Bitari Mining Host Seeks Public Funds with Controversial IPO Terms

Bitari Inc., a Bitcoin mining host seeking to go public through an IPO and Nasdaq listing, is asking public buyers to provide nearly all of the consideration in its prospectus table while giving them just 10% equity. The company's preliminary S-1 proposes selling 4,285,715 shares at $7 each, generating $30,000,005 in gross proceeds. This represents 99.8% of total consideration, according to the table.

Existing stockholders would retain 38.8 million shares, or 90% of the post-offering total, after contributing just $45,000, or 0.2% of the consideration. On a per-share basis, Bitari estimates that the deal would raise net tangible book value from $0.06 to $0.69 while leaving buyers with immediate dilution of $6.31 on each $7 share.

The ownership gap also preserves control, as AI Power X Inc. would hold 85.87% of outstanding stock after the base offering. This means Chair Pei Zhao, the beneficial owner of those shares, would be able to exercise the same share of voting power, leaving Bitari a controlled company.

Bitari plans to direct $26.95 million of net proceeds from the IPO towards strategic acquisitions and investments, with 40% earmarked for this purpose. The company has yet to identify a target or enter preliminary negotiations.