Nature's Miracle Holding Inc. (NASDAQ:NMHI), a company specializing in farm machinery and equipment, has entered into a securities purchase agreement with an unnamed investor on Monday, October 14, 2024. The agreement involves the sale of a convertible promissory note with a principal amount of $101,200, which includes an original issue discount of $13,200. The transaction was completed on the same day.
The note carries a one-time interest charge of 14% and is structured to be repaid in ten installment payments. The initial payment of $11,536.80 is due on November 15, 2024, followed by nine subsequent monthly payments of the same amount, totaling a payback of $115,368.00.
In the event of default, the note will become immediately payable, and Nature's Miracle Holding will be required to pay the investor an amount equal to 150% of the sum of the outstanding principal, accrued interest, and any default interest at a rate of 22% per annum.
Additionally, the investor has the right to convert the outstanding principal into restricted shares of Nature's Miracle Holding's common stock at a 25% discount to the market price, should an event of default occur. However, conversions are limited to ensure the investor does not receive more than 4.99% of the company's total outstanding common stock.
Nature's Miracle Holding has committed to reserving sufficient shares to cover up to eight times the number that may be issued upon conversion of the note.
In other recent news, Nature's Miracle Holding Inc. has made significant strides in managing its financial obligations. The company has entered into a trade payable forgiveness agreement with Visiontech Group, Inc., and Uninet Global Inc., reducing its debt by $2.1 million. This leaves Visiontech with a remaining balance of $577,500 owed to Uninet.
In addition to debt management, Nature's Miracle has been active in securing funding. The company has entered into agreements for convertible promissory notes with investors, totaling $579,260, and has successfully resolved a substantial financial obligation, a $180,000 convertible note.
On the revenue front, Nature's Miracle has secured a $5.1 million sales agreement with What Rebates LLC and a $2.4 million purchase order from a leading indoor grower in California for its Efinity brand grow lights. These deals are expected to significantly boost the company's revenue in late 2024.
In terms of executive transitions, the company's Chief Operating Officer, Darin Carpenter, has stepped down to a consulting role. Furthermore, Nature's Miracle has entered an exclusive distribution agreement with Vaighai Agro Products Ltd. for distributing Gro-Med Coco Coir Substrate products across the U.S. However, the company and Agrify Corporation have mutually agreed to terminate their merger plans.
InvestingPro Insights
Nature's Miracle Holding Inc. (NMHI) is facing significant financial challenges, as reflected in the latest InvestingPro data. The company's revenue for the last twelve months as of Q2 2024 stands at $9.63 million, with a concerning revenue growth decline of 18.29% over the same period. This context sheds light on why the company might be seeking additional funding through the convertible promissory note mentioned in the article.
The company's financial health appears precarious, with a negative gross profit of $0.58 million and an operating income of -$6.68 million for the last twelve months. These figures align with the company's decision to enter into a securities purchase agreement, possibly to secure working capital or fund operations.
An InvestingPro Tip highlights that NMHI's earnings per share have been negative for the last twelve months, which is consistent with the negative P/E ratio of -0.56 reported. This underscores the company's current unprofitability and the risks associated with its financial position.
Investors considering NMHI should note that InvestingPro offers 14 additional tips for a more comprehensive analysis of the company's prospects. These insights could be particularly valuable given the company's recent financial maneuvers and challenging market performance, with a year-to-date price total return of -98.47% as of the latest data.
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