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]

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].

Financial Performance - Revenue for Q3 2024 was $1.9 million, a decrease from $3.1 million in Q3 2023, representing a decline of approximately 39% year-over-year [2]. - Gross profit for Q3 2024 was $0.2 million, down from $1.0 million in Q3 2023, indicating a decrease of about 77% year-over-year [5]. - Net loss for Q3 2024 was $18.6 million, primarily due to a $15 million change in fair value of warrant liabilities, compared to a net loss of $2.1 million in Q3 2023 [2]. Financing and Investments - Agrify secured new convertible note financing of up to $20 million, with an initial draw of $10 million from Green Thumb Industries on November 5, 2024 [2]. - Agrify announced the intent to acquire the Señorita brand of hemp-derived THC drinks on November 12, 2024, marking a strategic expansion into the beverage sector [2]. Assets and Liabilities - Total assets as of September 30, 2024, were $38.95 million, while total current liabilities were $27.77 million, resulting in total equity of $5.46 million [6]. - Cash and cash equivalents stood at $263,000 as of September 30, 2024 [6]. - Inventory, net, was reported at $18.09 million, indicating a significant asset base in product stock [6]. Shareholder Information - The weighted average number of shares outstanding for Q3 2024 was approximately 1.08 million, reflecting the impact of recent reverse stock splits [5]. Strategic Outlook - Agrify's Chairman and Interim CEO Ben Kovler emphasized the company's readiness to capitalize on opportunities in the evolving hemp and cannabis industries [2].

Core Viewpoint - Agrify Corporation reported its financial results for the third quarter of 2024, highlighting significant losses primarily due to changes in warrant liabilities and ongoing strategic developments in the cannabis and hemp industries [2][5]. Financial Performance - Revenue for Q3 2024 was $1.9 million, a decrease from $3.1 million in Q3 2023 [5]. - Gross profit for Q3 2024 was $0.2 million, down from $0.97 million in the same quarter of the previous year [5]. - The net loss for Q3 2024 was $18.6 million, compared to a net loss of $2.1 million in Q3 2023, largely due to a $15 million change in fair value of warrant liabilities [2][5]. - Total expenses for Q3 2024 were $3.9 million, a decrease from $5.6 million in Q3 2023 [5]. - The net loss per share for Q3 2024 was $17.31, compared to $19.02 in Q3 2023 [5]. Recent Developments - Agrify secured new convertible note financing of up to $20 million, with an initial draw of $10 million from Green Thumb Industries on November 5, 2024 [2]. - Ben Kovler was appointed as Chairman and Interim CEO on November 5, 2024 [2]. - The company announced its intent to acquire the Señorita brand of hemp-derived THC drinks on November 12, 2024 [2]. Company Overview - Agrify Corporation specializes in providing innovative solutions for the cannabis and hemp industries, focusing on extraction and cultivation [3]. - The company’s proprietary Vertical Farming Units (VFUs) are designed to enhance product quality, consistency, yield, and return on investment [3].

Industry Overview - The U.S. cannabis market generated over $32 billion in sales in 2023, with projections suggesting it could reach $50 billion by 2028, indicating significant growth potential in the industry [1] - Ongoing legalization efforts and the possibility of federal legalization are driving interest and volatility in marijuana stocks, particularly penny stocks, which can offer high returns but also come with higher risks [1][2] Company Summaries TerrAscend Corp. - TerrAscend Corp. operates primarily in the Northeast U.S., focusing on both medical and recreational cannabis markets, with over 30 dispensaries under various brands, including The Apothecarium [4] - The company reported revenues of $72.1 million, a 10% increase from the previous quarter, with a gross profit of $30.6 million and a gross margin of 42% [5] - Adjusted EBITDA improved to $13.2 million, reflecting a 20% increase compared to the previous quarter, positioning TerrAscend for future growth as cannabis legalization expands [5] Agrify Corporation - Agrify Corporation provides innovative solutions for cannabis cultivation, including vertical farming systems and advanced lighting solutions, aimed at maximizing yields while minimizing costs [6] - The company reported revenues of $19.3 million, a 15% increase from the previous quarter, with a gross profit of $6.8 million and a gross margin of 35% [7] - Despite a net loss of $9.2 million, Agrify's management remains optimistic about future growth as more cultivators adopt its technology [7] High Tide Inc. - High Tide Inc. is a retail-focused cannabis company with a significant presence in Canada and a growing footprint in the U.S., operating over 150 retail locations under the Canna Cabana brand [8] - The company reported revenues of $95.4 million, a 12% increase compared to the same quarter last year, with a gross profit of $32.1 million and a gross margin of 34% [9] - Adjusted EBITDA reached $8.4 million, a 10% increase from the previous quarter, indicating strong financial performance and growth potential in the expanding cannabis market [9]

Core Insights - Agrify Corporation reported a revenue of $3.0 million for Q2 2024, marking a 15% increase from Q1 2024 but a decline from $5.1 million in Q2 2023 [2][4] - Gross profit for Q2 2024 was $1.7 million, up 54.8% from Q1 2024 and significantly higher than $0.6 million in Q2 2023 [2][4] - The operating loss decreased to $1.5 million in Q2 2024 from $5.3 million in Q2 2023, while the net loss improved to $2.8 million from $6.8 million in the same period [2][4] Financial Performance - Revenue for Q2 2024 was $3.0 million compared to $2.6 million in Q1 2024 and $5.1 million in Q2 2023 [2] - Gross profit for Q2 2024 was $1.7 million, an increase from $0.7 million in Q1 2024 and $0.6 million in Q2 2023 [2] - Operating loss for Q2 2024 was $1.5 million, down from $5.3 million in Q2 2023 [2] - Net loss for Q2 2024 was $2.8 million, compared to $6.8 million in Q2 2023 [2] Adjustments and Reassessments - The company reassessed the accounting of a settlement with Mack Molding, resulting in non-cash adjustments that did not affect revenue or cash flows [3] - For the first half of 2024, the company reported an operating income of $1.99 million and a net income of $1.48 million due to these adjustments [3] Management Commentary - The CEO highlighted a cautious industry outlook due to regulatory uncertainties and limited capital availability, despite the positive revenue and gross profit growth [4] - The company is focused on cost reduction and exploring strategic options to enhance shareholder value [4] Balance Sheet Highlights - As of June 30, 2024, cash and cash equivalents were $53,000, a significant decrease from $430,000 at the end of 2023 [9] - Total current liabilities decreased to $25.1 million from $41.2 million at the end of 2023, indicating improved financial management [10] Cash Flow Summary - For the first half of 2024, cash used in operating activities was $4.8 million, compared to $11.6 million in the same period of 2023 [12] - Cash provided by financing activities was $4.1 million in the first half of 2024, contrasting with a cash outflow of $9.9 million in 2023 [12]