design may fail to gainrecognition from the custo

233、mers and the industry,which could materially and adversely affect our business,results of operations or financial condition.To maintain the relevancy of our products,we have actively invested in product planning and research and development.The process of developing andmarketing new products is inhe

234、rently complex and involves significant uncertainties.We cannot assure you that our efforts will bring customers andindustry recognition.There are various risks,including the following:our product planning efforts may fail to result in the development or commercialization of new technologies or idea

235、s;our research and development efforts may fail to translate new product plans into commercially feasible products;our new technologies or new products may not be well received by consumers;we may not have adequate funding and resources necessary for continual investments in product planning and res

236、earch and development;our products may become obsolete due to rapid advancements in technology and changes in consumer preferences;and our newly developed technologies may not be protected as proprietary intellectual property rights.Any failure to anticipate the next-generation technology roadmap or

237、 changes in customer preferences or to timely develop new or enhancedproducts in response could result in decreased revenue and market share.In particular,we may experience difficulties with product design,productdevelopment,marketing or certification,which could result in excessive research and dev

238、elopment expenses and capital expenditure,delays or preventour introduction of new or enhanced products.Furthermore,our research and development efforts may not yield the expected results or may prove to befutile due to the lack of market demand.Our results of operations have been and are expected t

239、o continue to be significantly impacted by the volatility of the cryptocurrency market,and inparticular,the sharp price decrease of cryptocurrencies.Our products,including HTC and HPC solutions and distributed computing and data storage solutions,are currently designed primarily for themining of var

240、ious cryptocurrencies,such as Bitcoin,Ethereum,Ethereum Classic,Grin and Filecoin.The demand for,and pricing of,our products aretherefore affected by the expected economic returns of mining activities for these cryptocurrencies,which in turn are primarily driven by,among 172022/12/13AMENDMENT NO.2 T

241、O FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm24/255Table of Contentsother factors,the prices.The cryptocurrency market is highly volatile,and the prices of Bitcoin,Ethereum,Ethereum Classic,Grin and Filecoin haveexperienced significant fluctuations over

242、their short existence and may continue to fluctuate significantly in the future.For example,the overall price ofBitcoin is on an upward trend,however,there have been some significant decreases in late 2018,early 2020 and early 2021,according to the F&Sreport.Historically,our revenues were primarily

243、derived from the sales of our HTC solutions in relation to Ethereum and Grin mining and HPC solutionsfor Bitcoin mining.We expect our results of operations to be affected by the prices of cryptocurrencies,in particular,significantly and negativelyimpacted by the sharp price decrease of the prices of

244、 cryptocurrencies including Bitcoin,Ethereum,Ethereum Classic,Grin and Filecoin.Although wehave begun the delivery of these new products in 2022,a diversified offering of mining solution types is unlikely to spread the risk of volatility as theprices of mainstream cryptocurrencies are highly correla

245、ted.We cannot assure you that the cryptocurrency market will remain active enough to sustainthe demand for our current and future mining machines or that the prices for any of these cryptocurrencies will not decline significantly in the future.Furthermore,fluctuations in the prices of cryptocurrenci

246、es,in particular,Bitcoin,Ethereum,Ethereum Classic,Grin and Filecoin,can have animmediate impact on the trading price of the companies operating in the cryptocurrency industry,including the ADSs,even before our financialperformance is affected,if at all.In addition to the market volatility,various o

247、ther factors,mostly beyond our control,could impact the prices of cryptocurrencies.For example,theusage of Bitcoins in the retail and commercial marketplace is relatively low in comparison with the usage for speculation,which contributes to Bitcoinprice volatility.If the price of cryptocurrencies su

248、ch as Bitcoin,Ethereum,Ethereum Classic,Grin or Filecoin drops and fails to recover,the expected economicreturn of such mining activities will diminish,which could result in a decrease in demand for our current and future HTC and HPC solutions anddistributed computing and data storage solutions.As a

