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Urban-gro Inc. (NASDAQ:UGRO) shares jumped 33.71% to $0.54 in after-hours trading on Tuesday, following the company’s disclosure of a $2 million asset sale and multiple corporate developments aimed at addressing compliance issues.
Check out the current price of UGRO stock here.
The controlled environment agriculture company completed the sale of its non-CEA architectural and construction services business to 2WR Holdco LLC for $2 million in cash, according to a Form 8-K filing dated September 2. The transaction, executed on August 27, involved divesting subsidiaries, including 2WR of Georgia Inc., while retaining the core CEA operations.
The deal structure included a $500,000 previous deposit offset and assumption of certain debts by the buyer. Urban-gro retained its controlled environment agriculture business, allowing the company to focus on its core competency in specialized growing facilities.
The Lafayette-based company faces mounting pressure from Nasdaq regarding multiple compliance failures. The company received a determination letter on August 28 confirming it failed to meet the minimum $1.00 bid price requirement by the August 25 deadline.
The delisting threat encompasses three violations: the minimum bid requirement, failure to file timely quarterly and annual reports, and insufficient stockholders’ equity below the required $2.5 million threshold. A hearing is scheduled for October 7, with the company requesting an additional stay of suspension.
CEO Bradley Nattrass voluntarily reduced his annual salary from $450,000 to $350,000 through November 30 as part of company-wide cost reduction efforts. Other leadership team members implemented similar voluntary pay cuts, according to the filing.
Director Lewis Wilks resigned on August 26, though the company stated his departure wasn’t due to operational disagreements. Wilks disclosed a financial interest in the asset purchase transaction.
Urban-gro has tumbled 70.33% over the past year, trading between $0.26 and $1.92, with a market capitalization of $5.23 million.
According to the Benzinga Pro data, UGRO closed regular trading on Tuesday at $0.40, down 2.49% from the previous session, before surging in after-hours activity as investors responded positively to the streamlining efforts and cash infusion.
Benzinga’s Edge Stock Rankings indicate that UGRO is experiencing long-term consolidation along with medium and short-term upward movement. Here is how the stock fares on other parameters.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Posted In: UGRO
