South Korean company Bitmax has cut its capital sharply after losses tied to its Bitcoin treasury strategy, highlighting the risks facing small firms attempting to replicate the approach pioneered by Strategy.
The KOSDAQ-listed company announced a 4-to-1 share consolidation on March 9 that reduced paid-in capital from about $14.5 million to $3.6 million after accumulated losses tied to leveraged crypto purchases.
The company holds 551 Bitcoin acquired largely through over-the-counter deals with its chairman and funded through convertible bonds, with CEO Hong Sang-hyuk previously describing the losses as non-cash accounting effects.
Bitmax’s shares fell more than 10% following the consolidation announcement and have dropped roughly 88% from their 52-week high of about $5.12, far exceeding Bitcoin’s roughly 12% annual decline.
Financial filings show the company’s total debt surged from about $4.4 million to $74 million in nine months as it issued convertible bonds to fund Bitcoin purchases while reporting a $52 million net loss for the first three quarters of 2025.
The company originally operated in augmented reality before pivoting to a Bitcoin treasury model in 2025 and later absorbed enterprise IT subsidiary IL4U in an attempt to stabilise revenue.
Bitmax is one of several KOSDAQ-listed firms adopting similar crypto treasury strategies, though analysts say the model works far better for large players such as Strategy, which holds about 640,000 Bitcoin and has far greater access to capital markets.
At the time of reporting, Bitcoin price was $70,111.76.