249、 result,we may need to reduce the price of our HTC and HPC solutions and distributed computingand data storage solutions.At the same time,if transaction fees for these cryptocurrencies increase to such an extent as to discourage users from usingthem as a medium of exchange,it may decrease the transa

250、ction volume of the relevant network and may affect the demand for our current and futureHTC and HPC solutions and distributed computing and data storage solutions.In addition,any shortage of power supply due to government controlmeasures or other reasons,and any increase in energy costs,would raise

251、 the costs of mining activities.This in turn could affect the expected economicreturn to our customers for their mining activities and the demand for and pricing of our current and future HTC and HPC solutions and distributedcomputing and data storage solutions.Furthermore,fluctuations in the prices

252、 of Bitcoin,Ethereum,Ethereum Classic,Grin or Filecoin may affect thevalue of our inventory as well as the provision we make to the inventory as we manage our inventory based on,among others,the sales forecast ofcurrent and future HTC and HPC solutions and distributed computing and data storage solu

253、tions.If we increase our procurement volume and stock upfinished goods for the launch of new products or we expect a surge of demand of certain HTC and HPC solutions,a significant drop in the prices ofBitcoin,Ethereum,Ethereum Classic,Grin or Filecoin can lead to a lower expected sales price and exc

254、essive inventory,which in turn will lead toimpairment losses with respect to such inventory.If the prices of Bitcoin,Ethereum,Ethereum Classic,Grin or Filecoin drop significantly in the future,we may need to record write-down for potentially obsolete,slow-moving inventory.For example,we recorded an

255、inventory write-down of RMB26.8million(US$4.2 million)in the cost of revenues in 2021 due to the downward adjustment on the book value of a portion of our inventory in response tothe decrease in the market price of cryptocurrency and expected economic return on cryptocurrency mining.To the extent th

256、at we are able to sell suchinventory above its carrying value,our gross profit may also be inflated by such write down.The price drop of cryptocurrencies may also adversely impact the ability of our customers who made down payments for our current or futureHTC and HPC solutions and distributed compu

257、ting and data storage solutions to make final payments.We usually require full payment to be paid beforethe delivery of our products.If the prices of Bitcoin,Ethereum,Ethereum Classic,Grin or Filecoin drop significantly in the future,we may need to 182022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.se

258、c.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm25/255Table of Contentsoffer to certain of our customers price concession in the case where they encounter the difficulties for making the final payments,even if we generallydo not offer a price concession to customers.If we provide

259、 any price concession to our customers in the future,our revenues and results of operationsmay be adversely affected.We have derived and may continue to derive revenues primarily from our HTC and HPC solutions.We also expect to generate significant revenuesfrom HPC solutions in the future.If the mar

260、ket for HTC and HPC solutions ceases to exist or diminishes significantly,our business,results ofoperations and financial condition would be materially and adversely affected.Historically,our revenues were primarily derived from the sales of our HTC solutions in relation to Ethereum and Grin mining

261、and HPC solutionsfor Bitcoin mining.In 2020,2021 and the six months ended June 30,2021 and 2022,sales of our HTC and HPC solutions accounted for 94.2%,100.0%,100.0%and 84.0%of our total revenues,respectively,and our advance from customers was RMB696.9 million(US$103.8 million)as of June 30,2022.We e

262、xpect to generate,in the foreseeable future,a significant portion of our revenues from sales of our HTC and HPC solutions.If the market for any of the above-mentioned mining solutions ceases to exist or diminishes significantly,we would experience a significant lossof sales,cancelation of orders,or

263、loss of customers for our current and future mining machines.Adverse factors that may affect the market for our current and future mining machines include:Another cryptocurrency,especially one that is not created using the same mining processes as Bitcoin,Ethereum,Ethereum Classic,Grinor Filecoin,em

264、erges as a new mainstream cryptocurrency and squeezes Bitcoin,Ethereum,Ethereum Classic,Grin or Filecoin out of themarket,thereby causing these cryptocurrencies to lose value or become worthless,which could adversely affect the sustainability of ourbusiness.Bitcoin,Ethereum,Ethereum Classic,Grin or

