Financial Performance and Position - The company reported approximately $31.2 million in cash and cash equivalents as of December 31, 2024[68]. - The company has experienced a revenue decrease in 2023 and 2024 after significant growth in 2021 and 2022[66]. - The company has substantial debt obligations, and failure to meet these could harm its financial condition[75]. - The company may require additional financing to support operations and growth, with potential impacts on product development and manufacturing[68]. - The company has identified material weaknesses in internal control over financial reporting, which could impact investor confidence and stock price[151]. - Stockholders' equity reported at $(17.17) million led to noncompliance with Nasdaq Listing Rule 5550(b)(1), requiring a minimum of $2.5 million in stockholders' equity[231]. Business Operations and Strategy - The company has discontinued its Cultivation business and entered a new line of business following the acquisition of Señorita[66]. - Agrify has never paid cash dividends and intends to retain future earnings to fund business development and growth[182]. - The company is committing significant resources to develop and market both existing and new products, which are relatively untested in the marketplace, posing risks to market acceptance and financial condition[104]. - The company is exploring alternatives for its extraction business following the increased focus on hemp-derived beverages[213]. - The company faces risks related to market acceptance of its products and competition in the cannabis and hemp sectors[68]. Regulatory and Legal Risks - The company faces significant regulatory risks as the 2018 Farm Bill is set to expire on September 30, 2025, which could impact the legality of hemp-derived THC products[51]. - Regulatory changes could limit the company's ability to utilize its net operating losses, potentially increasing future tax liabilities[97]. - The company is subject to a complex regulatory environment, with state laws creating a patchwork of regulations that could impact its ability to sell products[107]. - The FDA has not evaluated THC for safety in foods and beverages, and its position could lead to increased enforcement actions that may materially impact operations and revenue[108]. - The company faces reputational risks that could affect its business relationships due to its cannabis-related activities[116]. Market and Competitive Landscape - Agrify's competitive landscape includes competition from larger companies and the illicit market, which may affect its market position[52][54]. - The company faces competition from both the illicit market and larger competitors, which could hinder its ability to compete effectively in the cannabis industry[117]. - Inconsistent public opinion regarding cannabis and hemp may hinder market growth and adversely affect the company's business plans and financial condition[120]. - The cannabis and hemp industries may face strong opposition from established businesses in other sectors, which could negatively impact operations[128]. Acquisitions and Business Development - Agrify acquired the Señorita brand of hemp-derived THC beverages on December 12, 2024, which includes three flavors and plans for a fourth flavor debuting in 2025[37][43]. - The company sold its cultivation business, including Agrify Vertical Farming Units and Agrify Insights software, for approximately $7 million in secured indebtedness on December 31, 2024[35]. - The company completed the acquisition of the Señorita brand of hemp-derived beverages, which includes three award-winning flavors and is available in nine U.S. states and Canada[204][210]. - The company may pursue strategic acquisitions, which could involve financial and operational risks[70]. Human Resources and Management - As of March 15, 2025, Agrify had a total of 11 full-time employees, relying on a shared services agreement with Green Thumb for human capital needs[56]. - The company's growth is heavily reliant on the contributions of key personnel, including its Chairman and Interim CEO, which poses a risk if they are unable to continue[86]. - Agrify's ability to attract and retain qualified individuals for its board and executive positions may be hindered by increased costs of liability insurance[165]. Financial Instruments and Capital Structure - Agrify raised approximately $25.9 million in a private placement on November 20, 2024, issuing 203,988 shares of common stock and pre-funded warrants for 949,515 shares at a price of $22.30 per share[38]. - The company issued a secured Note to an investor for up to $20.0 million, with $10.0 million loaned to date, maturing on November 5, 2025, at an interest rate of 10% per annum[75]. - A total of 7.6 million warrants were issued and outstanding as of March 17, 2025, which could lead to dilution of existing shares[140]. - The company executed a 1-for-20 reverse stock split on July 5, 2023, and a 1-for-15 reverse stock split on October 8, 2024, with all share information adjusted retroactively[191][192]. Risks and Challenges - The company faces inherent risks related to product liability claims, which could adversely affect its reputation and financial condition[84]. - Product recalls could lead to significant unexpected expenses and loss of sales, impacting the company's operations and financial results[85]. - Dependence on third-party providers for essential services could disrupt operations if there are failures in service delivery[87]. - The company may face disruptions in its supply chain if co-manufacturers fail to comply with safety and regulatory standards[98]. - Unanticipated expenses and technical difficulties may arise, potentially delaying operations and harming the company's financial stability[127]. Intellectual Property and Cybersecurity - The company is actively seeking to protect its intellectual property, but challenges in enforcement could adversely affect its competitive position[88]. - The company may face significant legal and financial exposure due to cybersecurity threats, although past incidents have not materially affected its operations[172][167]. - The company has implemented a risk-based approach to cybersecurity, integrating practices into its overall risk management program[171][174].

