NextPlat Corp shares are soaring today, here’s why

NextPlat Corp. (NASDAQ: NXPL) shares surged nearly 30% on Friday after the announcement of a definitive business combination agreement with its majority-owned subsidiary, Progressive Care Inc. (OTCQB: RXMD).

What does NextPlat merger with Progressive Care mean?

The merger between NextPlat and Progressive Care represents a strategic move aimed at enhancing synergies and creating value for shareholders of both companies.

By consolidating operations and resources, the combined entity is expected to leverage its strengths more effectively, potentially leading to improved financial performance and market competitiveness.

How are shareholders impacted?

Progressive Care shareholders are set to receive newly issued shares of NextPlat’s common stock as part of the merger agreement.

The exchange ratio for these shares has been determined based on a 20-day volume-weighted average price of NextPlat’s stock and a value per share of Progressive Care at $2.20.

This implies that Progressive Care shareholders will become shareholders of NextPlat, allowing them to participate in the future growth and potential upside of the combined entity.

NextPlat financial health

NextPlat recently reported fiscal year 2023 revenues of $37.8 million, marking a significant increase of over 222% year over year.

Additionally, gross margins for the full year improved to 30% from 21% primarily due to the consolidation of Progressive Care’s healthcare operations.

These positive financial results, coupled with the planned launch of new products such as the Florida Sunshine brand of premium-grade vitamins and dietary supplements, demonstrate NextPlat’s commitment to driving profitable revenue growth and creating value for its stakeholders.

The merger is expected to close in the third quarter of 2024, subject to regulatory and stockholder approvals, as well as other customary closing conditions.