265、Filecoin fails to gain wide market acceptance and fails to become a generally acceptedmedium of exchange in the global economy due to certain inherent limitations to cryptocurrencies.Over time,the reward for blockchain mining will decline in terms of the amount of cryptocurrency awarded,which may re

266、duce theincentive to mine these cryptocurrencies.Therefore,our HTC and HPC solutions and distributed computing and data storage solutions maybecome less productive as the available rewards for cryptocurrency mining decrease.If we cannot maintain the scale and profitability of our HTC and HPC solutio

267、ns and distributed computing and data storage solutions and,at thesame time,successfully expand our business in other application markets,our business,results of operations,financial condition and prospects willsuffer.Furthermore,excess inventory,inventory markdowns,brand image deterioration and mar

268、gin squeeze caused by declining economic returns forminers or pricing competition for our HTC and HPC solutions and distributed computing and data storage solutions could all have a material andadverse effect on our business,results of operations and financial condition.Moreover,as we only had limit

269、ed experience in the commercialization ofHTC and HPC solutions,we cannot assure you that our HTC and HPC solutions and distributed computing and storage solutions to be launched will bewell received among the miners of these cryptocurrencies,nor can we assure you that the demand for these products w

270、ill be strong enough for us torecover the research and development expenses incurred in relation to the development of these products.If our efforts to market these new productsfail,or the demand for these products turns out to be weaker than we expected,our business,results of operations and financ

271、ial condition may bematerially and adversely affected.192022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm26/255Table of ContentsWe face risks associated with the expansion of our business operations overseas and if we are unable to

272、effectively manage such risks,our businessgrowth and profitability may be negatively affected.We intend to grow our business in part by expanding our sales network and operations internationally beyond China.Our expansion plans includeestablishing offices for sales,research and development and other

273、 operations in Singapore and the United States.However,there are risks associatedwith such global expansion plans,including:high costs of investment to establish a presence in a new market and manage international operations;competition in unfamiliar markets;foreign currency exchange rate fluctuatio

274、ns;regulatory differences and difficulties in ensuring compliance with multi-national legal requirements and multi-national operations;changes in economic,legal,political or other local conditions in new markets;our limited customer base and limited sales and relationships with international custome

275、rs;competitors in the overseas markets may be more dominant and have stronger ties with customers and greater financial and otherresources;challenges in managing our international sales channels effectively;difficulties in and costs of exporting products overseas while complying with the different c

276、ommercial,legal and regulatory requirementsof the overseas markets in which we offer our products;difficulty in ensuring that our customers comply with the sanctions imposed by the Office of Foreign Assets Control in the United Statesand regulators in other countries and regions,on various foreign s

277、tates,organizations and individuals;inability to obtain,maintain or enforce intellectual property rights;inability to effectively enforce contractual or legal rights or intellectual property rights in certain jurisdictions where we operate;and governmental policies favoring domestic companies in cer

278、tain foreign markets or trade barriers including export requirements,tariffs,taxesand other restrictions and charges.In particular,a worldwide trend in favor of nationalism and protectionist trade policy and the ongoingtrade dispute between the United States and China as well as other potential inte

279、rnational trade disputes could cause turbulence ininternational markets.These government policies or trade barriers could increase the prices of our products and make us less competitivein such countries.If we are unable to effectively manage such risks,we may encounter difficulties in our overseas

280、expansion plans and our business,reputation,results of operations and financial condition may be impaired.Our business growth is dependent on the development of blockchain technology and applications,particularly in the field of Bitcoin,Ethereum,Ethereum Classic,Grin and Filecoin.Historically,our re

281、venues were primarily derived from the sales of our HTC solutions in relation to Ethereum and Grin mining and HPC solutionsfor Bitcoin mining.The development of blockchain technology is still in a relatively early stage,and we cannot assure you that blockchain applications,including those in the fie

