Core Insights - Agrify Corporation has acquired a portfolio of brand intellectual properties from Green Thumb Industries for US$50 million, paid via a convertible note, and will change its name to RYTHM, Inc. with a new Nasdaq ticker symbol "RYM" starting September 2, 2025 [1][6] Group 1: Acquisition Details - The acquired brands include RYTHM, Dogwalkers, Beboe, among others, and Agrify has entered into a licensing agreement allowing Green Thumb Industries to manufacture and distribute these brands [1][6] - This acquisition is seen as a strategic move to enhance Agrify's position in the well-being consumer space, aiming for rapid topline growth through licensing revenue and sales of hemp-derived THC products [2][3] Group 2: Market Position and Future Outlook - The Chairman and Interim CEO of Agrify stated that the demand for THC is increasing as consumers seek alternatives to alcohol, positioning the company favorably for revenue growth in both hemp-derived THC sales and brand licensing [3] - Following the acquisition, the company has approximately 2.0 million shares of common stock outstanding, with warrants for about 7.6 million shares and convertible notes that could equal approximately 6.7 million shares if converted [3]

PART I - FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents the unaudited condensed consolidated financial statements of Agrify Corporation for the period ended June 30, 2025, including balance sheets, statements of operations, changes in stockholders' equity (deficit), and cash flows, reflecting a strategic shift towards hemp-derived products and the discontinuation of cultivation and extraction businesses [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's financial position, including assets, liabilities, and stockholders' equity, as of June 30, 2025, and December 31, 2024 | Assets/Liabilities | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :----------------- | :-------------------------- | :------------------------------ | | **Assets** | | | | Cash and cash equivalents | $40.956 million | $31.170 million | | Accounts receivable, net | $1.572 million | $30 thousand | | Inventory, net | $2.209 million | $500 thousand | | Total current assets | $46.372 million | $34.694 million | | Goodwill | $9.713 million | $9.713 million | | Intangible assets | $13.292 million | $8.900 million | | Total assets | $69.474 million | $54.022 million | | **Liabilities** | | | | Accounts payable | $1.651 million | $825 thousand | | Accrued expenses and other current liabilities | $3.029 million | $4.090 million | | Related party debt, current | $10.000 million | $10.000 million | | Total current liabilities | $17.544 million | $24.679 million | | Related party debt, net of current | $27.000 million | $0 | | Total liabilities | $48.511 million | $25.933 million | | **Stockholders' Equity** | | | | Total stockholders' equity | $20.963 million | $28.089 million | - **Total assets increased** by **$15.45 million** from December 31, 2024, to June 30, 2025, primarily driven by an increase in cash and cash equivalents and intangible assets[9](index=9&type=chunk) - **Total liabilities increased significantly** by **$22.58 million**, mainly due to a substantial increase in non-current related party debt[9](index=9&type=chunk) - **Total stockholders' equity decreased** by **$7.13 million**, indicating a reduction in the company's net worth over the period[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net loss from continuing and discontinued operations for the three and six months ended June 30, 2025 and 2024 | Metric (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $2.042 million | $0 | $2.580 million | $0 | | Gross profit | $682 thousand | $0 | $772 thousand | $0 | | Operating loss from continuing operations | $(6.798) million | $(853) thousand | $(10.499) million | $(500) thousand | | Net (loss) income | $(7.360) million | $(2.972) million | $(8.986) million | $1.264 million | | Basic (loss) income per share | $(3.74) | $(3.16) | $(4.59) | $1.80 | | Diluted (loss) income per share | $(3.74) | $(3.16) | $(4.59) | $1.05 | - The company reported revenue of **$2.042 million** for the three months ended June 30, 2025, and **$2.580 million** for the six months ended June 30, 2025, compared to no revenue from continuing operations in the prior year periods, reflecting a strategic shift[10](index=10&type=chunk) - **Net loss increased significantly** to **$(7.360) million** for the three months ended June 30, 2025, from **$(2.972) million** in the prior year, and to **$(8.986) million** for the six months ended June 30, 2025, from a net income of **$1.264 million** in the prior year[10](index=10&type=chunk) - **Basic and diluted loss per share worsened** to **$(3.74)** for the three months ended June 30, 2025, and **$(4.59)** for the six months ended June 30, 2025, compared to **$(3.16)** and **$1.80** (basic) / **$1.05** (diluted) respectively in the prior year periods[10](index=10&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficit)) This statement outlines changes in common stock, additional paid-in capital, and accumulated deficit for the six months ended June 30, 2025 | Stockholders' Equity (in millions) | Balance at January 1, 2025 | Balance at June 30, 2025 | | :-------------------------------- | :------------------------- | :----------------------- | | Common Stock, Amount | $2 thousand | $2 thousand | | Additional Paid-In Capital | $335.400 million | $337.490 million | | Accumulated Deficit | $(307.543) million | $(316.529) million | | Total Stockholders' Equity attributable to Agrify | $27.859 million | $20.963 million | - **Total stockholders' equity attributable to Agrify Corporation decreased** from **$27.859 million** at January 1, 2025, to **$20.963 million** at June 30, 2025, primarily due to a net loss of **$(8.986) million**[12](index=12&type=chunk)[13](index=13&type=chunk) - **Additional paid-in capital increased** by **$2.09 million**, driven by stock-based compensation and the issuance of pre-funded warrants in lieu of cash interest payments on related party debt[12](index=12&type=chunk)[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity (in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(15.138) million | $(4.816) million | | Net cash used in investing activities | $(5.075) million | $336 thousand | | Net cash provided by financing activities | $29.999 million | $4.103 million | | Net increase (decrease) in cash and cash equivalents | $9.786 million | $(377) thousand | | Cash and cash equivalents at the end of period | $40.956 million | $53 thousand | - **Net cash used in operating activities significantly increased** to **$(15.138) million** for the six months ended June 30, 2025, from **$(4.816) million** in the prior year, primarily due to a higher net loss and changes in operating assets and liabilities[14](index=14&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - **Net cash used in investing activities was** **$(5.075) million**, mainly due to the related party acquisition of MC Brands, a shift from the prior year's net cash provided by investing activities of **$336 thousand**[14](index=14&type=chunk)[204](index=204&type=chunk) - **Net cash provided by financing activities increased substantially** to **$29.999 million**, driven by proceeds from the May 2025 Notes, compared to **$4.103 million** in the prior year[14](index=14&type=chunk)[205](index=205&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of Agrify's accounting policies, financial statement line items, and significant transactions [Note 1 — Overview, Basis of Presentation and Significant Accounting Policies](index=9&type=section&id=Note%201%20%E2%80%94%20Overview,%20Basis%20of%20Presentation%20and%20Significant%20

