MGO Global Inc. (NASDAQ:MGOL), a Florida-based apparel manufacturer with a market capitalization of $4.62 million, has amended its Business Combination Agreement with Heidmar Inc., a maritime company, as stated in a recent SEC filing.
The amendment, dated December 17, 2024, modifies several terms of the original agreement, which was initially filed on June 20, 2024. According to InvestingPro data, MGOL's stock has declined over 65% in the past year, though analysis suggests the company may be undervalued at current levels.
Key changes to the agreement include the shift of financial tests for Earnout Shares from 2024 to 2025 and the provision for Heidmar to adjust the number of Holdings Shares at any time prior to closing. This adjustment, however, must ensure that MGO stockholders receive no less than 5.66% of the Holdings Shares immediately after closing and that the adjustment does not negatively impact the listing of Holdings Shares on Nasdaq.
The amendment also broadens the pool of MGO stockholders who can sign voting agreements in support of the merger and lowers the required percentage of shareholders from a majority to 45% for the special meeting to approve the transaction. Despite recent challenges, MGO maintains strong liquidity with a current ratio of 14.13 and has achieved notable revenue growth of 47% over the last twelve months.
Furthermore, the amendment permits MGO to offer Common Stock in excess of $6 million after the record date of the stockholders' meeting and to issue equity-linked securities, provided they convert into Common Stock before closing.
Additionally, Holdings is required to enter consultancy agreements with certain MGO executive officers, effective upon closing, to manage MGO’s business through its subsidiary, Americana Liberty, LLC, for at least six months post-closing.
In other recent news, MGO Global Inc. has announced significant developments. First, the company reported amendments to its bylaws, impacting shareholder meeting quorum and voting procedures. The changes include an adjustment to the quorum requirement and the introduction of electronic and telephonic voting options, potentially facilitating broader shareholder participation. These amendments are part of MGO Global's ongoing efforts to align its governance practices with shareholder interests.
In addition, the apparel company has regained compliance with Nasdaq's minimum stockholders' equity requirement. This was achieved through the sale of 242,543 shares of common stock under an Equity Distribution Agreement with Maxim Group LLC, generating net proceeds of $579,767.
Furthermore, MGO Global has announced plans to merge with Heidmar, Inc., a maritime services provider. The merger is structured through a new Marshall Islands holding company, where both MGO and Heidmar will become wholly-owned subsidiaries.
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