Business Context and Reporting Period
Nano Labs Ltd (Nasdaq: NA) is a Cayman Islands holding company with operations primarily conducted through subsidiaries in China and Hong Kong. The company operates as a leading Web 3.0 infrastructure provider, specializing in the design of High Throughput Computing (HTC) and High Performance Computing (HPC) chips for cryptocurrency mining, as well as a crypto treasury strategy centered on holding BNB. This Form 20-F covers the fiscal year ended December 31, 2025.
Key Financial Metrics (Fiscal Year 2025)
| Metric | 2025 (RMB) | 2025 (US$) | 2024 (RMB) | 2023 (RMB) |
|---|---|---|---|---|
| Net Revenue | 27,006,744 | 3,842,298 | 40,595,916 | 78,335,376 |
| Gross Profit (Loss) | (39,790,297) | (5,661,037) | 11,602,315 | (103,449,200) |
| Net Income (Loss) | 125,947,598 | 17,918,792 | (119,539,049) | (254,352,054) |
| Operating Cash Flow | (108,268,892) | (15,403,609) | (139,329,150) | (133,473,937) |
| Cash & Equivalents (Year End) | 8,502,357 | 1,209,646 | 32,431,081 | 32,431,081 |
| Total Debt (Short & Long Term) | 220,792,834 | 31,412,340 | 193,033,636 | N/A |
Note: US$ amounts are translated at the rate of RMB 7.0288 to US$1.00 as of December 31, 2025.
Material Changes vs. Prior Period
- Revenue Decline: Net revenue decreased by approximately 33.5% from RMB 40.6 million in 2024 to RMB 27.0 million in 2025. This was primarily due to decreased sales of the F Series mining machines and reduced technical service provision.
- Profitability Shift: The company swung from a net loss of RMB 119.5 million in 2024 to a net income of RMB 125.9 million in 2025. This turnaround was driven almost entirely by a non-operating gain of RMB 178.6 million from the change in fair value of cryptocurrencies (primarily BNB), offsetting a gross operating loss of RMB 39.8 million.
- Inventory Write-downs: Cost of revenues increased significantly due to inventory write-downs of RMB 32.6 million (US$ 4.6 million) in 2025, representing 48.9% of total cost of revenues, compared to RMB 10.9 million in 2024. This reflects downward adjustments due to cryptocurrency price volatility.
- Expense Reduction: Research and development expenses dropped sharply from RMB 50.1 million in 2024 to RMB 8.1 million in 2025 as the company streamlined R&D activities.
Guidance, Outlook, and Risks
Management Commentary & Strategy: Nano Labs continues to pivot toward a "crypto treasury" model, holding BNB as a primary reserve asset. As of December 31, 2025, the company held 126,662 BNB tokens valued at approximately RMB 768.6 million. The company also launched the "iPollo Claw" product line in early 2026 to support AI agent systems, signaling a diversification beyond traditional mining hardware.
Key Risks & Contingencies:
- Internal Control Material Weakness: The company identified a material weakness in internal controls over financial reporting due to a lack of sufficient accounting personnel with adequate U.S. GAAP knowledge. Remediation plans include hiring qualified personnel and enhancing internal audit functions.
- Cryptocurrency Volatility: Financial results are heavily dependent on the fair value of BNB holdings. A sharp decline in BNB prices could reverse the 2025 profitability and lead to significant unrealized losses.
- Regulatory Risks (China & US): Operations face significant risks from PRC regulations regarding cryptocurrency mining (classified as a phased-out industry) and data security. Additionally, the company faces potential delisting risks under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB cannot inspect its auditor in China for two consecutive years.
- Liquidity: Despite net income, the company reported negative operating cash flows of RMB 108.3 million in 2025. Liquidity is supported by a credit line of RMB 198 million (with RMB 177.8 million drawn) and proceeds from private placements.
Investor Verification Checklist
- Revenue Quality: Verify the sustainability of revenue streams given the 33% year-over-year decline and the heavy reliance on cryptocurrency mining hardware sales.
- Profit Source: Confirm that the 2025 net income is driven by non-cash fair value adjustments of BNB rather than core operational profitability, which remains negative (Gross Loss of RMB 39.8 million).
- Internal Controls: Monitor the progress of remediation for the identified material weakness in financial reporting to ensure future compliance with SEC regulations.
- Regulatory Status: Assess the ongoing risk of PCAOB inspection limitations and potential HFCAA delisting, as well as the impact of PRC crackdowns on cryptocurrency mining on the company's core product demand.
- Liquidity Position: Review the company's ability to service its debt (approx. RMB 220 million) given the negative operating cash flow and reliance on equity financing and crypto asset liquidation.