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Nukkleus Inc., a Delaware-based management consulting services company with a current market capitalization of $39 million, has amended its agreement to acquire a controlling stake in Star 26 Capital Inc., a defense acquisition firm.
According to InvestingPro data, Nukkleus's stock has shown remarkable volatility, with a 618% surge over the past six months despite a recent 14% decline. The amended terms, announced on Monday, increase the company's investment to $21 million, up from the previously agreed $15 million.
The transaction, initially set on December 15, 2024, involves Nukkleus acquiring 51% of Star's issued and outstanding capital. The consideration includes $5 million in cash, a $16 million promissory note, 2,385,170 shares of Nukkleus common stock, and a five-year warrant for the purchase of 6,907,859 shares at $1.50 per share. With annual revenue of $10.75 million and an overall weak financial health score according to InvestingPro, this acquisition represents a significant strategic move for the company.
Additionally, Nukkleus retains an option to purchase the remaining 49% of Star for $16,084,250, which would be paid through a combination of cash, promissory note, common stock, and additional warrants.
The amendment also stipulates that Nukkleus will lend Star up to $1.8 million before the deal's closing. Furthermore, the option to acquire the remaining equity will expire if Star completes an initial public offering or direct listing on a major exchange such as Nasdaq or NYSE.
Menachem Shalom, the CEO and director of Nukkleus, who also holds significant positions in Star, played a pivotal role in the negotiations.
This strategic acquisition is expected to enhance Nukkleus's position in the defense sector, marking a substantial expansion for the company. Based on InvestingPro analysis, the stock appears to be trading near its Fair Value, with additional insights and metrics available to subscribers. The agreement and its amendment reflect the company's commitment to investing in growth opportunities and diversifying its portfolio, particularly important given its current gross profit margin of 4.67%.
In other recent news, Nukkleus Inc. has announced a strategic partnership with Translink Corporate Finance to seek acquisition opportunities in the air defense industry, aligning with a recent executive order to develop a next-generation missile defense system.
The firm also plans to acquire a 51% stake in Star 26 Capital Inc., which owns a majority in RIMON, a supplier of components for the Iron Dome systems. This is a recent development that illustrates Nukkleus's commitment to expanding its footprint in the defense sector.
The company has also welcomed Brigadier General Mark Beesley (Ret.) as a senior advisor to inform its acquisition strategy. In addition, Nukkleus has agreed to sell its subsidiary, Digital RFQ Limited (DRFQ), to Jamal Khurshid for £1,000, marking a strategic shift towards the defense sector.
Meanwhile, Two Hands Corp has undergone a major leadership overhaul, with Emil Assentato assuming control of approximately 57% of the company's issued and outstanding common stock. Assentato has been appointed as Chief Executive Officer, President, Chief Financial Officer, Treasurer, Secretary, and a member of the Board of Directors of Two Hands Corp.
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