282、lds of cryptocurrencies and other areas such as artificial intelligence,will gain wide market acceptance.Any blockchainapplication may become redundant or obsolete with the introduction of new competing technologies or products.If market acceptance or confidence inblockchain technology is lost or re

283、duced for any reason,such as due to cybersecurity issues,the demand for our existing or future blockchain productsmay decline.202022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm27/255Table of ContentsOur blockchain mining solution b

284、usiness depends significantly on the development of cryptocurrency applications,in particular,Bitcoin,Ethereum,Ethereum Classic,Grin and Filecoin applications.The cryptocurrency market is rapidly and continuously evolving.Any actual or perceivedadverse development in Bitcoin or other cryptocurrencie

285、s can significantly affect market demand for mining activities and our HTC and HPC solutionsand distributed computing and data storage solutions.In addition,any event or rumor that generates negative publicity for the cryptocurrency marketcould hinder the development and reduce market acceptance of

286、cryptocurrency applications.Under such circumstances,our business,results ofoperations and financial condition could be materially and adversely affected.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 ontoour

287、suppliers such decreases,which may in turn adversely affect our profitability.The IC design industry is characterized by rapid launches of new products,continuous technological advancements,and changing market trendsand customer preferences,all of which translate to a shorter life cycle and a gradua

288、l decrease in the average selling prices of products over time.Because we compete in the environment of rapidly-evolving technology advancement and market trends and developments of the IC design industry,wemay need to lower the price of our products to gain stronger market competitiveness and we ca

289、nnot assure you that we will be able to pass on anydecrease in average selling prices of our products to our suppliers.If the average selling prices of our products unusually or significantly decrease andsuch decreases cannot be offset by a corresponding decrease in the prices of the principal compo

290、nents of our products,our gross profit margins may bematerially and adversely affected,which in turn,may adversely affect our profitability.If Bitcoin,Ethereum or Grin loses its popularity or is replaced by other cryptocurrencies as the mainstream cryptocurrencies,we may not be able towin the market

291、 for our future mining machines and our results of operations will be materially and adversely affected.Historically,our revenues were primarily derived from the sales of our HTC solutions in relation to Ethereum and Grin mining and HPC solutionsfor Bitcoin mining.As of the date of this prospectus,w

292、e have pre-sold and recognized revenue from sales of our Bitcoin and Ethereum mining solutionsto our customers.We face the risk that other cryptocurrencies could replace Bitcoin and Ethereum as the mainstream cryptocurrencies,which may inturn negatively impact the value of Bitcoin and Ethereum and d

293、iminish interest in mining Bitcoin and Ethereum.We also face the risk of Grin losing itspopularity.Acceptance of Bitcoin,Ethereum and Grin may decline due to various reasons such as the following:potential changes in algorithms or source code may negatively impact user acceptance;patches,upgrades,at

294、tacks or hacking of relevant infrastructure may undermine user interest or confidence;usage of Bitcoin,Ethereum or Grin for illicit or illegal activities by bad actors may erode public perception of Bitcoin or Ethereum;or hacking,fraud or other problems with cryptocurrency exchanges,wallets or other

295、 related infrastructure may negatively impact userconfidence.If fewer people accept Bitcoin,Ethereum or Grin or fewer merchants accept Bitcoin,Ethereum or Grin as a payment method and alternative assetsor Bitcoin,Ethereum or Grin mining being restricted or prohibited due to the changes of the releva

296、nt laws and regulations,Bitcoin,Ethereum and Grinmay decline in value.For example,although Bitcoin is currently the largest cryptocurrency by market capitalization,a substantial amount of Bitcoin-related transactions may be speculation-related and a technological breakthrough in the form of a better

297、 cryptocurrency is a continuous threat.Othercryptocurrencies may be designed with algorithms that are not compatible with the kind of computing done by ASIC chip mining machines.If such acryptocurrency were to become dominant,our existing technological know-how may not be applicable in creating hard

298、ware for participants in thatcryptocurrency network,and we may face greater competition from new players.In addition,since the value of and support for Bitcoin,Ethereum orGrin depend entirely on the community using it,any 212022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1

