In a recent move, Cetus Capital Acquisition Corp. (NASDAQ:CETU), a Delaware-incorporated blank check company, has entered into an agreement that could inject approximately $4.8 million into its business operations.
On July 24, 2024, MKDWELL (Jiaxing) Electronic Technology Ltd., a Chinese entity, and MKDWELL Tech Inc., a British Virgin Islands corporation, signed a Securities Purchase Agreement with an undisclosed investor. This agreement stipulates the sale of a convertible promissory note with a principal amount of roughly 35 million Chinese Yuan.
The transaction is scheduled to close on the business day just before the completion of a Business Combination, a term defined in a previous agreement dated June 20, 2023. This prior agreement outlines a merger plan involving Cetus Capital, MKD Technology Inc. of Taiwan, MKDWELL Limited of the British Virgin Islands, and other parties. Post-merger, Cetus Capital and MKDWELL Limited will become wholly-owned subsidiaries of MKDWELL Tech Inc.
The convertible note will accrue interest at an annual rate of 10% and is set to mature two years from the issuance date. The note also offers the investor an option to convert the debt into ordinary shares of MKDWELL Tech Inc. at a price per share that is the lower of $5.00 or the 15-day trading volume weighted average price, with a floor of $2.00 per share.
Additionally, as part of the agreement, the investor is to receive an extra 150,000 ordinary shares of MKDWELL Tech Inc. upon obtaining necessary Chinese regulatory approvals related to foreign currency exchange.
The information for this article is based on a press release statement.
InvestingPro Insights
As Cetus Capital Acquisition Corp. (NASDAQ:CETU) maneuvers through its strategic business combinations and financial agreements, investors considering this stock should be aware of several key metrics and insights from InvestingPro. The company currently has a market capitalization of $30.3 million USD, but it's trading at a high earnings multiple with a P/E ratio of 205.09. This could indicate that the stock is priced optimistically relative to its earnings. Additionally, CETUU has experienced significant price volatility in recent months, with a 1-month and 3-month price total return of -35.19%, and a 6-month and YTD return of -35.97%.
InvestingPro Tips also reveal that Cetus Capital’s stock has fared poorly over the last month and three months, which aligns with the observed price declines. Moreover, the company's short-term obligations exceed its liquid assets, which could pose liquidity risks. On a positive note, the company has been profitable over the last twelve months. For investors looking for income-generating investments, it's important to note that CETUU does not pay a dividend to shareholders. With these insights, investors can better gauge the risks and potential of CETUU in the context of its current financial strategies and market performance.
For more detailed analysis and additional InvestingPro Tips, interested investors can visit https://www.investing.com/pro/CETUU. There are currently six more tips available, which can be accessed with a subscription. To enhance your investing strategy, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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