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Item 5. Market for Registrant’s Common Equity

2023-03-30 compared with 2022-03-29 · 59 added, 78 removed, 6 unchanged (96% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

February 17, 2021, we completed a public offering of 6,210,000 shares of our common stock, inclusive of the underwriters’ full

overallotment, at $10.00 per share for total gross offering proceeds of $62,100,000.

In connection with the offering, we received approval

to list our common stock on the Nasdaq Capital Market under the symbol “UGRO”.

Prior to the offering, shares of our common

stock were quoted on the OTC Markets Group, Inc.

OTCQX Marketplace under the symbol “UGRO”.

Although our shares were quoted

on the OTCQX Marketplace from October 7, 2019 through February 11, 2021, because trading on the OTCQX Marketplace was infrequent and

limited in volume, the prices at which such transactions occurred did not necessarily reflect the price that would have been paid for

our common stock in a more liquid market.

trading price of our common stock has been, and may continue to be, subject to wide price fluctuations in response to various factors,

many of which are beyond our control, including those described in Part I, Item 1A, “Risk Factors.”

The following table sets forth the high and low closing

bid price information for our common stock on the Nasdaq Capital Market for the time periods indicated.

Prior to February

12, 2021, our common stock was traded on the OTCQX Marketplace.

Trading activity for our common stock on the OTCQX Marketplace

can be found at www.otcmarkets.com .

Quarter Ended

Market Information

On February 17, 2021, we completed a public offering of 6,210,000 shares of our common stock, inclusive of the underwriters’ full overallotment, at $10.00 per share for total gross offering proceeds of $62,100,000.

In connection with the offering, we received approval to list our common stock on the Nasdaq Capital Market under the symbol "UGRO." Prior to the offering, shares of our common stock were quoted on the OTC Markets Group, Inc.

OTCQX Marketplace under the symbol "UGRO." Although our shares were quoted on the OTCQX Marketplace from October 7, 2019 through February 11, 2021, because trading on the OTCQX Marketplace was infrequent and limited in volume, the prices at which such transactions occurred did not necessarily reflect the price that would have been paid for our common stock in a more liquid market.

The trading price of our common stock has been, and may continue to be, subject to wide price fluctuations in response to various factors, many of which are beyond our control, including those described in Part I, Item 1A, "Risk Factors."

The following table sets forth the high and low closing bid price information for our common stock on the Nasdaq Capital Market for the time periods indicated.

Trading activity for our common stock on the OTCQX Marketplace can be found at www.otcmarkets.com .

Quarter Ended Low High

December 31, 2022 $ 2.63 $ 2.87

1 unchanged sentence

June 30, 2022 $ 4.68 $ 5.12

February 12 thru March 31, 2021

of March 26, 2021, we had 6,846 holders of record for our Common Stock.

our inception, we have not paid any dividends on our common stock, and we currently expect that, for the foreseeable future, all earnings,

if any, will be retained for use in the development and operation of our business.

In the future, our Board may decide, at its discretion,

whether dividends may be declared and paid to holders of our common stock.

are subject to certain reporting requirements and furnish annual financial reports to our stockholders, certified by our independent

accountants, and furnish unaudited quarterly financial reports in our quarterly reports filed electronically with the SEC.

and information filed by us can be found at the SEC website, www.sec.gov.

SALES OF UNREGISTERED SECURTIES

the years ended December 31, 2020 and 2021, we issued the following securities that were not registered under the Securities

February 21, 2020, we entered into a letter agreement (the “Credit Agreement”) by and among us, as borrower, urban-gro

Canada Technologies Inc.

and Impact Engineering, Inc., as guarantors, the lenders party thereto, and Bridging Finance Inc., as administrative

agent for the lenders (the “Agent”).

As additional consideration for the entering into the Credit Agreement, we issued

83,333 shares of our common stock and warrants to purchase 20,746 shares of common stock with an exercise price of $14.46 per share

to the Agent.

