Below is the response from Logan to our questions.
Question: There are still plenty of authorized shares that have not been issued. What is the reason for the R/S and will the Authorized & Outstanding shares be reduced proportionally? (Kevin-Tennessee).
Response: 1. Meeting Listing Requirements: Some stock exchanges impose minimum price thresholds for listed securities. If a company's stock price falls below the exchange's minimum requirement, it may face the risk of delisting. Implementing a reverse stock split can increase the per-share price of the company's stock, bringing it back above the exchange's minimum listing requirement and maintaining its listing status.
2. Enhancing Perceived Value: A reverse stock split can increase the per-share price of a company's stock, which may enhance its perceived value among investors. Higher-priced stocks may attract more institutional investors or be perceived as more stable and reputable, potentially improving liquidity and marketability.
3. Reducing Outstanding Shares: By consolidating shares through a reverse split, a company can reduce the number of outstanding shares in circulation. This reduction in the float can increase earnings per share (EPS) and improve financial metrics on a per-share basis, making the company's stock more attractive to investors and potentially boosting its market capitalization.
4. Regaining Compliance: If a company fails to meet certain regulatory or exchange requirements, such as maintaining a minimum stock price or complying with shareholder equity thresholds, implementing a reverse stock split can help it regain compliance and avoid potential penalties or sanctions.
5. Dilution Management: Reverse stock splits can be used to manage dilution resulting from the issuance of additional shares or convertible securities. By reducing the number of outstanding shares, a reverse split can offset the dilutive effect of new share issuances and help preserve existing shareholders' ownership interests.
6. Signaling Strength or Stability: In some cases, companies may use reverse stock splits as a signaling mechanism to demonstrate strength, stability, or confidence in their prospects. By increasing the per-share price and reducing the number of outstanding shares, a reverse split may signal management's belief in the company's ability to deliver value and achieve long-term growth. Overall, reverse stock splits are strategic corporate actions that companies may undertake to address various operational, regulatory, or market-related challenges, enhance shareholder value, or communicate confidence in their business fundamentals. However, it's essential for investors to carefully evaluate the reasons behind a reverse split and consider its potential implications for the company's financial health and prospects.
Question: When will the new machines be purchased, how will they be funded, and what is your target number of miners? (Ihub Shareholder).
Response: 1. The short-term target goal of miners (12 to 24 months) is 10,000 miners. The long-term target goal would be to take it to 20,000 over (48 to 60 months).
2. The company is out trying to raise money through a Reg D. The company is working on the Reg A Filing, so once that is effective, that will be another tool to effectively help raise money, so through the market and the company is using the old school method of cold calling investors.
Question: Are there any plans to expand A.R.T. Digital beyond being solely a BTC mining operation? (Don-Mifflinburg, PA).
Response: · Not in the near term.
Question: Has there been any discussion with other companies about the possibility of a merger or buy-out? (Eli-Orlando, Fl.)
Response: · No
Question: What is the target share price once the R/S is done, and what is the projected timeframe for up-listing? (Dwayne-Saskatoon, Canada)
Response: · I will address the R/S projected price point, hopefully, at nine cents or better, depending on the price when R/S is effective. Depending on the requirements (audit, uplisting requirements, and meeting those said requirements), 18 to 24 months.
Question: Have you considered canceling the R/S and raising the share price by other means, such as a share buy-back? (Jeff-Pittsburgh, Pa)
Response: · No, at this juncture, the company is a small growth company that is trying to scale the business. When the company is in a position to do a share buyback, it could be open to the opportunity.
Question: You said you hired a PR firm a few months ago. We have not heard from them yet. Will you commit to a monthly Shareholder’s Update Letter to keep shareholders and potential shareholders informed? (Stinger-U.S.A.)
Response: · Working with counsel to format a shareholder letter.
Question: Were the miners purchased new and what is the life expectancy for them? (Iron Hammer)
Response: · Yes, the industry standard states 3 to 5 years.
Question: Do you have employees? If not, who will maintain the miners and retrieve the completed Bitcoins?
Response: · A.R.T. Digital Holdings Corp. has one employee, that is myself. A.R.T. Digital Holdings Corp. is a hybrid BTC Miner, in the sense that we find purchasing and hosting partners that match up with our company’s mission, current hosting partners the company has are Compass Mining, River Financial, Just for Krypto, BV Power Alpha. Each of these partners has its own maintenance and compliance teams to help maintain and monitor A.R.T. Digital miners. · The flow of how this process works is that miners are at hosting facilities, they mine the BTC, from there, the BTC is sent to our mining pool, then once the payment threshold has been met at said mining pool, the BTC is sent to the exchange/cold storage wallet.
Question: Probably 99% of R/S doesn't work out for the shareholder. Why are you confident the r/s will be different and bring shareholder value? (Brock-Kissimmee, Fl)
Response: · My confidence in the effectiveness of an R/S and its potential to bring shareholder value is based on a combination of factors, including the strategic rationale behind the split, market perception, execution plan, operational performance, and market conditions. By carefully evaluating these factors and implementing the R/S in a well-planned and transparent manner, the company will hope to increase the likelihood of delivering value to shareholders through the split.
