Bitcoin mining host Bitari Inc. is seeking to raise approximately $30 million through an initial public offering while offering new public buyers about 10% of the company's post-offering shares. According to the company's preliminary S-1 filing, the proposed deal structures capital contributions and ownership equity in a heavily skewed ratio.
The prospectus outlines plans to sell 4,285,715 shares at an expected price of $7 each, generating $30,000,005 in gross proceeds. This figure represents 99.8% of the total consideration tracked in the filing's table, while the resulting shares will grant new investors 10% of the expected 43,085,715 total outstanding shares following the base offering.
Dilution and Voting Control
Existing stockholders will retain 38.8 million shares, or 90% of the post-offering total, after contributing $45,000, which accounts for 0.2% of the consideration in the table. Bitari calculates that the transaction will raise the net tangible book value per share from $0.06 to $0.69, resulting in an immediate dilution of $6.31 for buyers purchasing shares at the $7 price point.
The ownership arrangement ensures that voting control remains concentrated. AI Power X Inc. will hold 85.87% of the outstanding stock after the base offering. Chair Pei Zhao, as the beneficial owner of those shares, will control an equivalent share of the voting power, rendering Bitari a controlled company.
Use of Proceeds and Financial Standing
Bitari estimates net proceeds of about $26.95 million before any over-allotment options. The company intends to allocate funds across several categories:
- 40% (~$10.78 million) for strategic acquisitions and investments, though the filing notes that no targets, negotiations, or agreements have been established yet.
- 30% for global market expansion and brand development.
- 15% for new mining operations and infrastructure.
- 10% for research and development.
- 5% for general corporate purposes and working capital.
The planned capital raise arrives alongside a slight contraction in Bitari's recent financial metrics. For the nine months ended April 30, the company reported revenue slipping to $8.37 million from $8.59 million during the same period a year earlier. Net income declined from $990,960 to $183,905. Furthermore, operating activities used $689,760 in cash, contrasting with the $1.37 million generated in the prior-year period.
Bitari has reserved the ticker symbol BIAI and submitted an application to the Nasdaq Global Market. However, the listing has not yet been approved, the offering is contingent upon final Nasdaq approval, and the prospectus does not establish a firm trading date.
