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Rectitude Holdings Ltd. (RECT) announced it entered into a $32.6 million Standby Equity Purchase Agreement with Constantinople Limited to fund a bitcoin treasury strategy. The Singapore-based safety equipment provider said it plans to use most proceeds from potential share sales to purchase bitcoin.
Under the agreement, Rectitude can issue ordinary shares to the investors at a 2.5% discount to the lowest daily volume-weighted average price during three consecutive trading days following advance notice. The company maintains sole discretion over timing and amount of shares sold, with no mandatory minimum drawdowns or penalties for not utilizing the full commitment amount.
Constantinople Limited is led by Tian Jia and Chen Zhiqiang, former co-founder and chief technology officer of Tron. The agreement requires effectiveness of a Form F-1 registration statement with the Securities and Exchange Commission.
"Holding Bitcoin on our balance sheet represents a strategic move to safeguard shareholder value while positioning us for a digital future," said Jian Zhang, chairman and chief executive officer of Rectitude.
The company stated it views bitcoin as a store of value and hedge against inflation. Rectitude has not established a specific target for bitcoin holdings and said it may sell bitcoin for corporate purposes or additional capital-raising activities. The company does not currently plan to acquire other cryptocurrencies besides bitcoin.
Founded in 1997, Rectitude provides safety equipment including protective clothing, gloves, safety footwear and fire extinguishers to markets in Singapore and Southeast Asia. The company also recently launched its AIMS clean energy system.