Nano Labs Announces Second Half of 2024 Financial Results

Nano Labs Ltd (Nasdaq: NA) (“we,” the “Company” or “Nano Labs”), a leading fabless integrated circuit design company and product solution provider in China, today announced its unaudited financial results as of December 31, 2024 and for the six months ended December 31, 2024.

Second Half of 2024 Financial Highlights

— Net revenue was RMB15.9 million (US$2.2 million) for the second half of 2024, compared to RMB26.1 million in the same period of 2023.

— Gross profit was RMB11.6 million (US$1.6 million) for the second half of 2024, compared to a gross loss of RMB40.6 million in the same period of 2023.

— Loss from operations was RMB39.8 million (US$5.5 million) for the second half of 2024, compared to a loss from operations of RMB124.4 million in the same period of 2023.

— Net loss was RMB60.4 million (US$8.4 million) for the second half of 2024, compared to a net loss of RMB120.0 million in the same period of 2023.

— Net loss per share (both basic and diluted) was RMB6.01 (US$0.84) for the second half of 2024, compared to a net loss per share (both basic and diluted) of RMB19.12 in the same period of 2023.

Mr. Jianping Kong, Chairman and Chief Executive Officer of the Company, commented, “The year 2024 brings many opportunities as the Company expanded its business. We have formally established Bitcoin value investment as a new business sector and adopting Bitcoin as our primary reserve asset. As of the date of this press release, the Company holds about 400 BTC with a total purchase price of around $40 million.

Furthermore, in December 2024, we released upgraded complete machine equipped with the Cuckoo 3.0 iteration chip, which shows enhanced performance that achieves world-leading standard. This important improvement provides us with a key advantage to grow our market share. With the accelerated evolution of AI, we plan to create AI applications within the Web3.0 ecosystem and focus on integrating AI with Web3.0 technologies.

Through our visionary strategic planning and persistent execution, we remain committed to deepening our expertise in the Web3.0 domain. We believe we are able to create great value and deliver strong results for our supporters.”

Mr. Bing Chen, Chief Financial Officer of the Company, commented, “for the second half of 2024, our net revenue was RMB15.9 million (US$2.2 million). In addition, the net loss was RMB60.4 million (US$8.4 million) for the six months ended December 31, 2024, compared to a net loss of RMB120.0 million in the same period of 2023. We are confident that we are able to to deliver exceptional value creation and present a satisfactory performance report to our stakeholders.”

Second Half of 2024 Financial Results

Net Revenues

Net revenue was RMB15.9 million (US$2.2 million) for the second half of 2024, compared to RMB26.1 million for the same period of 2023. The decrease in net revenues was primarily due to the decrease in sales volume of iPollo V Series.

Cost of Revenues

Cost of revenues was RMB4.3 million (US$0.6 million) for the second half of 2024, compared to RMB66.6 million for the same period of 2023. The change was mainly due to the decrease in sales volume and less inventory write-down recorded.

Operating Expenses

Total operating expenses decreased by 38.7% to RMB51.4 million (US$7.1 million) for the second half of 2024 from RMB83.8 million for the same period of 2023.

— Selling and marketing expenses decreased by 17.7% to RMB4.8 million (US$0.7 million) for the second half of 2024, from RMB5.8 million for the same period of 2023. The decrease in selling and marketing expenses was primarily due to the decrease in employee salary expenses.

— General and administrative expenses increased by 13.5% to RMB25.4 million (US$3.5 million) for the second half of 2024, from RMB22.4 million for the same period of 2023. The increase in general and administrative expenses was primarily due to the increase in depreciation expenses.

— Research and development expenses decreased by 61.9% to RMB21.2 million (US$3.0 million) for the second half of 2024, from RMB55.6 million for the same period of 2023. The decrease in research and development expenses was primarily due to the decrease in salary expenses, material fees, and equipment fees.

Loss from Operations

Loss from operations was RMB39.8 million (US$5.5 million) for the second half of 2024, compared with loss from operations of RMB124.4 million for the same period of 2023.

Finance Expenses

Finance expenses was RMB2.0 million (US$0.3 million) for the second half of 2024, compared with finance income of RMB0.7 million for the same period of 2023.

Interest Expenses

Interest expenses was RMB4.9 million (US$0.7 million) for the second half of 2024, compared with nil for the same period of 2023. The change was due to the completion of construction in progress and cease of interest capitalization during the first half of 2024.

Change in fair value of cryptocurrencies

Change in fair value of cryptocurrencies was RMB 15.7 million (US$2.2 million) loss for the second half of 2024, compared with nil for the same period of 2023.