299、872302/0008841/d384713df1a.htm28/255Table of Contentsdisagreement between the users may result in the splitting of the network to support other cryptocurrencies and the users may sell all their Bitcoin,Ethereum and Grin and switch to other cryptocurrencies.As a result,our future blockchai

300、n mining solutions and our results of operations would bematerially and adversely affected.Our IC products mainly depend on supplies from third-party foundries,and any failure to obtain sufficient foundry capacity from such foundrieswould significantly delay the shipment of our products.As a fabless

301、 IC design company,we do not own any IC fabrication facilities.We currently work with two leading foundries as our main ICfabrication partners and place purchase orders according to our business needs.It is important for us to have a reliable relationship with third-partyfoundries as well as other f

302、uture foundry service providers to ensure adequate product supply to respond to customer demand.We cannot guarantee that our foundry service providers will be able to meet our manufacturing requirements.The ability of our foundry serviceproviders to provide us with foundry services is limited by the

303、ir technology migration,available capacity and existing obligations.If any of our foundryservice providers fails to succeed in its technology migration,it will not be able to deliver to us qualified ICs,which will significantly affect ourtechnological advancement and shipment of our products and sol

304、utions.This could in turn result in lost sales and have a material adverse effect on ourrelationships with our customers and on our business and financial condition.In addition,we do not have a guaranteed level of production capacity fromour foundry service providers.We do not have long-term contrac

305、ts with them,and we source our supplies on a purchase order basis and prepay thepurchase amount.As a result,we depend on our foundry service providers to allocate to us a portion of its manufacturing capacity sufficient to meet ourneeds,produce products of acceptable quality and at acceptable final

306、test yields and deliver those products to us on a timely basis and at acceptableprices.If any of our foundry service providers raises its prices or is unable to meet our required capacity for any reason,such as shortages or delays inthe shipment of semiconductor equipment or raw materials required t

307、o manufacture our ICs,or if our business relationships with any of our foundryservice providers deteriorate,we may not be able to obtain the required capacity and would have to seek alternative foundries,which may not beavailable on commercially reasonable terms,or at all.Moreover,it is possible tha

308、t other customers of any of our foundry service providers that are largerand/or better financed than we are,or that have long-term contracts with it,may receive preferential treatment in terms of capacity allocation or pricing.In addition,if we do not accurately forecast our capacity needs,any of ou

309、r foundry service providers may not have available capacity to meet ourimmediate needs or we may be required to pay higher costs to fulfill those needs,either of which could materially and adversely affect our business,results of operations or financial condition.In particular,the production of our

310、IC products may require advanced IC fabrication technologies,and some third-party foundries we partner withmight 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 foundr

311、ies with which we have not established relationships could expose us to potentially unfavorablepricing,unsatisfactory quality or insufficient capacity allocation.Other risks associated with our dependence on third-party foundries include limited control over delivery schedules and quality assurance,

312、lack ofcapacity in periods of excess demand,unauthorized use of our intellectual property and limited ability to manage inventory and parts.In particular,although we have entered into confidentiality agreements with our third-party foundries for the protection of our intellectual property,they may n

313、otprotect our intellectual property with the same degree of care as we use to protect our intellectual property.If we fail to properly manage any of theserisks,our business and results of operations may be materially and adversely affected.Moreover,if any of our foundry service providers suffers any

314、 damage to its facilities,suspends manufacturing operations,loses benefits undermaterial agreements,experiences power outages or computer virus attacks,lacks sufficient capacity to manufacture our products,encounters financialdifficulties,is unable to secure necessary raw materials from its supplier

315、s or suffers any other disruption or reduction in efficiency,we may encountersupply delays or disruptions.222022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm29/255Table of ContentsWe rely on a limited number of third parties for IC

316、packaging and testing services.Fabrication of ICs requires specialized services to process the silicon wafers into ICs by packaging them and to test their proper functioning.Weprimarily collaborate with a lending packaging and testing service provider for such services,which may expose us to a numbe

