Nature's Miracle Holding Inc. (NASDAQ:NMHI), a farm machinery and equipment company, has entered into multiple agreements to convert its debt into equity, according to a recent 8-K filing with the Securities and Exchange Commission. The company also received a delisting notice from The Nasdaq Stock Market due to non-compliance with minimum bid price requirements.
On Monday, the company finalized a debt-to-equity conversion agreement with several parties, including Visiontech Group, Inc., Uninet Global Inc., and individuals Tie (James) Li and Zhiyi Zhang, who hold executive positions within Nature's Miracle Holding. The agreement converted $577,500 of Visiontech's outstanding trade payable into 218,750 shares of common stock at a conversion price of $2.64 per share. Similarly, $577,500 of debt owed by Nature's Miracle Inc. (DE) to Nature's Miracle Inc. (Cayman) was converted into common stock on the same terms.
Additionally, on Monday, Nature's Miracle Holding entered into conversion agreements with various noteholders, converting $845,000 of outstanding notes into 320,076 shares of common stock at the same conversion price. The company has agreed to file a registration statement with the SEC for the resale of the shares issued under these agreements.
The company also disclosed that on Wednesday, it received a notification from Nasdaq regarding its failure to comply with the $1.00 minimum bid price requirement. Nature's Miracle Holding did not regain compliance by the November 20 deadline and is not eligible for an extension. A hearing with the Nasdaq Hearings Panel is scheduled for December 17, 2024, to review the company's listing status.
In related news, Nature's Miracle Holding implemented a one-for-thirty reverse stock split on Wednesday, which reduced the number of issued and outstanding shares without altering the par value per share. This action was taken in response to the delisting notice and is reflected in the company's amended articles of incorporation.
In other recent news, Nature's Miracle Holding Inc. has made several significant financial and strategic moves. The company has converted $2 million of its debt into equity, involving key members of the management team and other debt holders. This move is part of a broader strategy to reduce financial liabilities and increase stockholder equity. Additionally, Nature's Miracle announced a 1-for-30 reverse stock split to meet Nasdaq's minimum bid price requirement. The company also outlined terms for a public offering aiming to raise approximately $3 million, managed by D. Boral (OTC:BOALY) Capital LLC.
On the strategic front, Nature's Miracle rebranded its subsidiary, Hydroman Inc., to Hydroman Electric Corporation, signaling a shift towards the electric vehicle sector. Furthermore, the company entered into several agreements for convertible promissory notes totaling $680,460 and reduced its trade payable debt by $2.1 million. Nature's Miracle also secured a $5.1 million sales agreement with What Rebates LLC and a $2.4 million purchase order from a major indoor grower in California for its Efinity brand grow lights. These agreements are expected to significantly enhance the company's revenue in late 2024.
However, Nature's Miracle faces potential Nasdaq delisting due to non-compliance with market value requirements. The company plans to appeal this decision and present a plan to regain compliance. In other developments, the company's Chief Operating Officer, Darin Carpenter, transitioned to a consulting role, and an exclusive distribution agreement was entered with Vaighai Agro Products Ltd. for distributing Gro-Med Coco Coir Substrate products across the U.S. Plans for a merger with Agrify Corporation, however, have been mutually terminated.
InvestingPro Insights
Nature's Miracle Holding Inc.'s financial health appears to be under significant strain, as reflected in the recent InvestingPro data. The company's revenue for the last twelve months as of Q3 2024 stands at $9.99 million, with a concerning revenue growth of -3.43% over the same period. This decline in revenue aligns with the company's recent struggles, including the debt-to-equity conversions and delisting notice mentioned in the article.
The company's profitability is also a major concern, with a gross profit margin of -5.13% and an operating income margin of -82.64% for the last twelve months as of Q3 2024. These negative margins underscore the financial challenges that have led to the debt conversion agreements and the need for strategic actions like the reverse stock split.
InvestingPro Tips highlight that Nature's Miracle Holding has a high risk of performing badly during market downturns, which is evident from its year-to-date price total return of -99.33%. Additionally, the company's stock is trading at a significant discount to its fair value based on analyst price targets, with a fair value of $21.0 compared to its current trading price.
For investors seeking a more comprehensive analysis, InvestingPro offers 9 additional tips for Nature's Miracle Holding, providing deeper insights into the company's financial situation and market position.
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