Net Loss

Net loss was RMB60.4 million (US$8.4 million) for the second half of 2024, compared with RMB120.0 million in the same period of 2023.

Basic and Diluted Loss Per Ordinary Share attributable to Nano Labs Ltd

Basic and diluted loss per share was RMB6.01 (US$0.84) for the second half of 2024, compared with basic and diluted loss per share of RMB19.12 for the same period of 2023.

Cash and Cash Equivalents

As of December 31, 2024, the Company had cash and cash equivalents of RMB32.4 million (US$4.5 million), compared with RMB48.2 million as of December 31, 2023.

Exchange Rate

This press release contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) solely for the convenience of the reader. Unless otherwise specified, all translations of Renminbi amounts into U.S. dollar amounts in this press release are made at RMB7.1884 to US$1.00, the central parity rate on December 31, 2024 published by the People's Bank of China.

Non-GAAP Financial Measures

In evaluating our business, we consider and use adjusted net income/(loss) as an additional non-GAAP measure to review and assess our operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define adjusted net income/(loss) as net income/(loss) excluding share-based compensation expense.

We present the non-GAAP financial measure because they are used by our management to evaluate our operating performance and formulate business plans. Non-GAAP financial measures enable our management to assess our operating results without considering the impact of non-cash charges and non-operating items. We also believe that the use of the non-GAAP measure facilitates investors' assessment of our operating performance.

The non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as analytical tools. One of the key limitations of using the non-GAAP financial measure is that they do not reflect all items of income and expense that affect our operations. Share-based compensation expenses have been and may continue to be incurred in our business and are not reflected in the presentation of adjusted net income/(loss). Further, the non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

Conference Call

The Company will host an earnings conference call to discuss its financial results at 8:30 am U.S. Eastern Time (8:30 pm Beijing Time) on March 25, 2025.

For participants who wish to join the call, please access the link provided below to complete the online registration process.

Registration Link: https://s1.c-conf.com/diamondpass/10046219-hj76t5.html

Upon registration, participants will receive the dial-in number and unique PIN, which can be used to join the conference call. If participants register and forget their PIN or lose their registration confirmation email, they may simply re-register and receive a new PIN. All participants are encouraged to dial in 15 minutes prior to the start time.

A live and archived webcast of the conference call will be accessible on the Company's investor relations website at: https://ir.nano.cn/.

A telephone replay of the call will be available until 1 April 2025 via the following dial-in details:

Dial-in Numbers:

US/Canada: 1855 883 1031Hong Kong: 800 930 639China: 400 1209 216Replay PIN: 10046219

AboutNano Labs Ltd

Nano Labs Ltd is a leading fabless integrated circuit (“IC”) design company and product solution provider in China. Nano Labs is committed to the development of high throughput computing (“HTC”) chips, high performance computing (“HPC”) chips, distributed computing and storage solutions, smart network interface cards (“NICs”) vision computing chips and distributed rendering. Nano Labs has built a comprehensive flow processing unit (“FPU”) architecture which offers solution that integrates the features of both HTC and HPC. Nano Lab's Cuckoo series are one of the first near-memory HTC chips available in the market*. For more information, please visit the Company's website at: ir.nano.cn.

*According to an industry report prepared by Frost & Sullivan.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company's plan to appeal the Staff's determination, which can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

For investor and media inquiries, please contact:

Nano Labs Ltd Email: ir@nano.cn

Ascent Investor Relations LLC Tina Xiao Phone: +1-646-932-7242 Email: investors@ascent-ir.com