Service Fees and Payments - The Service Provider will charge a maximum Service Fee of $1,000,000 per one-year term[10] - Service Fees will be calculated based on direct and indirect costs incurred by the Service Provider, multiplied by the applicable percentage mark-up as detailed in the Fee Document[9] - The Service Provider must submit a statement of amounts payable within twenty (20) calendar days after the end of each quarter[11] - The total monthly service fees for the service recipient amount to $72,552[45] Agreement Terms - The term of the Agreement is one (1) year, automatically renewing for successive one-year terms unless canceled in writing[19] - The Agreement allows for periodic review and amendment of the services provided, with changes agreed upon by both parties[5] - The Agreement is governed by the laws of the State of Delaware[28] Indemnification and Liability - The Service Recipients must indemnify the Service Provider against any losses incurred due to the Service Provider's performance or non-performance, except in cases of gross negligence[17] Service Provider Operations - The Service Provider may perform services through its own employees or designated third parties, passing through third-party costs with no markup[8] - The Service Provider is authorized to enter into agreements on behalf of the Service Recipients for necessary financial and legal services[34] - The Service Provider must make its books and records available for inspection by the Service Recipients upon reasonable notice[14] Financial Oversight - The CFO of Agrify will oversee financial forecasting, reporting, budgeting, audit, and long-term financial planning[40] - Agrify aims to enhance financial systems and controls to improve overall operation and effectiveness[42]

Core Viewpoint - Agrify Corporation reported its financial results for the fourth quarter and fiscal year 2024, highlighting a focus on growth in the cannabis and hemp industries, particularly through its Señorita brand of THC beverages [1][3]. Financial Results Summary - Revenue for the fourth quarter of 2024 was $2.3 million, a decrease from $15.1 million in fiscal year 2023, resulting in total revenue of $9.7 million for fiscal year 2024 [5][8]. - The company recorded an operating loss from continuing operations of $10.2 million for fiscal year 2024, compared to a loss of $13.0 million in fiscal year 2023 [5][10]. - The net loss attributable to Agrify Corporation for fiscal year 2024 was $41.7 million, compared to a net loss of $18.6 million in fiscal year 2023 [10]. Recent Developments - Agrify appointed Brad Asher as Chief Financial Officer, effective March 24, 2025, to strengthen its financial leadership during a critical growth phase [3][4]. - The company secured new financing of up to $20 million and raised approximately $25.9 million in a private placement to support future growth opportunities [5][8]. - Agrify completed an asset purchase agreement for the acquisition of Double or Nothing LLC and its Señorita brand, expanding its product offerings in the hemp-derived THC beverage market [5][8]. Product and Market Position - The Señorita brand offers a range of hemp-derived THC beverages, including low-sugar, low-calorie options, available in nine U.S. states and Canada, with plans for further expansion [6][8]. - Agrify aims to leverage its strong balance sheet and market position to capitalize on the growing THC market in America [3][4].

Core Points - Agrify Corporation announced the appointment of Peter Shapiro and Sanjay Tolia to its Board of Directors, effective January 31, 2025, following the departure of Richard Drexler [1][2][3] Group 1: Board Appointments - Peter Shapiro brings extensive experience as an independent music entrepreneur and has been recognized on Billboard's Power 100 List for his influence in the music business [2][3] - Sanjay Tolia is a co-founder of Marine Layer Advisors and Bengal Capital, with a strong background in institutional finance and a focus on the cannabis industry for over a decade [3][4] Group 2: Company Vision and Strategy - The company aims to shape the future of THC consumption in America by prioritizing consumer well-being and expanding access to its products [2][3] - Agrify's Señorita brand offers hemp-derived THC beverages that provide low-sugar, low-calorie alternatives to alcoholic drinks, available in various U.S. states and Canada [4]