March 31, 2022 $ 10.26 $ 11.24

Quarter Ended Low High

December 31, 2021 $ 8.78 $ 14.77

September 30, 2021 $ 8.51 $ 17.30

June 30, 2021 $ 6.75 $ 10.50

March 31, 2021 $ 6.90 $ 13.80

As of March 16, 2023, we had 52 holders of record of our Common Stock.

The number of shareholders of record does not include beneficial owners of our common stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.

Since our inception, we have not paid any dividends on our common stock, and we currently expect that, for the foreseeable future, all earnings, if any, will be retained for use in the development and operation of our business.

In the future, our Board may decide, at its discretion, whether dividends may be declared and paid to holders of our common stock.

We are subject to certain reporting requirements and furnish annual financial reports to our shareholders, certified by our independent accountants, and furnish unaudited quarterly financial reports in our quarterly reports filed electronically with the SEC.

All reports and information filed by us can be found at the SEC website, www.sec.gov.

UNREGISTERED SALES OF EQUITY SECURITIES

During the years ended December 31, 2022, 2021 and 2020, we issued the following securities that were not registered under the Securities Act:

• On October 31, 2022 the Company issued 271,875 shares of the Company’s common stock at a price per share of $4.06 for a total value of $1.1 million as part of the Initial Purchase Price of the DVO Acquisition as more fully described in Note 1 to the Condensed Consolidated Financial Statements.

• On April 29, 2022, the Company issued 283,515 shares of the Company’s common stock at a price per share of $8.82 for a total value of $2.5 million as part of the Initial Purchase Price of the Emerald Acquisition as more fully described in Note 1 to the Condensed Consolidated Financial Statements.

• On June 28, 2021, the Company issued 202,066 shares of the Company’s common stock at a price per share of $9.90 for a total value of $2.0 million as part of the initial consideration paid pursuant to the 2WR Purchase Agreement as more fully described in Note 1 to the Condensed Consolidated Financial Statements.

• On February 21, 2020, we entered into a letter agreement (the "Credit Agreement") by and among us, as borrower, urban-gro Canada Technologies Inc.

and Impact Engineering, Inc., as guarantors, various lenders, which may include Bridging Finance Inc., as administrative agent for the lenders (the "Agent").

As additional consideration for the entering into the Credit Agreement, we issued 83,333 shares of our common stock and warrants to purchase 20,746 shares of common stock with an exercise price of $14.46 per share to the Agent.

We relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act to issue the securities.

December 15, 2020, we signed a $1,854,500 convertible note (the “Notes”) bridge financing (the “Bridge Financing”).

The Bridge Financing is a combination of $1,354,500 received on November 20, 2020, and an additional $500,000 received on December

The Bridge Financing was raised by a combination of our Board of Directors, our current investors and two new institutional

In connection with the Bridge Financing, an outstanding $1,000,000 promissory note and $4,500 interest accrued thereon was

converted into a Note.

The Notes were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities

• On December 15, 2020, we signed a $1,854,500 convertible note (the "Note") by and among us, as borrower, and various lenders, which may include Bridging Finance Inc., as lender (the "Bridge Financing").

The Bridge Financing was a combination of $1,354,500 received on November 20, 2020, and an additional $500,000 received on December 15, 2020.

The lenders in our Bridge Financing were a combination of our Board, our current investors and two new institutional funds.

In connection with the Bridge Financing, an outstanding $1,000,000 promissory note and $4,500 interest accrued thereon was converted into the Notes.

The Notes were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

The Notes carried interest at the rate of 12% and were scheduled to mature on December 31, 2021.

Pursuant to the mandatory conversion

provisions therein, the Notes plus accrued interest of $53,725 were converted into 254,430 shares of common stock upon completion

of the public offering described in more detail below.

of Registered Public Offering

February 11, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with ThinkEquity, a

division of Fordham Financial Management, Inc.

(the “Underwriter”), relating to the Company’s underwritten public offering

of its common stock.

Pursuant to the Underwriting Agreement, the Company agreed to sell 5,400,000 shares of Common Stock to the Underwriter

at a public offering price of $10.00 per share, and granted the Underwriter a 45-day over-allotment option to purchase up to 810,000

additional shares of Common Stock, equivalent to 15% of the shares of Common Stock sold in the Offering (the “Option”), pursuant

to the Company’s registration statement on Form S-1 (File Nos.

