JZXN Raises Funds through Convertible Notes to Acquire Bitcoin, Initiating a Strategic Layout of Thousands of Bitcoins

Rhea-AI Summary

JZXN Holdings announced its board's approval to issue convertible notes for purchasing Bitcoin as part of their 'Thousand Coins Plan'. The company plans to initially acquire 23.5 Bitcoins through its U.S. subsidiary, marking its entry into digital assets. This purchase represents the first phase of JZXN's broader strategy to accumulate thousands of Bitcoins. CEO Li Tao acknowledged Bitcoin's market volatility while expressing confidence in blockchain technology's long-term potential. The company views this initiative as a way to diversify its asset portfolio and enhance risk resilience. JZXN positions Bitcoin as both a foundational element of the digital asset ecosystem and a potential global strategic reserve asset, committing to comply with relevant regulations in deploying the raised capital.

Positive

• Initial acquisition of 23.5 Bitcoins demonstrates concrete implementation of strategic digital asset plan
• Asset diversification strategy through Bitcoin investment may enhance portfolio resilience
• Company secured funding through convertible notes, indicating investor interest in the initiative
• Strategic expansion into digital assets opens new potential revenue streams

Negative

• Convertible notes may lead to future shareholder dilution
• Exposure to Bitcoin's high market volatility poses significant investment risk
• No specific timeline or price targets disclosed for the 'Thousand Coins Plan'
• Substantial capital allocation to volatile cryptocurrency assets could impact financial stability

Insights

Digital Asset Strategist

JZXN's Bitcoin acquisition through convertible notes signals corporate diversification into digital assets despite potential dilution risks.

JZXN's decision to raise funds via convertible notes specifically for Bitcoin acquisition represents a significant strategic pivot. The company is initiating its previously announced "Thousand Coins Plan" with an initial purchase of 23.5 Bitcoins, marking its entry into the digital asset space.

This financing method deserves scrutiny. Convertible notes typically convert to equity at a predetermined price, potentially diluting existing shareholders. While the company hasn't disclosed conversion terms, this financing choice suggests JZXN may be leveraging potential Bitcoin appreciation against equity dilution risks.

The scale of this initiative is noteworthy - 23.5 BTC represents only the beginning of what appears to be a substantial commitment toward acquiring 1,000+ Bitcoins. At current market values, such a position would represent a significant percentage of JZXN's balance sheet.

This move positions JZXN alongside other public companies adopting Bitcoin treasury strategies, but with a critical distinction: most companies use existing cash reserves rather than raising new capital through convertible instruments specifically for crypto acquisition. This approach magnifies both potential rewards and risks.

While the company acknowledges market volatility concerns, their progressive acquisition strategy suggests a dollar-cost averaging approach rather than a single large purchase, indicating some risk management consciousness despite the ambitious overall target.

Corporate Finance Analyst

The convertible note issuance introduces significant financial implications for JZXN's capital structure. Without disclosed terms (conversion price, maturity, interest rate), investors face uncertainty regarding potential dilution and financial obligations. This financing method suggests possible limitations in utilizing existing cash reserves or securing traditional debt.

JZXN's decision to dedicate these funds exclusively to Bitcoin acquisition rather than operational growth indicates a fundamental shift in capital allocation strategy. This represents a departure from typical corporate treasury management, where capital is primarily directed toward core business operations or safer reserve assets.

The planned allocation toward a 1,000+ Bitcoin position signals substantial commitment to this strategy. Assuming average Bitcoin prices of approximately $60,000, this would eventually represent a $60 million position - a considerable financial commitment that likely constitutes a material percentage of JZXN's balance sheet.

From a governance perspective, the board's approval of this initiative reflects an unusual risk tolerance. While the progressive implementation suggests some caution, the exclusive cryptocurrency focus lacks the diversification typical of treasury management strategies.

The CEO acknowledges market volatility risks while emphasizing long-term potential, suggesting the company views this as a strategic asset rather than a short-term speculative position. However, the lack of specific risk mitigation measures beyond phased acquisition raises questions about downside protection mechanisms in this strategy.

HANGZHOU, China, June 11, 2025 /PRNewswire/ -- JZXN Holdings, Inc. (NASDAQ: JZXN; the "Company") announced that its board of directors has approved the issuance of convertible notes for fundraising. The funds will be exclusively used for Bitcoin strategic reserves, and upon receipt, 23.5 Bitcoins will be purchased as the initiation of the "Thousand Coins Plan" announced on May 22, 2025. The investors and investment conditions have been finalized, with the acquisition set to be completed shortly. This move signifies JZXN's U.S. subsidiary's entry into digital assets, demonstrating its confidence in Bitcoin's long-term value.

Per the Board resolution, JZXN will execute Bitcoin asset allocation progressively, with this initial acquisition constituting a core component of its thousand-Bitcoin strategy. The company emphasized Bitcoin's role as a flagship blockchain technology, noting its decentralized architecture, transparency, and security provide innovative options for asset diversification. By incorporating Bitcoin, JZXN aims to optimize its asset portfolio, enhance risk resilience, and capitalize on opportunities within the digital economy.

The convertible note offering represents a strategic decision aligned with current market dynamics and corporate objectives. JZXN will strictly comply with relevant laws, regulations, and supervisory requirements to ensure legitimate deployment of raised capital. While acknowledging Bitcoin's substantial investment potential, the company concurrently committed to maintaining prudent investment discipline to safeguard capital.

Li Tao, CEO of JZXN, stated: "We fully recognize the volatility and uncertainty of the Bitcoin market. However, it is precisely based on our in-depth understanding of blockchain technology and long-term confidence in its potential that we have decided to take this step. Through this acquisition, we will further diversify the company's asset structure and enhance its risk resilience and profitability. Simultaneously, we will continue to monitor and explore applications of blockchain technology in other fields, aiming to generate new value for the company."

This initiative underscores JZXN's expansion into digital asset investments. The firm positions Bitcoin not only as a foundational element of the digital asset ecosystem but also as a potential global strategic reserve asset. JZXN reaffirmed its dedication to generating sustainable long-term value for shareholders and investors through continuous strategic investments and technological innovation.

For more information, please contact：
Iris 
iris@jzxn.com 

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SOURCE JIUZI HOLDINGS INC

FAQ

What is JZXN's Bitcoin acquisition plan?

JZXN plans to initially acquire 23.5 Bitcoins as part of their 'Thousand Coins Plan', with the goal of accumulating thousands of Bitcoins over time through their U.S. subsidiary.

How is JZXN funding its Bitcoin purchase?

JZXN is funding the Bitcoin purchase through the issuance of convertible notes, with investors and investment conditions already finalized.

What is the purpose of JZXN's Bitcoin investment strategy?

The strategy aims to diversify JZXN's asset portfolio, enhance risk resilience, and capitalize on opportunities within the digital economy while positioning Bitcoin as a strategic reserve asset.

Who approved JZXN's Bitcoin investment plan?

JZXN's board of directors approved the issuance of convertible notes for Bitcoin investment as part of their strategic reserves plan.

What risks did JZXN acknowledge in their Bitcoin investment?

JZXN acknowledged Bitcoin's market volatility and uncertainty, but expressed confidence in blockchain technology's long-term potential while committing to maintain prudent investment discipline.