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United States securities and exchange commission logo
May 15, 2024
Jianping Kong
Chief Executive Officer
Nano Labs Ltd
China Yuangu Hanggang Technology Building
509 Qianjiang Road, Shangcheng District
Hangzhou, Zhejiang , 310000
People’s Republic of China
Re:Nano Labs Ltd
Annual Report on Form 20-F for the fiscal year ended December 31, 2023
Filed April 8, 2024
File No. 001-41426
Dear Jianping Kong:
            We have limited our review of your filing to the financial statements and related
disclosures and have the following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments.
Annual Report on Form 20-F for the FIscal Year Ended December 31, 2023
Introduction, page ii
1.Please disclose prominently within this section that you are not a Chinese operating
company but a Cayman Islands holding company with operations conducted by your
subsidiaries in China. Disclose whether or not you have any contractual arrangements
with a variable interest entity (VIE) based in China or whether you indirectly have a
consolidating indirect majority ownership interest in the PRC-based subsidiaries. To the
extent you have a VIE structure please expand your disclosures accordingly to describe
the unique risks to investors involved with this structure.  Also disclose that you have not
been or expect to be identified by the Commission under the HFCAA, including the
impact of being identified as a Commission-Identified Issuer. We note certain of these
disclosures have been included within Risk Factors, under the sub-heading Risks Related
to Conducting Business in China beginning on page 37. Please ensure to provide cross-

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references of more detailed disclosure to the respective risk factor.

2.The Sample Letters to China-Based Companies seek specific disclosure relating to the risk
that the PRC government may intervene in or influence your operations at any time, or
may exert control over operations of your business, which could result in a material
change in your operations and/or the value of the securities you are registering for
sale. We remind you that, pursuant to federal securities rules, the term “control”
(including the terms “controlling,” “controlled by,” and “under common control with”) as
defined in Securities Act Rule 405 means “the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a person, whether
through the ownership of voting securities, by contract, or otherwise.” The Sample Letters
also seek specific disclosures relating to uncertainties regarding the enforcement of laws
and that the rules and regulations in China can change quickly with little advance
notice. We do not believe that your disclosure conveys the same risk. For example, and
without limitation, we note your disclosure that “[y]our business, prospects, financial
condition and results of operations may be influenced to a significant degree by political,
economic and social conditions in China,” "The PRC government has significant
oversight and discretion over the conduct of our business and may intervene with or
influence our operations as the government deems appropriate to further regulatory,
political and societal goals," and disclosure contained in your risk factor on page 40 titled
"Uncertainties in the interpretation and enforcement of PRC laws and regulations could
limit the legal protections available to you and us." Please revise your cover page,
summary, and risk factor disclosure relating to legal and operational risks associated with
operating in China and PRC regulations for consistency with the Sample Letters.

Key Information, page 1
3.Notwithstanding the disclosures made in the Risk Factors sub-heading Risks Related to
Conducting Business in China, please address the following prominently within Key
Information separate from the Risk Factors, and provide a cross-reference to the specific
sub-risk factor for more details:

•Disclose that trading in your securities may be prohibited under the Holding Foreign
Companies Accountable Act if the PCAOB determines that it cannot inspect or
investigate completely your auditor, and that as a result an exchange may determine
to delist your securities. Disclose whether your auditor is subject to the
determinations announced by the PCAOB on December 16, 2021.

•At the onset of Item 3, disclose the risks that your corporate structure and being based
in or having the majority of the company’s operations in China poses to investors. In
particular, describe the significant regulatory, liquidity, and enforcement risks with
cross-references to the more detailed discussion of these risks in the prospectus. For

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example, specifically discuss risks arising from the legal system in China, including
risks and uncertainties regarding the enforcement of laws and that rules and
regulations in China can change quickly with little advance notice; and the risk that
the Chinese government may intervene or influence your operations at any time, or
may exert more control over offerings conducted overseas and/or foreign investment
in China-based issuers, which could result in a material change in your operations
and/or the value of the securities you are registering for sale. Acknowledge any risks
that any actions by the Chinese government to exert more oversight and control over
offerings that are conducted overseas and/or foreign investment in China-based
issuers could significantly limit or completely hinder your ability to offer or continue
to offer securities to investors and cause the value of such securities to significantly
decline or be worthless.

•Disclose each permission or approval that you, your subsidiaries, or the VIEs are
required to obtain from Chinese authorities to operate your business and to offer the
securities being registered to foreign investors. State whether you, your subsidiaries,
or VIEs are covered by permissions requirements from the China Securities
Regulatory Commission (CSRC), Cyberspace Administration of China (CAC) or any
other governmental agency that is required to approve the VIE’s operations, and state
affirmatively whether you have received all requisite permissions or approvals and
whether any permissions or approvals have been denied. Please also describe the
consequences to you and your investors if you, your subsidiaries, or the VIEs: (i) do
not receive or maintain such permissions or approvals, (ii) inadvertently conclude
that such permissions or approvals are not required, or (iii) applicable laws,
regulations, or interpretations change and you are required to obtain such permissions
or approvals in the future.

