Group 1 - Agrify (NASDAQ:AGFY) stock is experiencing significant movement due to updates on share ownership, particularly the transfer of a convertible senior note to CP Acquisitions, which allows conversion into AGFY shares [1] - CP Acquisitions, controlled by Agrify's president and CEO Raymond Nobu Chang, holds a total of securities equivalent to a 49.99% stake in the company, with a limit preventing ownership from exceeding this percentage [1] - Other entities, including M Zion Capital, LLC, M Olivet Capital, LLC, and M Cannan Capital, LLC, also hold shares of AGFY stock, contributing to the overall 49.99% stake held by CP Acquisitions [1] Group 2 - The news has led to heavy trading activity, with over 13 million shares of AGFY changing hands, significantly above the daily average of approximately 1.4 million shares [2] - As of Tuesday morning, AGFY stock has increased by 60.6% [2]

Core Insights - The industrials sector is currently experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1] Agrify Corporation (AGFY) - Agrify announced a sales agreement with a California-based cannabis operator for its Hydrocarbon Extraction Lab facility, indicating confidence in its technology [2] - The stock has fallen approximately 33% over the past five days, reaching a 52-week low of $0.5710 [2] - The RSI value for Agrify is reported at 25.88, with shares closing at $0.6050 after a 6.6% decline [2] SES AI Corporation (SES) - SES AI reported a narrower-than-expected third-quarter loss and is nearing a significant milestone in transitioning to B samples for Li-Metal batteries [3] - The stock has decreased around 18% in the last five days, with a 52-week low of $1.20 [3] - The RSI value for SES is 28.63, with shares closing at $1.23 after a 1.7% gain [3] Spirit Airlines, Inc. (SAVE) - JetBlue Airways disclosed challenges in complying with provisions of a $3.8 billion merger deal, impacting Spirit Airlines' stock performance [4] - The stock has dropped approximately 62% over the past month, reaching a 52-week low of $4.04 [4] - The RSI value for Spirit Airlines is 25.99, with shares closing at $6.25 after a 13.4% decline [4]

Industry Overview - The cannabis industry is experiencing a shift from short-term investing to mid to long-term holds, with expectations for growth in 2024 due to potential cannabis reform discussions during the election year [1][2] - Legal cannabis is generating significant revenue, making it an attractive investment opportunity [1] Company Highlights - **Innovative Industrial Properties, Inc.**: This company focuses on acquiring and managing properties leased to licensed cannabis operators. It declared a Q4 2023 dividend of $1.82 per share, totaling $7.22 for the year, marking an annual increase since its inception in 2016 [3] - **NewLake Capital Partners, Inc.**: This real estate investment trust provides capital to cannabis operators through sale-leaseback transactions. It increased its Q4 2023 dividend to $0.40 per share, equivalent to an annualized dividend of $1.60, payable on January 12, 2024 [4][5] - **AFC Gamma, Inc.**: This company specializes in providing secured loans to cannabis businesses. It declared a quarterly dividend of $0.48 for Q4 2023, consistent with the previous quarter, payable on January 12, 2024 [6][8]

TROY, Mich., Jan. 25, 2024 (GLOBE NEWSWIRE) -- Agrify Corporation (NASDAQ:AGFY) ("Agrify" or the "Company"), a leading provider of innovative cultivation and extraction solutions for the cannabis industry, today announced that the shareholders of the Company approved an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of the Company's common stock from 10,000,000 to 35,000,000 (the "Charter Amendment"), that all its outstanding debt held by CP Acquisitions LLC ...

TROY, Mich., Jan. 18, 2024 (GLOBE NEWSWIRE) -- Agrify Corporation (NASDAQ:AGFY) ("Agrify" or the "Company"), a leading provider of innovative cultivation and extraction solutions for the cannabis industry, today announced it has entered into a multi-million dollar sales agreement ("the Agreement") with Ocean Deep/Golden Lake Business Park, a California-based vertically integrated cannabis operator. Ocean Deep will be extracting products with Agrify's turnkey PX30 Hydrocarbon Extraction Lab Package to bolste ...

