Galaxy Next Generation Issues Shareholder Update

Rhea-AI Summary

Galaxy Next Generation (OTCQB:GAXY) has announced a reverse stock split as part of its recapitalization strategy to strengthen its share structure. The company reports growth in revenue and products, attributing the necessity of the stock split to prior loans converted to stock, which negatively impacted share price. This split is expected to enhance Galaxy's credibility, facilitate potential acquisitions, and improve its ability to raise capital. Galaxy aims for higher revenue generation in 2022, ultimately fostering a stable stock environment for investors.

Positive

• Reported revenue and product growth.
• Reverse stock split enhances credibility, aiding future acquisitions.
• Improved ability to raise higher quality capital with a cleaner capital structure.

Negative

• Prior loans converted to stock negatively impacted share price.
• Previous share structure limited market reaction and investor respect.

TOCCOA, GA / ACCESSWIRE / March 9, 2022 / Galaxy Next Generation, Inc. (OTCQB:GAXY) ("Galaxy" or the "Company), a provider of interactive learning technology solutions, is pleased to provide the following Shareholder Update Letter.

A letter to our shareholders:

As we have always been, and will continue to be, we would like to be as transparent as possible with you all about yesterday's reverse stock split and re-capitalization of our share structure. The company has experienced growth in revenue, products, employees, and all-around industry recognition over the past year or so, and for the business to capitalize on all of this, we raised money from various lenders. With the increase in cash outlay to support the business through the slow period of the 2020/2021 pandemic, those lenders converted their loans into stock which in return had a negative effect on both our share structure and our share price. However, without these loans and equity raised, we would not have been in a position of growth which has been represented over the past two quarters reflected in our Q1 and Q2 10Q reports.

The company has positioned itself to be an industry leader in both classroom audio products and with school safety and security equipment and software. Because of all of this, we felt it was the appropriate time to fix the share structure to represent a more accurate market cap and prepare us for what needs to happen for us to reach our long-term goals.

The reverse stock split and getting out of sub-penny land benefits our business. It makes our current and prospective customers and potential acquisitions easier to deal with as we were often not taken seriously as a sub-penny stock. Being able to utilize our stock for potential acquisitions is a major benefit of being a publicly traded company and as a sub-penny stock we were unable to do so. Finally, our ability to raise capital, and higher quality capital at that, is much improved with a cleaner capital structure and by no longer being a sub-penny stock.

It was our hopes that the market would have reacted more efficiently to our improved financials, lack of dilution, and our improved fundamentals, but with the previous share structure, it seemed to be a battle we couldn't win. We have fought hard to maintain a high level of integrity in the OTCQB market and to maintain our QB status, there was a need to have a price at a minimum of a penny. I asked for and was awarded three extensions to the original delinquency notice from OTC markets to give us as much time as possible to make the most calculated decision for the long-term success of the company and our long-term investors.

We strongly believe that the reverse split was a necessity for the growth of the company to continue at the pace we have set for ourselves. The timing was carefully considered to make sure that once we initiated a re-capitalization to the share structure, that we would not have to make the heavy issuances made over the past couple of years to sustain the company. It has always been our goal to run a cleaner more traditional debt/investment schedule and the improvements to the balance sheet have allowed us to reach that position.

In 2022, our focus is to become a larger, higher revenue generating company with traditional financing in place and a more desirable stock offering for institutional investors to gain respect and interest in what we are doing fundamentally as a company. All of this together will lead to a much stronger and more stable stock.

As always, we appreciate your support and ask for your understanding in corporate decisions that have been heavily thought out and desperately endured by management.

Sincerely,

Magen McGahee, CFO
and Management

About Galaxy Next Generation, Inc.

Galaxy Next Generation (OTCQB:GAXY) is a provider of interactive learning technology solutions that allows the presenter and participant to engage in a fully collaborative instructional environment. Galaxy's products include Galaxy's own private-label interactive touch screen panel as well as numerous other national and international branded peripheral and communication devices. Galaxy's distribution channel consists of 22+ resellers across the U.S. who primarily sell the Company's products within the commercial and educational market. Galaxy does not control where resellers focus their resell efforts, although generally, the K-12 education market is the largest customer base for Galaxy products - comprising nearly 90% of Galaxy's sales.

For additional information, please visit our website at: www.galaxynext.us.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the company's current plans and expectations, as well as future results of operations and financial condition. A more extensive listing of risks and factors that may affect the company's business prospects and cause actual results to differ materially from those described in the forward-looking statements can be found in the reports and other documents filed by the company with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investors Contact:

IR@GalaxyNext.us
p888-859-1274

SOURCE: Galaxy Next Generation

View source version on accesswire.com:
https://www.accesswire.com/692219/Galaxy-Next-Generation-Issues-Shareholder-Update

FAQ

What is the recent shareholder update from Galaxy Next Generation (GAXY)?

Galaxy Next Generation announced a shareholder update detailing a reverse stock split and recapitalization to improve its market cap and share structure.

How does the reverse stock split affect GAXY's stock price?

The reverse stock split is aimed at improving GAXY's share price by removing it from the sub-penny range, making the stock more attractive to investors.

What are Galaxy Next Generation's growth strategies for 2022?

In 2022, Galaxy aims to increase revenue generation through traditional financing and improving stock appeal to institutional investors.

What challenges did Galaxy Next Generation face before the reverse split?

Galaxy faced challenges from loans converted into stock, which negatively affected its share price and market perception.

Why did Galaxy Next Generation decide to conduct a reverse stock split?

The reverse stock split was deemed necessary for improving the company's credibility, facilitating acquisitions, and raising quality capital.