COCONUT GROVE, Fla. - NextPlat Corp (NASDAQ: NXPL), a global e-commerce provider, announced today that it has entered into a definitive business combination agreement with its majority-owned subsidiary, Progressive Care Inc. (OTCQB: RXMD). The merger is expected to close in the third quarter of 2024, subject to regulatory and stockholder approvals and other customary closing conditions.
The agreement, negotiated by independent director committees from both companies, will result in Progressive Care merging into a wholly owned subsidiary of NextPlat and being renamed Progressive Care LLC. Progressive Care shareholders are set to receive newly issued shares of NextPlat's common stock, with the exchange ratio based on a 20-day volume-weighted average price of NextPlat's stock and a value per share of Progressive Care at $2.20.
Charles M. Fernandez, Executive Chairman and CEO of NextPlat, stated that the merger is expected to yield revenue synergies and significant cost reductions, enhancing both top-line growth and profitability. He highlighted the potential expansion of Progressive Care's consumer offerings and the anticipated annual cost savings from reduced legal and accounting expenses.
NextPlat and Progressive Care's Boards of Directors have unanimously approved the transaction. The merger follows strategic investments by NextPlat and others in Progressive Care totaling over $10 million since August 2022, culminating in a controlling interest as of July 1, 2023.
Progressive Care, a health services organization, offers a range of services including data management, pharmacy services, and health practice risk management. NextPlat operates an e-commerce communications division and provides pharmacy and healthcare data management services in the U.S. through Progressive Care.
Legal advisors for the business combination are ArentFox Schiff LLP for NextPlat and Lucosky Brookman LLP for Progressive Care. Additional details will be available in the Current Reports on Form 8-K to be filed with the U.S. Securities and Exchange Commission.
This announcement is based on a press release statement from NextPlat Corp.
InvestingPro Insights
As NextPlat Corp (NASDAQ: NXPL) enters a definitive business combination agreement with Progressive Care Inc., investors are closely monitoring the financial health and market performance of NextPlat. According to InvestingPro data, the company holds a market capitalization of $28.09 million. The revenue growth for NextPlat has been impressive, with an increase of 113.0% over the last twelve months as of Q3 2023, and a quarterly spike of 481.19% in Q3 2023. Despite these growth figures, it's worth noting that the company has not yet reached profitability, as indicated by the negative operating income of -$10.44 million and an operating margin of -43.95% for the same period.
InvestingPro Tips suggest that NextPlat has a stronger balance sheet than some may expect, as it holds more cash than debt. Additionally, the company's liquid assets exceed its short-term obligations, which could provide some financial flexibility in the near term. However, it's important to consider that NextPlat is quickly burning through cash and its valuation implies a poor free cash flow yield. Furthermore, the company has not been profitable over the last twelve months and does not pay a dividend to shareholders.
Investors interested in a deeper analysis of NextPlat can explore the full suite of InvestingPro Tips, with additional insights available at https://www.investing.com/pro/NXPL. For those looking to take advantage of these professional insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 6 more InvestingPro Tips available for NextPlat, offering a comprehensive view of the company's financial status and market potential.
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