Nature's Miracle Holding Inc. (NASDAQ:NMHI), a company specializing in farm machinery and equipment, has entered into a significant private placement agreement with an accredited investor on January 10, 2025. The transaction includes the sale of newly created Series A Preferred Stock and warrants, with the potential to raise $3 million for the company.
The deal comes at a crucial time for NMHI, which has seen its stock decline 99.45% over the past year and currently trades at $1.83. According to InvestingPro analysis, the company shows a weak financial health score of 0.39, with negative EBITDA of -$8.1M in the last twelve months.
Under the agreement, the investor will purchase 3,000 shares of Series A Preferred Stock at a stated value of $3,000,000 for a discounted purchase price of $2,700,000. Moreover, the investor will receive warrants to acquire an equal number of shares of common stock and an incremental warrant for up to 30,000 additional Preferred Shares, along with corresponding common stock warrants, at 90% of the stated value. The financing comes as NMHI faces liquidity challenges, with a current ratio of 0.41 and revenue of $9.99M in the last twelve months.
The completion of this deal is contingent upon certain conditions, including Nature's Miracle Holding Inc. obtaining an extension from the Nasdaq to meet its minimum maintenance requirements by March 31, 2025. The initial payment of $1,800,000 will be made upon the deal's closing, with the remaining $900,000 due upon a registration statement's effectiveness with the SEC for the resale of the shares related to the Preferred Shares and warrants.
The warrants have a ten-year lifespan and an initial exercise price set at 110% of the common stock's closing price on the last trading day before the deal's closure. This price is subject to adjustments under specific conditions.
The Preferred Shares will accrue dividends at a rate of the higher of the prime rate plus 5.5% or 13.5%, payable quarterly. In the event of a Triggering Event, as defined in the Certificate of Designations, the dividend rate could increase to a maximum of 18%.
Conversion terms for the Preferred Shares into common stock are determined by a formula involving the stated value plus any accrued amounts and a bonus, divided by the conversion price, which is initially equal to the common stock's closing price on the day before the transaction closes. This conversion price is also adjustable under certain conditions.
Nature's Miracle Holding Inc. will not issue common stock upon conversion or exercise of the warrants if it would breach Nasdaq's issuance rules without prior stockholder approval.
The company has engaged D. Boral (OTC:BOALY) Capital LLC as the exclusive placement agent for the offering and will pay a fee and reimburse certain expenses.
This strategic move, facilitated by a securities purchase agreement and related documents, is based on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933. The information provided here is based on a press release statement.
In other recent news, Nature's Miracle Holding Inc. has been actively maneuvering its financial and strategic positions amidst challenging circumstances. The company has secured a high-interest loan from Maximcash Solutions LLC, amounting to $311,000, with the company's stock serving as collateral. This move is coupled with a series of strategic shifts, including acquiring a majority stake in Bitcoin mining company J&Y Marigold Ltd. and establishing a new subsidiary, NM Data Inc., to develop Bitcoin mining facilities.
Nature's Miracle has also entered into a significant investment agreement with Future Tech Incorporated to construct a new data center and vertical farming facility. Furthermore, the company has appointed new leadership, with Daphne Y. Huang and George Yutuc stepping in as Chief Financial Officer and Chief Operating Officer, respectively.
As part of the company's strategic diversification, Nature's Miracle has expanded into the Bitcoin mining industry by investing up to $3 million in Future Tech Incorporated through its subsidiary, NM Data Inc. The company has also converted $2 million of its debt into equity and implemented a 1-for-30 reverse stock split in response to a Nasdaq delisting notice due to non-compliance with minimum bid price requirements.
Despite these developments, Nature's Miracle faces potential Nasdaq delisting due to non-compliance with market value requirements and has plans to appeal this decision. The company's future expectations are based on the analysis provided by independent financial analysts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.