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]

Core Viewpoint - Agrify Corporation has successfully completed the acquisition of certain assets from Double or Nothing LLC, which includes the Señorita brand of hemp-derived THC drinks, positioning the company to capitalize on the growing cannabis beverage market [1][5]. Group 1: Acquisition Details - The acquisition involved the exchange of 530,000 shares of Agrify common stock or equivalents, resulting in approximately 2.0 million common shares outstanding and 7.6 million warrants post-transaction [5]. - The assets acquired are primarily focused on the production and distribution of Señorita HD9 beverages, which are gaining popularity in the cannabis beverage sector [1][5]. Group 2: Product and Market Potential - Señorita is recognized for its innovative approach to adult beverages, offering THC-infused drinks that provide a hangover-free alternative to alcohol, appealing to a growing generational demand for such products [2][3]. - The brand currently offers two flavors, with plans to launch a third flavor, Paloma, in January 2025, and a fourth flavor, low-calorie Ranch Water, later in 2025 [3]. - Señorita products are available at major retailers across nine U.S. states and Canada, with direct-to-consumer sales where permitted, indicating a robust distribution strategy [4][7]. Group 3: Leadership and Vision - Agrify's leadership, including Chairman and Interim CEO Ben Kovler, expresses strong enthusiasm for the Señorita brand and its potential for innovation and product development [2][3]. - Co-founders of Señorita, Charles Bieler and Joel Gott, emphasize their commitment to rapid growth and expanding distribution, aligning with Agrify's strategic goals [3].

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].