GD Culture Enters into Share Exchange Agreement to Acquire Pallas Capital’s Assets, Including 7,500 Bitcoin, for 39,189,344 Shares

Rhea-AI Summary

GD Culture Group (Nasdaq: GDC) has entered into a share exchange agreement to acquire Pallas Capital Holding Ltd. and its assets, including 7,500 Bitcoin. The acquisition will be executed through the issuance of 39,189,344 shares of GDC common stock.

The strategic transaction, which has received majority shareholder approval as required by Nasdaq Listing Rule 5635(d), represents a significant step in GDC's crypto asset treasury strategy. The company aims to establish substantial long-term Bitcoin reserves and strengthen its position in the decentralized finance (DeFi) ecosystem.

Positive

• Acquisition of significant digital assets including 7,500 Bitcoin
• Strategic expansion into cryptocurrency and DeFi markets
• Majority shareholder approval already secured
• Clear alignment with company's digital asset treasury strategy

Negative

• Significant share dilution through issuance of 39,189,344 new shares
• Exposure to volatile cryptocurrency market prices
• Integration risks associated with digital asset acquisition

Insights

Cryptocurrency Strategist

GDC's acquisition of 7,500 Bitcoin through Pallas Capital represents a significant cryptocurrency treasury strategy with substantial shareholder dilution.

GD Culture's share exchange agreement to acquire Pallas Capital and its 7,500 Bitcoin represents a substantial entry into institutional cryptocurrency holdings. At current Bitcoin valuations (approximately $67,000 per BTC), this acquisition represents roughly $502.5 million in digital assets. This positions GDC among the notable public companies holding Bitcoin on their balance sheet.

The structure of this deal warrants careful analysis. GDC is issuing 39,189,344 new shares to complete this acquisition. This represents significant dilution for existing shareholders, effectively exchanging equity for cryptocurrency exposure. The transaction values each newly issued share at approximately $12.82 based on the Bitcoin holdings alone, assuming no additional assets are included in the Pallas Capital acquisition.

From a strategic perspective, GDC is clearly implementing what's known as a "Bitcoin treasury strategy" - converting shareholder equity directly into cryptocurrency reserves rather than using operational cash flow. This approach differs from companies like MicroStrategy, which primarily used debt financing and cash reserves for Bitcoin acquisition.

The company's rationale of positioning Bitcoin as a "store of value and institutional reserve asset" aligns with the narrative adopted by other corporate Bitcoin holders, but the execution through massive equity dilution rather than cash or debt is notable. This transaction transforms GDC's fundamental investment proposition, effectively converting shareholder exposure from the company's core business to significant Bitcoin holdings.

Financial Analyst

The share exchange agreement between GDC and Pallas Capital represents a substantial transaction with significant implications for GDC's capital structure and balance sheet. The issuance of 39,189,344 shares will result in considerable shareholder dilution, though the exact percentage depends on GDC's current outstanding shares.

This transaction effectively converts GDC into a pseudo-Bitcoin investment vehicle, with a substantial portion of its value now directly tied to Bitcoin prices. The 7,500 BTC represents approximately $502.5 million at current market rates, making this a material acquisition that fundamentally alters GDC's risk profile and investment characteristics.

Notably, the press release mentions acquiring Pallas Capital's assets "free and clear of any encumbrances," suggesting these Bitcoin holdings aren't leveraged or subject to loans. However, the release doesn't specify whether Pallas Capital holds other significant assets beyond the 7,500 Bitcoin.

The transaction required majority shareholder approval under Nasdaq Listing Rule 5635(d), which governs issuances representing 20% or more of outstanding shares before the issuance. This confirms the dilutive impact exceeds this threshold. Shareholders should closely evaluate how this transaction transforms GDC's business model and risk exposure, as it represents a strategic pivot that ties company performance directly to cryptocurrency markets rather than operational business activities.

NEW YORK, Sept. 16, 2025 (GLOBE NEWSWIRE) -- GD Culture Group Limited (“GDC” or the “Company”) (Nasdaq: GDC), today announced that on September 10, 2025, it entered into a share exchange agreement (the “Agreement”) to acquire 100% of the issued and outstanding ordinary shares of Pallas Capital Holding Ltd. (“Pallas Capital”), a British Virgin Islands registered company. Upon closing, the Company will issue 39,189,344 shares of common stock and acquire all of Pallas Capital’s assets, including 7,500 Bitcoin (BTC), free and clear of any encumbrances.

In accordance with the Nevada Revised Statutes, as amended, the Company has obtained the majority shareholder approval for the share issuance required under Nasdaq Listing Rule 5635(d). The consummation of the acquisition will be a strategic leap forward in GDC’s execution of its crypto asset treasury strategy through the establishment of substantial long-term Bitcoin reserves. Through this transaction, GDC aims to strengthen its reserve portfolio and establish a stronger presence in the expanding decentralized finance (DeFi) ecosystem.

Mr. Xiaojian Wang, Chairman and Chief Executive Officer of the Company, commented, “The acquisition of Pallas Capital marks a significant advancement in GDC’s digital asset treasury strategy. It directly supports our initiative to build a strong and diversified crypto asset reserve by acquiring scalable, high-value digital assets. By acquiring Pallas Capital and its 7,500 Bitcoin through this transaction, we are positioning GDC to capitalize on Bitcoin's growing role as a store of value and institutional reserve asset. When we integrate these assets, we are building the reserves necessary to execute on our digital asset strategy with both stability and growth potential. Looking ahead, we are confident that this acquisition will deliver meaningful value to our shareholders as we continue to execute our vision of becoming an established player in the digital asset ecosystem.”

About GD Culture Group Limited

GD Culture Group Limited (the “Company”) (Nasdaq: GDC), is a Nevada company currently conducting business mainly through its subsidiaries, AI Catalysis Corp. (“AI Catalysis”) and Shanghai Xianzhui Technology Co., Ltd. The Company plans to enter into the livestreaming market with a focus on e-commerce through its wholly owned U.S. subsidiary, AI Catalysis, a Nevada corporation incorporated in May 2023. The Company’s main businesses include AI-driven digital human technology and live-streaming e-commerce business. For more information, please visit the Company's website at https://www.gdculturegroup.com/.

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results.

For more information, please contact:

GD Culture Group Limited
Investor Relations Department
Email: ir@gdculturegroup.com

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

FAQ

How many Bitcoin will GDC acquire through the Pallas Capital acquisition?

GDC will acquire 7,500 Bitcoin as part of the Pallas Capital acquisition, which will be obtained free and clear of any encumbrances.

How many shares will GDC issue for the Pallas Capital acquisition?

GDC will issue 39,189,344 shares of common stock to acquire 100% of Pallas Capital's issued and outstanding ordinary shares.

When did GDC announce the share exchange agreement with Pallas Capital?

GDC announced the share exchange agreement on September 16, 2025, with the agreement being entered into on September 10, 2025.

What is the strategic purpose of GDC's acquisition of Pallas Capital?

The acquisition is part of GDC's strategy to build substantial long-term Bitcoin reserves and strengthen its presence in the decentralized finance (DeFi) ecosystem.

Has GDC received shareholder approval for the Pallas Capital acquisition?

Yes, GDC has obtained majority shareholder approval for the share issuance as required under Nasdaq Listing Rule 5635(d).