Woofun AI reports that Bitari Inc., a Bitcoin mining host pursuing a Nasdaq listing, has structured its IPO to require public buyers to provide 99.8% of the consideration for merely 10% of the post-offering equity. This arrangement effectively designates the entity as a controlled company under Chair Pei Zhao, who, through AI Power X Inc., retains dominant voting power despite the public capital infusion.

The financial mechanics reveal a stark disparity in value exchange. Public investors are asked to fund 99.8% of the deal, yet existing stockholders retain 38.8 million shares, representing 90% of the post-offering total, after contributing only $45,000, or 0.2% of the consideration. Per-share metrics indicate that while net tangible book value rises from $0.06 to $0.69, buyers face immediate dilution of $6.31 on each $7 share.

Structurally, AI Power X Inc. will hold 85.87% of the outstanding stock after the base offering, ensuring that control remains firmly with the insiders.

Woofun AI data shows that the allocation of the $26.95 million in net proceeds introduces significant uncertainty regarding capital deployment. Bitari plans to direct 40%, or $10.78 million, toward strategic acquisitions, yet no targets have been identified, nor have preliminary negotiations or agreements been signed. The remaining funds are distributed as follows: 30% for global market expansion and brand development, 15% for new mining operations and infrastructure, 10% for research and development, and 5% for general corporate purposes and working capital. This discretionary pool is substantial relative to the company's current operational scale.

Operational metrics highlight a contracting business environment amidst this capital raise. For the nine months ended April 30, revenue declined to $8.37 million from $8.59 million in the prior year period. Net income dropped sharply to $183,905 from $990,960, while cash flow from operating activities turned negative, using $689,760 compared to generating $1.37 million previously. These figures underscore the financial pressure on the mining host as it seeks external funding.

The transaction remains contingent on regulatory approval. Bitari has reserved the symbol BIAI and applied to the Nasdaq Global Market, but the filing confirms that Nasdaq had not approved the application. Closing is conditioned on final listing approval, and the prospectus does not set a firm offering date or trading date. This marks another instance where public investors are asked to underwrite high-risk, founder-controlled entities with limited operational transparency.