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Urban-gro, Inc. (NASDAQ:UGRO) announced Tuesday it has entered into a binding letter of intent with Flash Sports & Media, Inc. to pursue a merger between the two companies. According to a statement provided in a Securities and Exchange Commission filing, the proposed transaction would see Flash merge into a newly formed, wholly owned subsidiary of Urban-gro, which would then consolidate into a second subsidiary. With Urban-gro’s weak financial health score of 0.66 on InvestingPro and negative return on assets of -24.34%, this merger could represent a strategic pivot for the company. Discover 12 additional key insights about Urban-gro and access comprehensive analysis through InvestingPro’s detailed research reports.
As outlined in the agreement, Flash will provide Urban-gro with a $200,000 cash deposit within fifteen days. Upon completion of the merger, stockholders of Flash are expected to receive unregistered Urban-gro common shares equal to 19.99% of the outstanding shares immediately prior to the merger, as well as unregistered shares of a newly created series of non-voting preferred stock. The preferred stock would be economically equivalent to common stock and would automatically convert to common stock upon approval by Urban-gro’s stockholders. If fully converted, former Flash stockholders would hold approximately 90% of the combined company.
The letter of intent also specifies that Urban-gro will change its name to Flash Sports & Media Holdings, Inc. or a similar name after the merger closes. The company will seek stockholder approval for the conversion of the preferred stock as soon as practicable following closing.
Board composition will change post-merger. Initially, four board members will be designated by Urban-gro’s current board and one by former Flash stockholders. After stockholder approval for conversion of the preferred stock, the board will be reconstituted to include one member designated by the current board and four by former Flash stockholders.
The agreement includes a 90-day exclusivity period during which neither Urban-gro nor its affiliates may solicit or enter into similar transactions with other parties.
The proposed issuance of common and preferred shares, as well as the underlying common shares upon conversion, will be conducted as unregistered sales under exemptions provided by federal securities laws.
All information is based on a statement contained in the company’s SEC filing Tuesday.
In other recent news, Urban-gro, Inc. has rescheduled its Nasdaq delisting hearing to October 14, 2025, after initially setting it for October 7. The company received a determination letter from Nasdaq on August 28, 2025, indicating non-compliance with the minimum bid price requirement of $1.00 per share, as its stock has closed below this threshold for at least 30 consecutive business days. Additionally, Urban-gro has reached a settlement agreement with Gemini Finance Corp. over a loan default involving a $10 million secured line of credit to its subsidiary, UG Construction. As part of the settlement, Gemini Finance acquired most of the subsidiary’s assets through a foreclosure sale for $450,000. Furthermore, Urban-gro announced a $2 million sale of its non-controlled environment agriculture (CEA) architectural business, which includes subsidiaries 2WR of Georgia, Inc. and related assets. The sale targets the company’s commercial, industrial, and municipal architectural services, while retaining its core CEA business. Urban-gro has also entered into a non-binding letter of intent with CM Capital Management to sell all assets of its architectural design subsidiary, 2WR of Georgia, Inc., with a $500,000 refundable deposit received as part of the agreement.
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