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SHENZHEN - Addentax Group Corp. (NASDAQ:ATXG), a small-cap company with a market capitalization of $6.83 million, has entered into a non-binding term sheet with an independent Bitcoin holder to potentially acquire up to 12,000 Bitcoins valued at approximately $1.3 billion, the company announced Wednesday. According to InvestingPro data, the stock currently trades at just 0.31 times its book value, suggesting potential undervaluation.
The proposed transaction, which represents an increase from the previously discussed 8,000 Bitcoin acquisition mentioned in the company’s May 15 announcement, would be settled through the issuance of new shares of Addentax common stock. The company’s financial position shows a strong current ratio of 7.54, indicating ample liquidity to meet short-term obligations, though it reported an EBITDA loss of $150,000 in the last twelve months.
The term sheet establishes a preliminary framework for the contemplated acquisition, which remains subject to negotiation and execution of a definitive agreement, due diligence completion, and necessary approvals. The final number of Bitcoins to be acquired and shares to be issued will be determined through mutual agreement between the parties.
Addentax, which provides integrated services in garment manufacturing, logistics, and property management, indicated its management intends to allocate significant resources to a long-term Bitcoin investment strategy.
The development follows the company’s earlier announcement that it was in discussions with multiple independent Bitcoin holders. Addentax has now executed a non-binding term sheet with one substantial holder who has expressed willingness to sell up to 12,000 BTC in exchange for company shares.
The information in this article is based on a company press release statement, and the proposed transaction remains subject to various conditions and approvals before completion. InvestingPro subscribers can access additional insights, including 8 more key tips about ATXG’s financial health and market performance.
In other recent news, Addentax Group Corp. is in discussions to acquire approximately $800 million worth of Bitcoin and other cryptocurrencies by issuing common stock. This potential acquisition, which includes around 8,000 Bitcoins and other digital currencies, is seen as a strategic move to support the company’s long-term investment in crypto assets. The company’s management believes that the addition of these digital assets could strengthen their balance sheet and align with their broader blockchain strategy. CEO Hong Zhida emphasized that certain established digital assets might serve as stable components of Addentax’s long-term holdings due to their liquidity and growing interest from institutional investors. Meanwhile, Addentax Group has received a notification from the Nasdaq Listing Qualifications Department regarding its non-compliance with the minimum bid price requirement. The company’s stock has been trading below the $1.00 threshold for 30 consecutive business days, violating Nasdaq Listing Rule 5550(a)(2). Addentax has been granted a 180-day period to regain compliance, with the possibility of an additional grace period if necessary. This disclosure is part of Nasdaq’s rules to ensure transparency for investors and stakeholders.
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