urban-gro (UGRO) Stock Surges Nearly 78% After Hours — Here's Why

urban-gro Inc. (NASDAQ:UGRO) jumped 77.71% in after-hours trading to $5.74 on Tuesday following the company’s announcement that it completed its merger with U.S.-based Flash Sports and Media, Inc.

The stock closed regular session down 10.03% at $3.23, according to Benzinga Pro data.

Here’s How the Merger Deal Is Structured

On Tuesday, the Colorado-based company acquired 100% of Flash’s outstanding shares. Under the terms of the deal, Flash shareholders will receive a capped amount of unregistered Common Stock at closing, structured to stay below the threshold requiring stockholder approval under Nasdaq Listing Rule 5635(d), which mandates approval for issuances of 20% or more of outstanding Common Stock at below the minimum price in non-public offering transactions.

The company added that Flash shareholders will also receive newly created non-voting preferred stock. Upon stockholder approval, the preferred stock will convert into common stock. Together with the common stock issued at closing, the total shares received by Flash shareholders will equal Flash’s agreed-upon equity valuation divided by $3.23, representing UGRO’s Tuesday closing price.

Nasdaq Compliance a Key Catalyst

The merger positions UGRO above Nasdaq’s minimum $2.5 million stockholders’ equity threshold under Listing Rule 5550(b)(2), according to the company’s announcement.

CEO Bradley Nattrass stated the company anticipates “a lot of transformative developments in the quarters ahead.”

Flash President Anna G. said the merger “positions Flash to scale with greater capital strength, credibility, and strategic flexibility.”

Thunder Rock Capital LLC served as the exclusive mergers and acquisitions advisor.

Trading Metrics, Technical Analysis

urban-gro has a Relative Strength Index (RSI) of 30.66.

The market capitalization of the integrated professional services consulting firm stands at $2.43 million, with its shares reaching a 52-week high of $21.50 and a low of $2.84.

UGRO has fallen 83% over the past 12 months.

Currently, the stock is positioned at about 2.1% above its 52-week low, near the low end.

UGRO's long-term trend and weak positioning suggest that any potential recovery would need clear confirmation before investors consider making significant moves.

Benzinga’s Edge Stock Rankings indicate that UGRO has a negative price trend across all time frames.

Photo Courtesy: Champ008 on Shutterstock.com

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.