Product Offerings - Agrify's Señorita brand offers three hemp-derived THC beverage flavors, with plans to introduce a fourth flavor, low-calorie Ranch Water, in 2025[135] - The Señorita beverages are available at top retailers in ten U.S. states and Canada, with future expansion plans into premier on-premises destinations[129] - The Señorita brand was acquired in November 2024, reflecting a growing demand for adult beverage alternatives[134] Financial Performance - Revenue for the three months ended March 31, 2025, was $538 thousand, an increase from $0 in the same period in 2024, primarily due to the acquisition of Señorita[157] - Cost of goods sold for the same period was $448 thousand, reflecting an increase of $448 thousand compared to $0 in 2024, associated with the acquisition of Señorita[158] - Gross profit was $90 thousand, representing 16.7% of total revenue for the three months ended March 31, 2025[159] - Selling, general and administrative expenses increased by $2.2 million, or 144%, to $3.791 million for the three months ended March 31, 2025, primarily due to the acquisition of Señorita[161] - Research and development expenses decreased by $275 thousand, or 100%, to $0 for the three months ended March 31, 2025, due to the discontinuation of the Extraction Business[162] - Net cash used in operating activities was $(6.720) million for the three months ended March 31, 2025, compared to $(2.987) million in 2024[170] - The net loss attributable to Agrify Corporation for the three months ended March 31, 2025, was $(1.626) million, compared to a net income of $4.236 million in 2024[156] - The weighted average common shares outstanding for basic shares was 1,952,022 for the three months ended March 31, 2025, compared to 460,133 in 2024[156] Corporate Changes - Agrify's extraction business was disposed of on March 30, 2025, and the cultivation solutions were sold prior to December 31, 2024[130][136] - The company underwent a 1-for-20 reverse stock split on July 5, 2023, followed by a 1-for-15 reverse stock split on October 8, 2024[132] - Brad Asher was appointed as Chief Financial Officer effective March 24, 2025, under a Shared Services Agreement with Vision Management Services, LLC[133] Technology and Strategy - Agrify's proprietary VFU technology was designed for indoor vertical farming, enabling higher-quality crop production[137] - The company strategically acquired four top brands in the extraction space in late 2021 and early 2022, enhancing its extraction solutions portfolio[140] Cash and Financing - As of March 31, 2025, the company had cash and cash equivalents totaling $24.4 million to support revenue growth and manage inventory[167] - The Green Thumb Convertible Note issued on November 5, 2024, allows for advances of up to $20 million, with $10 million already advanced[169] Accounting and Reporting - Agrify's financial statements are prepared in accordance with U.S. GAAP, requiring management to make estimates and assumptions affecting reported amounts[142] - Revenue is generated from the sale of hemp-derived beverages, recognized under ASC Topic 606 through a five-step model[146]

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 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 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 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]