Core Insights - Agrify Corporation has partnered exclusively with The Salt Shed to offer hemp-derived THC (HD9) beverages, marking a significant milestone as the first HD9 drink served at the venue [1][2][3] - The award-winning THC Margarita beverage, Señorita, will be available for purchase starting January 11, 2025, and will be offered year-round at all Salt Shed shows [1][2] - The Salt Shed expects to host over 600,000 music fans across 145 shows in 2025, indicating a substantial market opportunity for Agrify's products [2][3] Agrify's Product Offering - Señorita is available in multiple flavors, including Mango Margarita (5mg), Lime Jalapeño Margarita, Paloma, and Ranch Water, catering to the growing demand for non-alcoholic alternatives [2][3] - Agrify's products are Farm Bill compliant, produced in certified cGMP facilities, and feature transparent labeling with ingredient information and QR codes linking to independent lab analysis [3] Market Context - There is a rising consumer demand for accessible alternatives to alcohol, particularly in live music venues, which aligns with Agrify's strategy to introduce cannabis-infused beverages in such settings [3] - The partnership with The Salt Shed is seen as a strategic move to enhance consumer choice and create unique experiences for concertgoers, thereby driving engagement and sales [3][6]

Core Insights - Agrify Corporation has become the exclusive partner for hemp-derived THC beverages at the Salt Shed, a prominent music venue in Chicago, with the launch of its Señorita THC Margarita beverage [1][2][3] - The Salt Shed expects to host over 600,000 music fans across 145 shows in 2025, indicating a significant market opportunity for Agrify's products [2][6] Agrify Corporation - Agrify specializes in branded innovative solutions for the cannabis and hemp industries, with its Señorita brand offering HD9 beverages that are low-sugar and low-calorie alternatives to alcoholic drinks [5] - The Señorita beverage will be available year-round at the Salt Shed and is compliant with the Farm Bill, manufactured in certified cGMP facilities, ensuring quality and transparency [3][5] The Salt Shed Venue - The Salt Shed is a state-of-the-art music venue located in Chicago, recognized as the Best New Venue by Pollstar and Billboard, and is operated by 16" On Center [6] - The venue features both indoor and outdoor stages and aims to provide unique viewing experiences, enhancing consumer choice in the entertainment space [3][6]

Core Insights - Agrify Corporation has completed the sale of its cultivation business to CP Acquisitions, LLC, simplifying its business model and balance sheet [1][2][3] - The transaction includes the sale of all assets related to Agrify's cultivation business, including Vertical Farming Units, turnkey solution assets, and software solutions [2] - The company aims to focus on growth categories tied to THC demand, particularly hemp-derived THC Delta 9 beverages, including its award-winning Señorita THC Margarita [3][4] Transaction Details - The sale agreement was signed and closed on December 31, 2024, with CP acquiring all cultivation-related assets and assuming liabilities [2] - The transaction also involves the termination of two convertible notes held by CP, totaling approximately $7 million [1] Future Focus - The company plans to concentrate on its Señorita brand, which offers low-calorie, alcohol alternative beverages, and aims for expansion in the market [3][4] - The separation of business segments is expected to allow both Agrify and CP to better focus their efforts moving forward [3]

TROY, Mich., Dec. 16, 2024 (GLOBE NEWSWIRE) -- Agrify Corporation (NASDAQ:AGFY) ("Agrify" or the "Company"), a leading provider of branded innovative solutions for the cannabis and hemp industries, has closed on its previously announced acquisition of certain assets from Double or Nothing LLC, the owner and creator of the Señorita brand of hemp-derived THC ("HD9") drinks. "This is great news for Agrify shareholders! We believe Señorita is the best tasting drink in the fastest growing, most exciting beverage ...

Core Viewpoint - Agrify Corporation has successfully raised approximately $25.9 million through a non-brokered private placement priced at $22.30 per share, aimed at supporting general corporate purposes including working capital and business development [1][2]. Group 1: Financial Details - The private placement is expected to close on November 21, 2024, pending customary closing conditions [1]. - Benjamin Kovler, Chairman and Interim CEO, participated in the private placement by purchasing 10,000 shares at a price of $38.76 [1]. - Investors will receive pre-funded warrants if their beneficial ownership exceeds 4.99% post-offering [2]. Group 2: Strategic Intent - The capital raised will be allocated to opportunities within Agrify's expertise to benefit shareholders, with a focus on current consumer trends in the cannabis and hemp sectors [2]. - The company is working towards closing the previously announced Señorita transaction, which is on track for completion around year-end [2]. Group 3: Company Overview - Agrify Corporation specializes in developing innovative solutions for the cannabis and hemp industries, including extraction and cultivation technologies [4]. - The company’s proprietary Vertical Farming Units (VFUs) allow cultivators to produce high-quality products with consistent yield and return on investment [4].

