China-based garment maker unveils updated, though equally vague, plan to purchase 12,000 Bitcoin

Shenzhen, China-based microcap firm Addentax Group Corp. (ticker ATXG) has unveiled a new non-binding agreement to purchase up to 12,000 Bitcoin, a 50% increase from plans to acquire 8,000 $BTC initially floated in May.

The purchases would total approximately $1.3 billion, if completed, and would be funded through sales of the company’s Nasdaq-listed stock, according to an announcement on Wednesday.

Details of Addentax’s plan have been scarce, though it may be legitimate. However, some observers have noted that the firm’s relatively low market cap — under $7 million on Wednesday, according to Google Finance — raises risks of shareholder dilution and volatility. The stock has traded under $1 per share for over a year.

“This term sheet outlines the preliminary framework for the contemplated acquisition and remains subject to the negotiation and execution of a definitive agreement, the satisfactory completion of due diligence, and customary approvals,” the firm wrote in a statement.

Accordingly, many of the plan’s details — including the total target number of Bitcoin to be acquired, the number of shares to be issued, and the issuance pricing terms — remain unknown, the firm says. However, company management retains "a strong intention to allocate significant resources to its long-term Bitcoin investment strategy."

Addentax, originally a clothing manufacturer, is part of a growing trend of firms establishing crypto treasuries — or at least announcing their intention.

While many firms have recently launched multi-billion-dollar funding arrangements to acquire tokens, it sometimes appears that existing companies tease crypto acquisitions in an attempt to capitalize on the buzz. This is not unlike when the company formerly known as Long Island Iced Tea Corp. added “blockchain” to its name during the 2017 bull market, causing its stock to rally in what ended up being a case of insider trading.

Addentax raised eyebrows in May when it first announced it had been in talks with "influential" crypto participants, including holders of the $TRUMP memecoin, about potential crypto purchases valued at “approximately” $800 million. Like in today’s announcement, the company was careful to note at the time that “no definitive agreement has been reached.”