MicroAlgo to issue shares at $0.8 for debt repayment

SHENZHEN - MicroAlgo Inc. (NASDAQ: MLGO), a company specializing in central processing algorithms, has announced its intention to issue new shares priced at $0.8 each. This move is in response to a conversion request from creditors under a $20 million convertible bond purchase agreement dated October 7, 2024. The announcement comes as the stock has experienced significant volatility, with InvestingPro data showing a 37% decline in the past week and a current market capitalization of $25 million.

The company’s decision to issue additional shares comes as a measure to fulfill its obligations for debt repayment as per the terms of the bond agreement. According to the agreement, the bonds are convertible into common shares at a price equal to 70% of the lowest closing market price during the 60 trading days preceding the conversion request. InvestingPro analysis indicates the company maintains a healthy current ratio of 3.55, with liquid assets exceeding short-term obligations.

The convertible bonds, with a maturity period of 360 days, represent a financial strategy by MicroAlgo to manage its debt. The issuance of shares at a fixed price of $0.8 is part of the risk disclosure submitted to the U.S. Securities and Exchange Commission in a Form 6-K filing on October 9, 2024.

MicroAlgo, incorporated in the Cayman Islands, is known for its development and application of bespoke central processing algorithms. The company provides solutions that integrate these algorithms with software or hardware, or both, to help clients increase their customer base, enhance end-user satisfaction, achieve direct cost savings, reduce power consumption, and meet technical objectives. Despite recent market challenges, the company has achieved revenue growth of 20% in the last twelve months, though InvestingPro analysis suggests the stock is currently trading below its Fair Value. Subscribers can access 11 additional ProTips and comprehensive financial metrics for deeper insights.

The information released by MicroAlgo is based on a press release statement and contains forward-looking statements that are subject to various conditions. The company does not undertake to update these statements following the release date, except as required by law.

In other recent news, MicroAlgo Inc. is set to issue new shares at $0.8 each to repay a $20 million debt, following a convertible bond agreement. This move was disclosed in a Form 6-K submission to the U.S. Securities and Exchange Commission. Additionally, MicroAlgo has made significant advancements in its research and development efforts, particularly enhancing the Grover quantum search algorithm. The company has optimized the quantum circuit design, reducing qubit error rates and improving stability, which could benefit sectors managing extensive databases.

MicroAlgo has also developed a quantum neural network-based intelligent search system that integrates advanced quantum machine learning with Grover’s algorithm, aiming to improve data retrieval efficiency. In another development, the company unveiled a new quantum algorithm technology to enhance quantum gate computers, focusing on the FULL adder operation using CPU registers. This technology leverages quantum gates and qubits to simulate FULL adder operations, potentially leading to faster computation speeds.

These advancements reflect MicroAlgo’s ongoing commitment to innovation in quantum computing. However, the company acknowledges challenges remain in hardware design and the need for more algorithms to support broader adoption. The information reported here is based on press release statements from MicroAlgo Inc.

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