Financial Performance - Revenue for the three months ended September 30, 2024, was $1,934,000, a decrease of $1,205,000 or 38% compared to $3,139,000 for the same period in 2023 [274]. - Revenue for the nine months ended September 30, 2024, was $7,526,000, a decrease of $6,483,000 or 46% compared to $14,009,000 for the same period in 2023 [274]. - Cost of goods sold for the three months ended September 30, 2024, was $1,709,000, a decrease of $456,000 or 21% compared to $2,165,000 for the same period in 2023 [280]. - Cost of goods sold for the nine months ended September 30, 2024, was $6,009,000, a decrease of $5,438,000 or 48% compared to $11,447,000 for the same period in 2023 [280]. - Gross profit for the three months ended September 30, 2024, was $225,000, compared to $974,000 for the same period in 2023 [274]. - Gross profit for the nine months ended September 30, 2024, was $1,517,000, compared to $2,562,000 for the same period in 2023 [274]. - Net loss for the three months ended September 30, 2024, was $18,651,000, compared to a net loss of $2,092,000 for the same period in 2023 [274]. - Net loss for the nine months ended September 30, 2024, was $17,387,000, compared to a net loss of $19,226,000 for the same period in 2023 [274]. - The extraction solutions revenue decreased by $1,164,000 or 35% for the three months ended September 30, 2024, compared to the same period in 2023 [278]. Cost Management - General and administrative expenses decreased by $1.0 million, or 22%, for Q3 2024 compared to Q3 2023, and by $6.3 million, or 39%, for the nine months ended September 30, 2024 [285]. - Research and development expenses decreased by $0.3 million, or 65%, for Q3 2024 compared to Q3 2023, and by $1.2 million, or 66%, for the nine months ended September 30, 2024 [288]. - Selling and marketing expenses decreased by $0.5 million, or 57%, for Q3 2024 compared to Q3 2023, and by $2.3 million, or 66%, for the nine months ended September 30, 2024 [290]. - Interest expense decreased by $0.3 million, or 90%, for Q3 2024 compared to Q3 2023, and by $1.4 million, or 89%, for the nine months ended September 30, 2024 [292]. Capital and Financing Activities - Agrify raised approximately $2.2 million from a public offering of 2,760,000 shares of Common Stock at a price of $0.38 per share, which closed on February 28, 2024 [226]. - The company entered into a Purchase Agreement with Ionic to sell up to $15.0 million of Common Stock over a 36-month term, allowing for purchases between $250,000 and $750,000 on business days [232]. - The company issued a 2024 CP Note to CP Acquisitions for up to $1,500,000 at a 10% annual interest rate, maturing on July 1, 2025, with a conversion price of $3.9495 [234]. - The maximum principal of the 2024 CP Note was increased to $3,000,000 while maintaining the conversion price of $3.9495 [238]. - The company issued a Secured Convertible Note (Green Thumb Note) for up to $20.0 million, with $10.0 million advanced upon issuance, maturing on November 5, 2025, at a 10% interest rate [239]. - The maximum principal amount of the Junior Secured Note was increased to $4.0 million, with a maturity date extended to December 31, 2024 [299]. - The Company entered into the Restated GIC Note, increasing the principal amount to approximately $2.29 million and extending the maturity date to December 31, 2025 [304]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $6.25 million, a decrease from $25.94 million in the same period of 2023 [309]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $5.7 million, primarily from related party notes and Common Stock issuance [313]. Strategic Initiatives - Agrify's strategic plan for 2023 focuses on sustainable long-term growth through cost efficiencies and enhanced sales initiatives, particularly in the cultivation business [221]. - The company aims to provide a variety of products for indoor agriculture, including cultivation solutions and Agrify Insights™ software [275]. - The company has made significant progress in obtaining Underwriters Laboratories Compliance for its extraction facilities, emphasizing its commitment to safety and quality [222]. Compliance and Governance - Agrify received a deficiency letter from Nasdaq regarding its stock price falling below $1.00 per share, but regained compliance after a 1-for-15 reverse stock split on October 8, 2024 [224]. - The company appointed GuzmanGray as its independent registered public accounting firm after the resignation of Matsuura, effective June 25, 2024 [231]. - Agrify's stockholders approved amendments to the Pre-Funded Warrants, adjusting the exercise price and change of control thresholds, enhancing the terms for investors [230]. Accounting and Reporting - The company recognizes revenue from equipment sales, services, and construction contracts, following a five-step model under ASC Topic 606 [249]. - The company accounts for warrants based on their specific terms, determining whether they are classified as equity or liabilities [245]. - The company provides a one-year warranty on products, accruing for warranty returns when losses are probable and estimable [264]. - The company accounts for income taxes under ASC Topic 740, recognizing deferred tax assets and liabilities for temporary differences [265]. - The Company’s critical accounting estimates include fair value assessments and revenue recognition, which may significantly impact financial results [316][317].