NextPlat Corp ( NXPL ) shares are skyrocketing on Friday.

The company entered into a definitive business combination agreement with its majority-owned subsidiary Progressive Care Inc.

According to the business combination agreement, a NextPlat ( NXPL ) subsidiary will merge with Progressive Care, with the Merger Sub surviving as a wholly owned subsidiary of NextPlat ( NXPL ) and be renamed Progressive Care LLC.

Upon closing the merger, Progressive Care shareholders will receive newly issued, registered shares of NextPlat’s common stock. 

The exchange ratio of NextPlat ( NXPL ) shares to be issued in the business combination was calculated based upon a 20-day, volume-weighted average price of NextPlat’s Common Stock preceding execution of the business combination agreement and a value per share of common stock of Progressive Care at $2.20. 

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

Yesterday, NextPlat ( NXPL ) reported fiscal year 2023 revenues of $37.8 million, an increase of over 222% year over year. 

Gross margins for the full year increased significantly to 30% from 21% a year ago, primarily attributable to the healthcare operations because of the Progressive Care consolidation. 

“These developments, along with the planned launch of new products such as our Florida Sunshine brand of premium-grade vitamins and dietary supplements, represent significant opportunities for NextPlat ( NXPL ) to generate profitable new revenue streams, creating value for our clients, their customers, and our shareholders this year,” said Charles M. Fernandez, Executive Chairman and CEO of NextPlat Corp. ( NXPL )

Price Action: NXPL shares are trading higher by 34% to $2.02 on the last check Friday.