Core Points - Agrify Corporation held its Annual Meeting of Stockholders on January 8, 2024, where all business items were considered except for the proposal to increase authorized shares [1] - Approximately 50.6% of the outstanding shares were represented at the meeting, indicating a quorum [1] - The Authorized Share Proposal requires a majority vote and was supported by approximately 45.4% of the outstanding shares as of the record date [2] - The meeting was adjourned until January 22, 2024, to allow for further voting on the Authorized Share Proposal [2] Voting Results - Shareholders can attend the reconvened meeting virtually on January 22, 2024, at 10:00 a.m. Eastern Time [3] - Shareholders who have already submitted their proxy do not need to resubmit, and the record date remains December 6, 2023 [3] - The company encourages shareholders who have not yet voted to do so by January 21, 2024 [4] Additional Proposals - Director nominees were re-elected, and one new director was elected, bringing the total to six directors [6] - Marcum LLP was ratified as Agrify's independent registered public accounting firm for 2023 with over 94.9% of votes in favor [6] - A proposal to increase the number of shares underlying a warrant passed with 96.5% support [6] - An amendment to the Senior Secured Convertible Note held by CP Acquisitions LLC passed with 92.1% support [8] - An amendment to the Agrify Corporation 2022 Omnibus Equity Incentive Plan passed with 97.0% support [8] - A proposal to adjourn the meeting for additional proxy solicitation passed with 95.8% support [8] Company Overview - Agrify is a provider of innovative cultivation and extraction solutions for the cannabis industry, focusing on data, science, and technology [9] - The company offers micro-environment-controlled Vertical Farming Units (VFUs) to enhance product quality and yield [9] - Agrify's extraction product line includes various methods to maximize the quality and quantity of cannabis extracts [9]

The Best Marijuana Stocks For Investors?Starting the new year marijuana stock investors are looking for more ways to take profits. If you have been following the cannabis sector specifically the publicly traded side then you know how volatility has left most marijuana stocks. That’s the thing volatility can be an advantage to investing but it can also lead to issues. So for instance when there is a volatile decline a recovery can take a while. Yet when there is recovery due to how volatile trading can get r ...

TROY, Mich., Jan. 03, 2024 (GLOBE NEWSWIRE) -- Agrify Corporation (NASDAQ:AGFY) ("Agrify" or the "Company"), a leading provider of innovative cultivation and extraction solutions for the cannabis industry, today announced financial results for the third quarter ended September 30, 2023 ("Q3 2023"). "In the third quarter, we successfully negotiated with several vendors, resulting in approximately $1.1 million in reduced payments, exited additional leased properties and conducted several fixed asset sales to ...