•At the onset of Item 3, provide a clear description of how cash is transferred through
your organization. Disclose your intentions to distribute earnings or settle amounts
owed under the VIE agreements. Quantify any cash flows and transfers of other
assets by type that have occurred between the holding company, its subsidiaries, and
the consolidated VIEs, and direction of transfer. Quantify any dividends or
distributions that a subsidiary or consolidated VIE have made to the holding company
and which entity made such transfer, and their tax consequences. Similarly quantify
dividends or distributions made to U.S. investors, the source, and their tax
consequences. Your disclosure should make clear if no transfers, dividends, or
distributions have been made to date. Describe any restrictions on foreign exchange
and your ability to transfer cash between entities, across borders, and to U.S.
investors. Describe any restrictions and limitations on your ability to distribute
earnings from the company, including your subsidiaries and/or the consolidated
VIEs, to the parent company and U.S. investors as well as the ability to settle
amounts owed under the VIE agreements.

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4.We note your Risk Factor disclosure on page 52 that substantially all of your current
officers and directors are nationals and residents of countries other than the United States.
Please provide a separate Enforceability section, to disclose the difficulty of bringing
actions and enforcing judgments against these individuals. Reference is made to our
disclosure previously provided in the Form F-1 Registration Statement, file number 333-
266825, declared effective by the Staff  on September 27, 2022.

Controls and Procedures
DIsclosure Controls and Procedures, page 134
5.Refer to the first paragraph. Please disclose whether based on that evaluation, your chief
executive officer and chief financial officer concluded that, as of December 31, 2023,
your disclosure controls and procedures ("DCP") were also determined to be not effective
due to the material weakness identified in your internal control over financial reporting
("ICFR"). We note your current disclosure implies that DCP were not impacted,
notwithstanding the ineffectiveness of your ICFR, and that you do not provide a
conclusion regarding the effectiveness of DCP. Reference is made to Item 307 of
Regulation S-K. To the extent that ICFR has been determined to be ineffective due to the
material weakness identified, we would expect your DCP also to be ineffective due to the
overlap of controls. Further, in the second paragraph, please clarify if you had more than
one material weakness, as we note disclosure in Risk Factors on page 27, MD&A-ICFR
on page 95, and in your Management's Report on Internal Control over Financial
Reporting on page 134, that only one material weakness had been identified, whereas your
current disclosure refers to material weaknesses. Please revise.

Management's Annual Report on Internal Control over Financial Reporting, page 134
6.Please address the following:

•In the paragraphs where you refer to management, please expand to disclose if your
management includes the participation of your chief executive officer and chief
financial officer.

•Under the heading of Internal Control over Financial Reporting on page 135, please
expand to include within this section your implementation and remediation plans to
address the material weakness identified. We note such discussion instead is provided
under the heading, Change in Internal Control over Financial Reporting, with an
expanded discussion in MD&A-ICFR on page 96, which expanded discussion should
also be included herein.

•Under the heading of Change in Internal Control over Financial Reporting, please

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revise to disclose if there were any change in your internal control over financial
reporting ("ICFR") identified in connection with your evaluation of ICFR, other than
those discussed above relating to the material weakness, that occurred during your
fourth fiscal quarter (i.e., quarter ended December 31, 2023) that has materially
affected, or is reasonably likely to materially affect, your internal control over
financial reporting. See Item 308(c) of Regulation S-K.

•Please revise your Exhibit 12.1 and 12.2 Certifications to include the disclosure
language required by paragraph 4(b) pursuant to the Instructions to Item 19 of Form
20-F as pertaining to Exhibit 12, paragraph 4(b). In this regard, we note your
currently filed Exhibit 12.1 and 12.2 Certifications discloses at paragraph
4(b), [Reserved]. Given that this is your second annual report on Form 20-F after
your initial public offering, you are required to comply with disclosure requirements
of Item 308(a) of Regulation S-K, whereby the Exhibit 12.1 and 12.2 Certifications
should include the disclosures for paragraph 4(b).

•Please file an amendment to your December 31, 2023 annual report on Form 20-F, in
its entirety, to reflect the revisions as noted to your disclosure controls and
procedures and internal control over financial reporting. Your amended filing should
also include updated Exhibit 12 and Exhibit 13 Certifications accordingly. We refer
you to the following Staff Compliance & Disclosure Interpretations ("C&DIs"): (i)
Exchange Act Rules, C&DI No. 161.01, and (ii) Regulation S-K, C&DI No. 246.12.

            In closing, we remind you that the company and its management are responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or
absence of action by the staff.
            Please contact Beverly Singleton at 202-551-3328 or Kevin Woody at 202-551-3629 with
any questions.
Sincerely,
Division of Corporation Finance
Office of Manufacturing