Nukkleus Inc. (NASDAQ:NUKK), a management consulting services firm, has announced a reverse stock split and an increase in the number of authorized shares as per a recent SEC filing. The company’s board of directors, with shareholder approval, has decided on a one-for-eight reverse stock split, effective at 12:01 am eastern time on October 24, 2024. This move aims to boost the per-share bid price of the company's common stock to comply with Nasdaq's minimum bid price requirement.
Every eight shares of Nukkleus Inc.’s common stock will be consolidated into one share, and shareholders who would receive fractional shares will be granted one whole share instead. The reverse stock split will also proportionally 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 shares of common stock 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 CPAs, for the fiscal year ending September 30, 2024.
In other recent news, Nukkleus Inc. has finalized the termination of its major service 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 Unsecured Promissory Notes totaling $437,500 to X Group Fund of Funds, carrying a 12% annual interest rate. Concurrently, Nukkleus has seen leadership changes, with Menachem Shalom stepping in as the new CEO, replacing Jamal Khurshid, and the addition of David Rokach to the Board of Directors.
The company, however, is grappling with compliance issues, facing potential delisting from Nasdaq due to its failure to file a quarterly report on time and not meeting the minimum bid 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 ongoing changes within Nukkleus Inc., highlighting the termination of key agreements, leadership changes, issuance of promissory notes, and potential Nasdaq delisting 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 InvestingPro data, NUKK's market capitalization stands at a modest $4.77 million, reflecting its current challenges. The company's financial health appears strained, with revenue declining by 51.92% over the last twelve months to $10.75 million, and an operating income margin of -140.91%.
InvestingPro Tips highlight that NUKK's stock price has fallen significantly over the last year, with a one-year price total return of -96.55%. This context underscores the urgency of the reverse stock split to meet Nasdaq's minimum bid price requirement. Additionally, the tip indicating that NUKK does not pay a dividend 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 position. InvestingPro offers 7 additional tips for NUKK, providing deeper insights into the company's situation for investors considering the stock post-split.
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