A proposed IPO from Bitari Inc., a Bitcoin mining host, is getting attention because of how much money public investors would put in versus how much of the company they would actually own.
An unusual share structure
According to its preliminary S-1 filing, Bitari plans to sell 4,285,715 shares at an expected price of $7 each. That would bring in roughly $30 million in gross proceeds. The filing lists that payment as about 99.8% of total consideration in the offering. But the new investors would receive around 10% of the shares expected to be outstanding after the base offering.
Existing stockholders, by comparison, would hold about 38.8 million shares, or 90% of the post-offering total. Their contribution is listed at just $45,000, or 0.2% of the consideration. Bitari calculates that the deal would lift net tangible book value from $0.06 to $0.69 per share. Buyers would face immediate accounting dilution of $6.31 on each $7 share.
This isn’t necessarily an indictment of the company. It’s just an unusual structure that puts a low price on the existing shareholders’ stake relative to the cash coming in.
Control stays in place
The ownership gap also preserves control. AI Power X Inc. would own about 85.87% of the outstanding stock after the base offering. Chair Pei Zhao, who is the beneficial owner of those shares, would hold the same share of voting power. That would make Bitari a controlled company under Nasdaq rules.
The company has reserved the symbol BIAI and applied to the Nasdaq Global Market. The filing notes that Nasdaq had not approved the application, and closing depends on final listing approval. No firm offering or trading date is set.
Where the new money would go
Bitari estimates net proceeds of about $26.95 million before any over-allotment. It plans to direct 40%, or about $10.78 million, toward strategic acquisitions and investments. So far, the company has not identified a target, entered preliminary negotiations, or signed an acquisition agreement. Another 30% would go to global market expansion and brand development. The remaining funds would cover new mining operations and infrastructure at 15%, research and development at 10%, and general corporate purposes and working capital at 5%.
Recent operations
The proceeds would be significant compared with Bitari’s recent numbers. For the nine months ended April 30, revenue slipped to $8.37 million from $8.59 million a year earlier. Net income fell to $183,905 from $990,960. Operating activities used $689,760 of cash after generating $1.37 million in the same period a year before.
If the offering goes through as described, buyers would be funding a controlled mining host while facing immediate dilution and a large discretionary acquisition pool. In return, they’d get roughly one-tenth of the post-offering shares. It’s a deal worth watching, though the timing remains unclear.
