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Cycurion, Inc. (NASDAQ:CYCU), a company currently valued at $8.66 million and showing signs of financial stress according to InvestingPro analysis, reported Monday that it has entered into a series of exchange agreements with several investors to convert approximately $3.2 million of convertible debt into 3,133 shares of Series G Convertible Preferred Stock. The debt restructuring comes as the company faces significant challenges, with InvestingPro data revealing a concerning current ratio of 0.28 and negative EBITDA of $12.13 million. The transactions, which took place on August 12, involve Alpha Capital Anstalt, M2B Funding Corp., ADI Funding, Deltennium, Osher Capital, Lexi London, and ILE Associates.
Under the terms disclosed in the SEC filing, the company exchanged the following amounts of debt for Series G Convertible Preferred Stock:
- Alpha Capital Anstalt: $366,050 for 366 shares
- M2B Funding Corp.: $672,077 for 672 shares
- ADI Funding: $347,730 for 348 shares
- Deltennium: $617,667 for 618 shares
- Osher Capital: $103,800 for 104 shares
- Lexi London: $769,000 for 769 shares
- ILE Associates: $256,333 for 256 shares
Each share of Series G Convertible Preferred Stock is convertible into 1,000 shares of common stock, subject to certain limitations. The preferred shares carry a 12% annual dividend on the $0.0001 per-share stated value, payable quarterly in arrears in common stock. Holders have voting rights on an as-converted basis and are entitled to a liquidation preference equal to the stated value plus accrued and unpaid dividends, ahead of common shareholders.
Cycurion has authorized 10,000 shares of Series G Convertible Preferred Stock. The company stated that these exchanges are part of a recapitalization effort to strengthen its balance sheet, which appears crucial given the company’s weak financial health score of 1.18 as reported by InvestingPro. In addition, Cycurion indicated it plans to continue drawing from a previously disclosed $60 million equity line of credit, with $55 million remaining available. The stock has experienced significant volatility, with a year-to-date decline of 97%, suggesting substantial challenges ahead. (Get access to 13 additional InvestingPro Tips and comprehensive financial analysis at InvestingPro.) The company also noted it intends to pursue a reverse stock split to maintain compliance with Nasdaq Capital Market listing standards, pending shareholder approval.
The information reported is based on a statement contained in the company’s Form 8-K filing with the U.S. Securities and Exchange Commission. For investors seeking deeper insights into Cycurion’s financial health and future prospects, InvestingPro offers comprehensive analysis, including detailed metrics, Fair Value estimates, and expert financial health assessments.
In other recent news, Cycurion, Inc. has regained compliance with Nasdaq listing requirements, meeting the stockholders’ equity requirement with over $10 million reported. The company also announced securing new multi-year contracts totaling $69 million, though revenue from these contracts has been delayed due to typical project start deferrals. Additionally, Cycurion has authorized 10,000 shares of Series G Convertible Preferred Stock, granting holders voting rights and other legal entitlements. The company further amended its charter to authorize a new preferred stock series and completed the acquisition of a majority stake in SLG Innovation Inc. This acquisition involved a $2 million prepaid deposit, shares of common and preferred stock, and accounts receivable from SLG. Meanwhile, IQSTEL Inc. reported preliminary July revenue of approximately $35 million, exceeding its annualized revenue run rate target. IQSTEL aims to maintain this revenue level to achieve its full-year revenue goal of $340 million. These developments provide investors with insights into the recent activities and financial strategies of both companies.
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