333-250120 and 333-253011) (the “Registration Statement”),

under the Securities Act of 1933.

The offering closed on February 17, 2021, and the Company sold 6,210,000 shares of Common Stock to

the Underwriter for total gross proceeds of $62.1 million, which includes 810,000 shares sold upon the full exercise of the Option.

deducting the underwriting commissions, discounts, and offering expenses, the Company received net proceeds of approximately $57.4

On February 17, 2021, pursuant to the Underwriting Agreement, the Company issued the Warrants to purchase up to an aggregate

of 310,500 shares of Common Stock.

The Warrants may be exercised beginning on August 11, 2021 until February 11, 2026.

The initial exercise

price of each Warrant is $12.50 per share, which represents 125% of the Offering Price.

On February 19, 2021 we used $5.8 million of

the net proceeds to repay outstanding under and terminated the Credit Agreement.

We intend to use the remaining net proceeds to support

our organic growth, to expand in the European CEA market and for other general corporate purposes, including to fund potential future

investments and acquisitions of companies that we believe are complementary to our business and consistent with our growth strategy.

Although we may, from time to time, evaluate potential strategic investments and acquisitions, we do not have any definitive agreements

in place to make any such acquisitions at this current time.

The expected use of net proceeds from the offering represents our intentions

based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and

As a result, our management will have broad discretion over how these proceeds are used.

The remaining net proceeds will be invested

in short-term investments until needed for the uses described above.

Pursuant to the mandatory conversion provisions therein, the Notes plus accrued interest of $53,725 were converted into 254,430 shares of common stock upon completion of our 2021 public offering.

The foregoing issuances of restricted shares of common stock were issued under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder.

The Company believes the issuance of the foregoing restricted shares was exempt from registration as a privately negotiated, isolated, non-recurring transaction not involving a public solicitation.

No commissions were paid regarding the share issuances, and the share certificates were issued with a Rule 144 restrictive legend.

Purchase of Equity Securities by Issuer and Affiliated Purchasers

The following table summarizes purchases by us of our common stock during the during the indicated quarters and months, and year ended December 31, 2022:

Total number of shares purchased

Average price paid per share

Total number of shares purchased as part of publicly announced plans or programs

Maximum number (or approximate dollar value ) of shares that may be purchased under the plan(s)

First quarter of 2022 419,088 9.00 924,003 $ 18,333

Second quarter of 2022 — — 924,003 $ 18,333

Third quarter of 2022 63,123 2.90 987,126 $ 1,835,063

October 1 - October 31, 2022 73,784 3.62 1,060,910 $ 1,567,666

November 1 - November 30, 2022 29,690 3.64 1,090,600 $ 1,459,466

December 1 - December 31, 2022 9,233 3.25 1,099,833 $ 1,429,458

594,918 7.33 1,099,833 $ 1,429,458

The Company’s Board has authorized the Company to repurchase common stock through a variety of methods, including open market repurchases, purchases by contract (including, without limitation, 10b5-1 and 10b-18 plans), and/or privately negotiated transactions.

The amount, timing, or prices of repurchases, may vary based on market conditions and other factors.

The program does not have an expiration date and can be modified or terminated by the Board at any time.

On May 24, 2021, the Board authorized a stock repurchase program to purchase up to $5.0 million of outstanding shares of the Company’s common stock.

On January 18, 2022, the Board authorized a $2.0 million increase to the stock repurchase program, to a total of $7.0 million.

On February 2, 2022, the Board authorized an additional $1.5 million increase to the stock repurchase, to a total of $8.5 million.

On September 12, 2022, the Board authorized an additional $2.0 million increase to the stock repurchase program, to a total of $10.5 million.

Since inception of the stock repurchase programs, the Company has repurchased 1.1 million shares at an average price per share of $8.25 for a total of $9.1 million.

In February 2021, the Company repurchased 350,000 shares of common stock with an average price per share of $8.50, for a total repurchase of $3.0 million, outside of any stock repurchase or publicly announced program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity