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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Nano Labs Ltd's First Half of 2025 Earnings Conference Call. During today's call, all participants will be in listen-only mode. This conference is being recorded today, Friday, August 15, 2025. Joining us today from Nano Labs Ltd are the company's Chairman and Chief Executive Officer, Mr. Jianping Kong, and the company's Chief Financial Officer, Mr. Bing Chen. On our call today, Mr. Jianping Kong will give you an overview of the company's performance. Mr. Bing Chen will share the details of the company's financial results. After that, we will conduct a question and answer session to take your questions. Before we continue, I would like to remind you that some information discussed on this call will contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in The US Private Securities Litigation Reform Act of 1995. 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. During today's call, Mr. Jianping Kong and Mr. Bing Chen will deliver their remarks in Chinese, and the company's representatives will provide corresponding English translations. With that, I will now turn the call over to Mr. Jianping Kong, the company's Chairman and Chief Executive Officer. Mr. Jianping Kong, please go ahead.

Jianping Kong

Hello. Thank you, operator, and everyone for joining Nano Labs Ltd's first half of 2025 earnings conference call today. On our call today, I will provide an overview of our recent development and our initiatives in the future. The year 2025 marks a major transformation for the company in light of the evolving industry landscape and the onset of a new market cycle. We focus our resources and efforts on expanding our work with strategic reserves as the market continues to embrace cryptocurrency transactions and cryptocurrency reserves. We have taken the decisive first step of concentrating our cryptocurrency reserve in BNB, ushering in a new stage of development. As of the date of this earnings conference call, the company holds over 128,000 BNB. Meanwhile, building on our existing mining machine business, we continue to explore new market opportunities while maintaining stability in our current operations. Reviewing 2025, we have undertaken this decisive and strategic transformation since the beginning of this year. We accelerated our expansion and collaboration in the cryptocurrency field. Meanwhile, we undertook ambitious yet prudent initiatives to set up currency investments and reserves through various approaches, including the continuous expansion of our strategic cryptocurrency reserve using both financing and proprietary funds, as well as a strategic equity investment in CEA, a BNB reserve company, thereby solidifying our BNB strategic reserve layout. At the same time, we expanded into the emerging stablecoin sectors as part of our diversified Web3 strategy. Looking forward, we remain vigilant for emerging opportunities and the vast potential for innovation in the laboratory space and the AI-driven transformative era. Through visionary and insightful strategic planning, along with decisive and consistent execution, we believe these efforts will generate substantial value for our stakeholders and drive long-term prosperity for the company. Thank you for your support and trust. Next, I will turn the call over to our Chief Financial Officer, Mr. Bing Chen, for a closer review of our financial results. Mr. Bing Chen, please go ahead.

Bing Chen

Thank you, Jianping Kong. Good morning, everyone. On behalf of the management team, I will provide a brief financial overview of 2025. In 2025, our net revenue was RMB 8,280,000, approximately USD 1,160,000, compared to RMB 24,740,000 in the same period last year. The decline was primarily due to the decreased sales volume of the Apollo V series product. We recorded a gross loss of RMB 10,710,000, approximately USD 1,500,000 for 2025, compared to a gross profit of RMB 30,000 in the same period of 2024. Cost of revenue for 2025 was RMB 18,990,000, approximately USD 2,650,000, compared to RMB 24,710,000 in the same period of 2024. The decline was mainly due to the decrease in sales volume and write-down of inventory and value-added tax recoverable. Total operating expenses for 2025 decreased by 53.5% to RMB 27.33 million, approximately USD 3,820,000, down from RMB 58,720,000 in the same period of 2024. Selling and marketing expenses dropped by 39.6% to RMB 2,620,000, approximately USD 370,000, compared to RMB 4,330,000 in the same period of 2024. This decrease was mainly due to the decrease in sales commission and salaries. General and administrative expenses decreased by 15.4% to RMB 21,540,000, approximately USD 3,010,000 for 2025, from RMB 25,450,000 for the same period of 2024. The decrease in general and administrative expenses was primarily due to the decrease in professional fees and employee salary expenses. Research and development expenses decreased by 89.1% to RMB 3.2 million, approximately USD 440,000 for 2025, from RMB 28,930,000 for the same period of 2024. The decrease in research and development expenses, including salary expenses, design fees, service fees, material costs, etc., was mainly due to the strategic adjustment in research and development activities in 2025. Loss from operations was RMB 38,030,000, approximately USD 5.31 million for 2025, compared with a loss from operations of RMB 58,690,000 for the same period of 2024. Net loss was RMB 11,780,000, approximately USD 1,650,000 for 2025, compared to a net loss of RMB 59,150,000 in the same period of 2024. Basic and diluted loss per share was RMB 0.43, approximately USD 0.06 for 2025, compared to basic and diluted loss per share of RMB 8.46 in the same period of 2024. As of June 30, 2025, the company had cash and cash equivalents of RMB 3.06 million, approximately USD 50,770,000, compared with RMB 32,430,000 as of December 31, 2024. We remain confident in our business strategies and ability to execute them. We will continue to leverage the strengths of our technology to capture development opportunities, drive long-term growth, and create additional value for our shareholders. Now I would like to turn the call over to the operator for the question and answer session.