317、r of risks,includingdifficulties in finding alternate suppliers,capacity shortages or delays,lack of control or oversight in timing,quality or costs,and misuse of ourintellectual property.If any such problems arise with our packaging and testing partners,we may experience delays in our production an

318、d deliverytimeline,inadequate quality control of our products or excessive costs and expenses.As a result,our financial condition,results of operations,reputationand business may be adversely affected.Shortages in,or rises in the prices of,the components of our HTC and HPC solutions and distributed

319、computing and storage solutions mayadversely affect our business.Given the long production period to manufacture,assemble,and deliver certain components and products,problems could arise in planningproduction and managing inventory levels that could seriously interrupt our operations,including the p

320、ossibility of defective parts,an increase incomponent costs,delays in delivery schedules,and shortages of components.In addition to ICs,the components we use for our mining machines includeprinted circuit boards,other electronic components,fans,and aluminum casings.The production of our mining machi

321、nes also requires certain ancillaryequipment and components such as controllers,power adaptors,and connectors.The production of our current products depends on obtaining adequatesupplies of these components on a timely basis and at competitive prices.We do not typically maintain large inventory of t

322、he components,and ratherpurchase them on an“as-needed”basis from various third-party component manufacturers that satisfy our quality standards and meet our productionrequirements.We may have to turn to less reputable suppliers if we cannot source adequate components from our regular suppliers.Under

323、 suchcircumstances,the quality of the components may suffer and could cause performance issues in our HTC and HPC solutions and distributed computingand storage solutions.Shortages of components could result in reduced production or delays in production,as well as an increase in production costs,whi

324、ch maynegatively affect our ability to fulfill orders or make timely shipments to our customers,as well as our customer relationships and profitability.Component shortages may also increase our costs of products sold because we may be required to pay higher prices for components in short supply,orre

325、design or reconfigure products to accommodate for the substitute components,without being able to pass such cost to our customers.As a result,ourbusiness,results of operations and reputation could be materially and adversely affected by any product defects.Failure at tape-out or failure to achieve t

326、he expected final test yields for our ICs could negatively impact our results of operations.The tape-out process is a critical milestone in our business.A tape-out means all the stages in the design and verification process of our ICs havebeen completed,and the chip design is sent for manufacturing.

327、The tape-out process requires considerable investment in time and resources and closecooperation with the wafer foundry,and repeated failures can significantly increase our costs,lengthen our product development period,and delay ourproduct launch.If the tape-out or testing of a new chip design fails

328、,either as a result of design flaws by our research and development team or problemswith production or the testing process by the wafer foundry,we may incur considerable costs and expenses to fix or restart the design process.Suchobstacles may decrease our profitability or delay the launch of new pr

329、oducts.Once tape-out is achieved,the IC design is sent for manufacturing,and the final test yield is a measurement of the production success rate.Thefinal test yield is a function of both product design,which is developed by us,and process technology,which typically belongs to a third-party foundry.

330、Low final test yields can result from a product design deficiency or a process technology failure or a combination of both.As such,we may not be ableto identify problems causing low final test yields until our product designs go to the manufacturing stage,which may substantially increase our per uni

331、tcosts and delay the launch of new products.232022/12/13AMENDMENT NO.2 TO FORM F-1https:/www.sec.gov/Archives/edgar/data/1872302/0008841/d384713df1a.htm30/255Table of ContentsFor example,if any of our foundry service providers experiences manufacturing inefficiencies or encounters disrupt

332、ions,errors or difficultiesduring production,we may fail to achieve acceptable final test yields or experience product delivery delays.We cannot guarantee that our foundryservice providers will be able to develop,obtain or successfully implement process technologies needed to manufacture future gene

333、rations of our ICproducts on a timely basis.Moreover,during the periods in which foundries are implementing new process technologies,their manufacturing facilitiesmay not be fully productive.A substantial delay in the technology transitions to smaller geometry process technologies could have a material andadverse effect on us,particularly if our competitors transition to such technologies before u