Consolidated Balance Sheets(Unaudited) As of As of December 31, December 31, 2023 2024 RMB RMB US$ASSETSCurrent assets:Cash and cash equivalents 48,164,664 32,431,081 4,511,585Restricted cash 417,990 418,722 58,250Accounts receivable, net 1,739,065 572,803 79,683Inventories, net 12,874,986 29,866,418 4,154,807Prepayments 24,386,010 4,606,066 640,764Other current assets 37,908,092 55,858,433 7,770,635Cryptocurrencies – 242,889,085 33,789,033Total current assets 125,490,807 366,642,608 51,004,757Non-current assets:Property, plant and equipment, net 169,653,582 197,341,915 27,452,829Intangible asset, net 47,731,288 46,745,444 6,502,900Operating lease right-of-use assets 7,424,554 5,203,525 723,878Total non-current assets 224,809,424 249,290,884 34,679,607TOTAL ASSETS 350,300,231 615,933,492 85,684,364LIABILITIES AND SHAREHOLDERS'EQUITY (DEFICIT)Current liabilities:Short-term debts 20,000,000 18,000,000 2,504,034Current portion of long-term debts 3,410,000 5,350,000 744,255Accounts payable 16,875,586 18,101,451 2,518,147Advance from customers 107,826,617 98,895,905 13,757,708Operating lease liabilities, current 3,479,752 1,914,109 266,277Other current liabilities 90,978,171 67,163,217 9,343,278Total current liabilities 242,570,126 209,424,682 29,133,699Non-current liabilities:Long-term debts 120,260,783 170,683,636 23,744,315Operating lease liabilities, non-current 3,730,672 2,917,350 405,841Total non-current liabilities 123,991,455 173,600,986 24,150,156Total liabilities 366,561,581 383,025,668 53,283,855Shareholders' equity (deficit):Class A ordinary shares ($0.002 par 50,106 176,842 24,601value; 12,141,093 and 14,141,093 sharesauthorized as of December 31, 2023 and2024, respectively; 4,192,730 and13,273,596 shares issued as of December31, 2023 and 2024, respectively;3,724,236 and 12,815,143 sharesoutstanding as of December 31, 2023 and2024, respectively)*Class B ordinary shares ($0.002 par 36,894 36,894 5,132value; 2,858,909 shares authorized;2,858,909 shares issued and outstandingas of December 31, 2023 and 2024)*Additional paid-in capital 428,310,028 780,499,664 108,577,662Accumulated deficit (452,031,693) (565,218,741) (78,629,283)Statutory reserves 6,647,109 6,647,109 924,699Accumulated other comprehensive income 2,254,558 8,647,353 1,202,959Total Nano Labs Ltd shareholders' equity (14,732,998) 230,789,121 32,105,770(deficit)Noncontrolling interests (1,528,352) 2,118,703 294,739Total shareholders' equity (deficit) (16,261,350) 232,907,824 32,400,509TOTAL LIABILITIES AND 350,300,231 615,933,492 85,684,364SHAREHOLDERS' EQUITY (DEFICIT)*After giving effect of the 2-for-1 and 10-for-1 reverse stock split effective on January 31, 2024 and November 3,2024, respectively Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) For the six months ended December 31, 2023 2024 RMB RMB US$ Net revenues 26,066,660 15,856,436 2,205,837 Cost of revenues 66,617,485 4,284,184 595,986 Gross profit (loss) (40,550,825) 11,572,252 1,609,851 Operating expenses: Selling and marketing expenses 5,830,986 4,801,639 667,970 General and administrative expenses 22,360,766 25,379,491 3,530,618 Research and development expenses 55,648,133 21,210,897 2,950,712 Total operating expenses 83,839,885 51,392,027 7,149,300 Lossfrom operations (124,390,710) (39,819,775) (5,539,449) Other expenses (income): Finance expenses (income) (680,536) 1,994,310 277,434 Interest expenses – 4,903,728 682,172 Interest income (153,112) (407,669) (56,712) Change in fair value of cryptocurrencies – 15,744,170 2,190,219Other income (3,507,095) (1,660,935) (231,058) Total other expenses (income) (4,340,743) 20,573,604 2,862,055 Lossbefore income tax provision (120,049,967) (60,393,379) (8,401,504) Income tax provision (17,394) – – Net loss (120,032,573) (60,393,379) (8,401,504) Less: net loss attributable to noncontrolling interests (1,528,282) (4,440,071) (617,672) Net loss attributable to Nano Labs Ltd (118,504,291) (55,953,308) (7,783,832) Comprehensive income (loss): Net loss (120,032,573) (60,393,379) (8,401,504) Other comprehensive income (loss): Foreign currency translation adjustment (1,616,096) 1,591,571 221,408 Comprehensive Loss (121,648,669) (58,801,808) (8,180,096) Comprehensive loss attributable to noncontrolling interests (1,528,352) (4,440,489) (617,730) Comprehensive loss attributable to Nano Labs Ltd (120,120,317) (54,361,319) (7,562,366) Net loss per ordinary share attributable to Nano Labs Ltd Basic* (19.12) (6.01) (0.84) Diluted* (19.12) (6.01) (0.84) Weighted average number of shares used in per share calculation: Basic* 6,197,066 9,316,203 9,316,203 Diluted* 6,197,066 9,316,203 9,316,203 *After giving effect of the 2-for-1 and 10-for-1 reverse stock split effective on January 31, 2024 and November 3, 2024, respectivelyNon-GAAP Reconciliation(Unaudited) For the Six Months Ended December 31, 2023 2024 RMB RMB US$Net loss (120,032,573) (60,393,379) (8,401,504)Add:Share-based compensation expenses 580,813 116,013 16,139Non-GAAP adjusted net loss (119,451,760) (60,277,366) (8,385,365)

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