Armlogi Holding Corp. reaches deal to amend equity purchase agreement

Armlogi Holding Corp. (NASDAQ:BTOC), a company specializing in public warehousing and storage, has entered into an agreement to modify the terms of its existing financing arrangements with investor YA II PN, LTD. This move comes after the occurrence of an Amortization Event, triggered by the company’s stock trading below the floor price. According to InvestingPro data, the company operates with a significant debt burden, with a debt-to-equity ratio of 3.71x and total debt of $123.11 million against a market capitalization of just $42.51 million.

On Monday, the company acknowledged that its stock’s Volume Weighted Average Price (VWAP) had fallen below the floor price of $1.1880 for five consecutive trading days, constituting a Floor Price Event under the terms of the convertible promissory notes issued in late 2024. The stock, currently trading at $1.01, has experienced a significant decline of about 77% over the past year, with InvestingPro analysis indicating the stock is currently in oversold territory. InvestingPro subscribers have access to 12 additional key insights about BTOC’s financial health and market position. As a result, Armlogi agreed to make an immediate cash payment of $850,000 and to initiate weekly payments of at least $200,000 starting the week of March 31, 2025, through May 19, 2025.

Furthermore, Armlogi has committed to paying the investor a reduced fee of $150,000 in full satisfaction of the remaining half of the originally agreed-upon $500,000 commitment fee. This payment is also scheduled for today.

In exchange for the company’s compliance with the new terms, YA II PN, LTD. has agreed to a forbearance period through May 20, 2025. During this time, the investor will defer the company’s obligation to make monthly amortization payments and will not submit any conversion notices unless the stock trades above $1.80 per share. Additionally, the investor has agreed to waive any Payment Premium related to the company’s payments made in accordance with the Modification Agreement.

These developments, as detailed in the SEC filing, underscore the efforts of Armlogi to manage its financial obligations and maintain its operations amid market fluctuations. The company’s financial health score from InvestingPro is currently rated as "WEAK," with particular concerns about its cash burn rate and ability to service debt obligations. The information is based on a press release statement and InvestingPro analysis.

In other recent news, Armlogi Holding Corp. has announced its intention to acquire Leopard Transnational Inc. to enhance its e-commerce fulfillment capabilities. This strategic move aims to expand Armlogi’s warehouse network by adding 360,000 square feet of storage space, strengthening its position in high-growth logistics segments. The acquisition involves purchasing 100% of Leopard’s capital stock, with the deal comprising Armlogi common stock and potential earn-out payments based on Leopard’s performance targets. Leopard specializes in cross-border e-commerce fulfillment and provides services such as customs clearance and last-mile delivery, which will complement Armlogi’s offerings. The integration of Leopard’s proprietary technology system is expected to enhance service capabilities for Armlogi’s clients. The acquisition aligns with Armlogi’s growth strategy, as stated by Chairman and CEO Aidy Chou, who highlighted the company’s readiness to adapt to changes in international trade policies. The deal’s completion is subject to due diligence, negotiation of a definitive agreement, and necessary approvals, with expectations to finalize within 60-90 days. Armlogi plans to retain key Leopard personnel to ensure operational continuity and maintain customer relationships.

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