lost over 34% from its price and traded about 532,000 shares for the day.The most probable reason for the price fall appears to be the recent announcement released by the company. According to it, Alloy Steel intends to file Form 15 with the SEC in order to terminate the registration of its common stock.
Having in mind that the company’s shares are held by not more than 300 holders and that their price is very low, Alloy decided to deregister its common stock. In that case, its obligation to file financial reports with the SEC will be suspended.
Still, “Alloy intends to continue reporting its unaudited quarterly and audited annual financial results in press releases and on its website”, though the company expects to incur significant additional costs during the fiscal year 2011.[BANNER]
Apparently, after publishing these statements investors got disappointed and the stock aimed at the bottom of the chart.
Alloy manufactures and distributes Arcoplate, a wear-resistant alloy overlay wear plate, produced through a patented process. No other news on the company has been released and its website doesn’t exist anymore. Looks like after becoming a pink sheets company Alloy stopped providing any information on its business.
According to its latest quarterly results, the revenues have improved, however, the company still has long-term liabilities, higher expenses and stockholders’ equity of over $8 million. As pointed in Alloy’s 10-Q report, “The Company is actively reviewing options to raise additional capital through debt and/or equity financing”, which may immediately increase its liabilities or dilute the current shareholders.
Based on these facts, we can assume that presently the company doesn’t have the sufficient cash for its future development.