Operator

Thank you. If you wish to ask a question, please press 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press 2. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Claire Harrison. Please go ahead.

Claire Harrison

Thank you, management team. My question is why has the company chosen BNB as its core reserve asset? Thank you.

Jianping Kong

BNB, as one of the most representative crypto assets, not only has a highly active ecosystem but also demonstrates outstanding long-term growth potential and resilience, supported by its model and platform value. Therefore, we hold BNB as a key cryptocurrency for our core strategic objective. Thanks.

Operator

Your next question comes from Armstrong Wu.

Armstrong Wu

Hello. My question is, regarding your focus on BNB, what parameters will the company take to strengthen its strategy with reserves? Thank you.

Jianping Kong

We will adopt diversified approaches to advance our BNB strategic reserve plan, including acquiring, controlling, or minority stakes in BNB strategic reserve companies, as well as investing in enterprises with strong ecosystem synergies. These diversified measures will help us build a more stable strategic layout. Thanks.

Operator

Your next question comes from Ella Rosenblatt.

Ella Rosenblatt

Hi. My question is will the company consider reserving other cryptocurrencies, or will it focus solely on BNB?

Jianping Kong

Currently, the company is focused on BNB as its core reserve asset based on a comprehensive assessment of BNB's ecosystem maturity, asset stability, and long-term growth potential. However, we will continue to monitor other crypto assets with strategic value and ecosystem support. In the future, we do not rule out allocating a small portion of diversified assets at the right time and in well-defined scenarios to optimize our portfolio and enhance resilience against market cycles. Overall, though, our company will remain centered on BNB to maintain strategic focus and expansion strategy. Thanks.

Operator

Your next question comes from Irina Ravana.

Irina Ravana

Hi, thank you. Does the company have any financing plans for 2025, and what are the considerations behind such plans?

Jianping Kong

Of course, for that one, we are focused on the company's initiatives and partially concrete strategy financing in 2025. The primary purpose of this financing is to support the continued expansion of our BNB strategic reserve scale. Going forward, we will continue to consider various financing options to further support the growth of our BNB strategy with sales plans, thereby ensuring better execution of our Web3-related business initiatives. Thank you.

Operator

And that concludes the question and answer session. Let me turn the call over to Mr. Bing Chen for closing remarks.

Bing Chen

Thank you very much for joining this conference call. If you have any questions, please contact us through email at ir.nano.cn or reach our IR counsel at investorrelations@t9xiaoatsnir.com. Management will respond to your questions as soon as possible. We appreciate your interest and support in Nano Labs Ltd and look forward to speaking with you again next time. Thank you.

Operator

Again, thank you for attending Nano Labs Ltd's first half of 2025 earnings conference call. This concludes our call for today, and we thank you all for listening in. Goodbye.

Jianping Kong

Goodbye.