Shares of Nexera Technologies Ltd (NASDAQ:NEXR) experienced a dramatic surge on Thursday, rising 54% to $0.8663 in heavy trading volume. The spike came after the company announced that its majority-owned subsidiary, Fort Technology Inc (NASDAQ:FRTT), had signed a non-binding letter of intent (LOI) with Logia USA to explore a potential data-center backup-power deal.
Volume exploded to over 244 million shares, approximately 54 times the average daily volume of 4.51 million shares reported by TipRanks. This surge occurred even as the broader market declined, with the Nasdaq Composite falling 0.67% on the day.
The LOI outlines a proposal for Fort to acquire a 50.1% stake in Logia USA, a private company owned by Yair Harel, who founded Logia Israel. However, the agreement includes milestone-based performance targets that could significantly reduce Fort's ownership to as low as 15% over three years, while Harel's stake could increase to 85%. This potential dilution has raised questions among investors about Nexera's effective ownership in the combined entity.
Financially, Fort has offered a credit facility of up to $2 million, with an option to add another $5 million at its discretion. The deal remains non-binding and subject to further evaluation, due diligence, final agreements, and approval from the TSX Venture Exchange. Nexera cautioned that there is no guarantee the LOI will result in a definitive agreement or any commercial terms.
Despite the positive news for Nexera, Fort's shares fell to $1.14 with only 1.3 million shares traded, highlighting a divergence in investor sentiment between the parent and subsidiary. Analysts suggest that the market's focus may be shifting to Nexera's capital structure and financing activities, rather than solely on the Logia deal.
Nexera's capital stack has seen recent adjustments. A June 22 filing detailed a $2 million convertible note issued for $1.8 million in cash. The note can convert at the lower of $0.734 per share or 88% of the lowest daily volume-weighted average price (VWAP) over the last 20 trading days, with a conversion floor of $0.14680. Additionally, Nexera issued warrants for up to 3,212,336 shares, with some exercise prices now at $0.6226, about 39% below the current stock price.
The resale filing from June 23 also highlighted the potential overhang of up to 16.84 million ordinary shares, though Nexera clarified it will not sell any shares itself under this filing. The heavy trading volume this week suggests active market participation, likely driven by the deal news and the new share supply.
Nexera's intraday high reached $1.10, representing a nearly 96% gain from the previous close before settling back. The company's future hinges on the successful completion of the Logia deal and the ability to navigate its complex capital structure.
