Nukkleus Inc. (NASDAQ:NUKK), a management consulting services company, has announced a reverse stock split and an increase in the number of authorized shares according to a recent filing with the SEC. The company’s board of directors, with shareholder approval, decided to conduct a one-for-eight reverse stock split, effective at 12:01 a.m. Eastern Time on October 24, 2024. This action is intended to objective to increase the per share offering price of the company’s common stock to meet Nasdaq’s minimum offering price requirement.
Every eight shares of Nukkleus Inc. common stock will be consolidated into one share, and shareholders who would receive fractional shares will receive one whole share instead. The reverse stock split will also proportionately adjust the exercise prices of outstanding stock options and warrants and the number of shares under the company’s stock incentive plans. The company’s common stock will trade on a split-adjusted basis under the symbol “NUKK” with a new CUSIP number of 67054R203.
In addition to the reverse stock split, the company has increased its authorized common shares from 40,000,000 to 150,000,000. This amendment to the company’s certificate of incorporation was filed with the State of Delaware on October 18, 2024 and is effective upon filing.
The changes were approved at the company’s annual meeting held on October 11, 2024, where shareholders voted on several key issues, including the election of directors and the ratification of the company’s independent registered public accounting firm, GreenGrowth. CPA, for the fiscal year ending in September. 30, 2024.
In other recent news, Nukkleus Inc. has completed the termination of its senior servicing agreements with Triton Capital Markets Ltd. and FXDirectDealer LLC, as confirmed by a release agreement executed on September 30, 2024. The company has also issued senior notes unsecured loans totaling $437,500 to the Group X Fund of Funds, with an annual interest rate of 12%. At the same time, Nukkleus has undergone leadership changes, with Menachem Shalom taking over as the new CEO, replacing Jamal Khurshid, and the addition of David Rokach to the board of directors.
However, the company is dealing with compliance issues and faces possible delisting from the Nasdaq due to its failure to file a quarterly report on time and its failure to meet minimum offering price and market value requirements. Nukkleus has until November 2024 to rectify these issues and must submit a compliance plan by October 21, 2024.
These recent developments provide a snapshot of the changes underway within Nukkleus Inc., highlighting the termination of key agreements, leadership changes, issuance of notes and possible delisting from the Nasdaq due to compliance issues.
InvestingPro Insights
Nukkleus Inc.’s recent decision to implement a reverse stock split and increase authorized shares comes at a critical time for the company. According to data from InvestingPro, NUKK’s market capitalization stands at a modest $4.77 million, reflecting its current challenges. The company’s financial health appears strained, with revenue down 51.92% over the past twelve months to $10.75 million and an operating income margin of -140.91%.
InvestingPro’s advice highlights that the NUKK share price has fallen significantly over the last year, with a one-year total price return of -96.55%. This context underscores the urgency of the reverse stock split to meet Nasdaq’s minimum offering price requirement. Furthermore, the suggestion that NUKK does not pay dividends to shareholders aligns with the company’s focus on restructuring rather than shareholder returns at this stage.
The company’s efforts to maintain its Nasdaq listing and create a more favorable capital structure are crucial given its current financial situation. InvestingPro offers 7 additional tips for NUKK, providing deeper insight into the company’s health for investors considering the stock post-split.
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