Taoping Inc. (NASDAQ:TAOP) shares dropped 8.4% in premarket trading on Friday after the company revealed it had signed a non-binding Letter of Intent (LOI) to acquire Alphalion Holding Limited.
Under the proposed transaction, Taoping would acquire 100% of Alphalion’s equity. The deal remains contingent on due diligence, negotiation of a definitive agreement, and standard closing conditions. Key financial details, including the purchase price and payment structure, have yet to be determined and will be finalized after the due diligence process.
According to the announcement, the LOI will expire automatically if the deal is not completed by October 31, 2026. Taoping described the potential acquisition as “another significant milestone” in the strategic growth of its AI-driven digital ecosystem.
Alphalion is a Hong Kong-based technology group with more than 60 core patents and operations spanning three main areas: embodied robotics, AI servers, and composite new materials. It oversees several subsidiaries in mainland China and Singapore.
“As use cases around AI continue to rapidly expand, our proposed acquisition of Alphalion Holding marks another important strategic step in expanding Taoping’s addressable market, strengthening our solutions portfolio and accelerating growth,” said Jianghuai Lin, Chairman and CEO of Taoping.
The market’s negative response indicates investor caution regarding the deal, particularly due to the absence of financial specifics and the extended timeline for completion, which could stretch beyond two years.
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