PART I - FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for Agrify Corporation [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $43,065 | $69,687 | | Total Current Assets | $21,205 | $44,893 | | Cash and cash equivalents | $154 | $10,457 | | Restricted cash | $— | $10,000 | | Inventory, net | $17,724 | $21,396 | | Total Liabilities | $64,306 | $78,728 | | Total Current Liabilities | $41,372 | $70,602 | | Long-term debt, current | $1,140 | $28,833 | | Total Stockholders' Deficit | $(21,474) | $(9,272) | - Total assets decreased by approximately **$26.6 million** from December 31, 2022, to September 30, 2023, primarily driven by a significant reduction in cash and cash equivalents and restricted cash[11](index=11&type=chunk) - Total liabilities decreased by approximately **$14.4 million**, with a notable reduction in current long-term debt[11](index=11&type=chunk) - Stockholders' deficit worsened from **$(9.3) million** to **$(21.5) million**, indicating a further erosion of equity[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, unaudited) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $3,139 | $7,019 | $14,009 | $52,369 | | Cost of goods sold | $2,165 | $11,135 | $11,447 | $50,703 | | Gross profit (loss) | $974 | $(4,116) | $2,562 | $1,666 | | Loss from operations | $(4,578) | $(31,547) | $(17,506) | $(132,843) | | Net loss attributable to Agrify Corporation | $(2,092) | $(57,413) | $(19,224) | $(130,235) | | Net loss per share (basic and diluted) | $(1.27) | $(429.98) | $(13.48) | $(1,003.10) | - Revenue significantly decreased by **55%** for the three months and **73%** for the nine months ended September 30, 2023, compared to the same periods in 2022[13](index=13&type=chunk) - Gross profit improved from a loss of **$4.1 million** to a profit of **$1.0 million** for the three months ended September 30, 2023, and from $1.7 million to $2.6 million for the nine months, despite lower revenue, due to a larger decrease in cost of goods sold[13](index=13&type=chunk) - Net loss attributable to Agrify Corporation substantially decreased from **$(57.4) million** to **$(2.1) million** for the three months and from **$(130.2) million** to **$(19.2) million** for the nine months ended September 30, 2023, primarily due to reduced operating expenses and changes in fair value of warrant liabilities[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Condensed Consolidated Statements of Stockholders' Equity (Deficit) (in thousands) | Metric | Balance at Jan 1, 2023 | Balance at Sep 30, 2023 | | :--- | :--- | :--- | | Common Stock (shares) | 1,038,298 | 1,651,281 | | Common Stock (amount) | $1 | $2 | | Additional Paid-in Capital | $237,875 | $244,898 | | Accumulated Deficit | $(247,148) | $(266,374) | | Total Stockholders' Deficit attributable to Agrify | $(9,272) | $(21,474) | - The Company's accumulated deficit increased from **$(247.1) million** at January 1, 2023, to **$(266.4) million** at September 30, 2023, reflecting ongoing net losses[18](index=18&type=chunk) - Common Stock shares outstanding increased from **1,038,298** to **1,651,281**, primarily due to issuances through an "at the market" offering, conversion of notes, and employee stock purchase plan shares[18](index=18&type=chunk) - Additional paid-in capital increased by **$7.0 million**, driven by stock-based compensation and proceeds from equity offerings and conversions[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands, unaudited) | Cash Flow Activity | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(25,940) | $(58,020) | | Net cash provided by (used in) investing activities | $25,235 | $(4,135) | | Net cash used in financing activities | $(9,598) | $52,292 | | Net decrease in cash and cash equivalents | $(10,303) | $(9,863) | | Cash and cash equivalents at end of period | $154 | $2,151 | - Net cash used in operating activities significantly decreased from **$(58.0) million** in 2022 to **$(25.9) million** in 2023, primarily due to reduced net loss and favorable changes in operating assets and liabilities[21](index=21&type=chunk)[422](index=422&type=chunk) - Investing activities shifted from a net cash outflow of **$(4.1) million** in 2022 to a net inflow of **$25.2 million** in 2023, driven by proceeds from the sale of securities and repayment of loans receivable[21](index=21&type=chunk)[424](index=424&type=chunk) - Financing activities resulted in a net cash outflow of **$(9.6) million** in 2023, a substantial change from the **$52.3 million** inflow in 2022, mainly due to debt repayments offsetting proceeds from equity programs[21](index=21&type=chunk)[427](index=427&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 — Overview, Basis of Presentation and Significant Accounting Policies](index=10&type=section&id=Note%201%20%E2%80%94%20Overview%2C%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) - Agrify Corporation is a leading provider of innovative cultivation and extraction solutions for the cannabis industry, offering proprietary micro-environment-controlled Vertical Farming Units (VFUs) and a comprehensive extraction product line[25](index=25&type=chunk) - The Company effected two reverse stock splits: **1-for-10** on October 18, 2022, and **1-for-20** on July 5, 2023, retroactively adjusting all share and per share information[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The Company received multiple Nasdaq deficiency notices for failing to meet the minimum bid price requirement and for late filings of its 10-K and 10-Q reports, leading to a Staff Delisting Determination and a scheduled hearing[34](index=34&type=chunk)[35](index=35&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - Management has evaluated conditions that raise substantial doubt about the Company's ability to continue as a going concern within one year, citing operating losses, negative cash flows, a working capital deficiency, and an accumulated deficit of **$266 million** as of September 30, 2023[49](index=49&type=chunk)[50](index=50&type=chunk) - Revenue is recognized using a five-step model, disaggregated into equipment sales, services, and construction contracts, with significant judgments required for identifying distinct performance obligations and determining standalone selling prices[98](index=98&type=chunk)[99](index=99&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) [Note 2 — Revenue and Deferred Revenue](index=23&type=section&id=Note%202%20%E2%80%94%20Revenue%20and%20Deferred%20Revenue) Revenue Disaggregation (in thousands) | Timing of Recognition | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Transferred at a point in time | $2,831 | $5,657 | $12,384 | $28,675 | | Transferred over time | $308 | $1,362 | $1,625 | $23,694 | | Total Revenue | $3,139 | $7,019 | $14,009 | $52,369 | Deferred Revenue Changes (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Deferred revenue – beginning of period | $4,112 | $3,772 | | Additions | $3,685 | $13,392 | | Recognized | $(3,718) | $(13,052) | | Deferred revenue – end of period | $4,079 | $4,112 | - The majority of revenue is recognized at a point in time, accounting for **$2.8 million (90%)** and **$12.4 million (88%)** of total revenue for the three and nine months ended September 30, 2023, respectively[135](index=135&type=chunk) - Deferred revenue balances, primarily from customer deposits on cultivation and extraction equipment, remained relatively stable at **$4.1 million** as of September 30, 2023, and December 31, 2022[137](index=137&type=chunk) [Note 3 — Supplemental Consolidated Balance Sheet Information](index=24&type=section&id=Note%203%20%E2%80%94%20Supplemental%20Consolidated%20Balance%20Sheet%20Information) Accounts Receivable, Net (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Accounts receivable, gross | $3,722 | $5,675 | | Less allowance for credit losses | $(2,535) | $(4,605) | | Accounts receivable, net | $1,187 | $1,070 | Property and Equipment, Net (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total property and equipment, gross | $8,137 | $4,973 | | Accumulated depreciation | $(2,695) | $(2,372) | | Construction in progress | $2,943 | $7,443 | | Total property and equipment, net | $8,385 | $10,044 | Accrued Expenses and Other Current Liabilities (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Sales tax payable | $6,019 | $5,950 | | Accrued acquisition liabilities | $2,180 | $3,502 | | Accrued construction costs | $1,540 | $2,669 | | Accrued interest expense | $1,041 | $240 | | Compensation related fees | $944 | $2,285 | | Accrued warranty expenses | $585 | $553 | | Total accrued expenses and other current liabilities | $12,824 | $16,380 | - The allowance for credit losses decreased from **$4.6 million** to **$2.5 million**, with a net recovery of bad debt of **$1.0 million** for the nine months ended September 30, 2023[138](index=138&type=chunk) - Construction in progress significantly decreased from **$7.4 million** to **$2.9 million**, contributing to the overall reduction in net property and equipment[142](index=142&type=chunk) [Note 4 — Fair Value Measures](index=26&type=section&id=Note%204%20%E2%80%94%20Fair%20Value%20Measures) Fair Value Measurements (in thousands) | Metric | Sep 30, 2023 (Total) | Dec 31, 2022 (Total) | | :--- | :--- | :--- | | Total Assets (Fair Value) | $4 | $460 | | Total Liabilities (Fair Value) | $2,386 | $5,985 | | Warrant liabilities - December 2022 warrants | $2,330 | $5,854 | - The Company's financial instruments measured at fair value on a recurring basis primarily include marketable securities (money market funds) and warrant liabilities, with warrant liabilities being the most significant component[150](index=150&type=chunk)[151](index=151&type=chunk) - Warrant liabilities, valued using Level 3 inputs and a Black-Scholes option-pricing model, decreased from **$5.9 million** at December 31, 2022, to **$2.4 million** at September 30, 2023, reflecting changes in estimated fair value[150](index=150&type=chunk)[151](index=151&type=chunk)[161](index=161&type=chunk) - Contingent consideration liabilities related to past acquisitions (PurePressure, Lab Society, Precision, and Cascade) were reduced or settled, with no change recorded for the nine months ended September 30, 2023[154](index=154&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk) [Note 5 — Loans Receivable](index=31&type=section&id=Note%205%20%E2%80%94%20Loans%20Receivable) Loans Receivable by Customer (in thousands) | Customer | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Customer 139 | $14,691 | $14,691 | | Customer 136 | $— | $12,457 | | Customer 125 | $9,012 | $9,048 | | Customer 24096 | $6,810 | $5,890 | | Allowance for credit losses | $(19,215) | $(33,050) | | Total loan receivable | $11,298 | $12,214 | - The Company's TTK Solution program provides capital and support to cannabis operators; a significant reserve of **$14.7 million** was established for Bud & Mary's due to ongoing litigation and collection uncertainty[170](index=170&type=chunk)[171](index=171&type=chunk) - The Greenstone loan, a related party, was fully written off against the reserve during Q2 2023 due to its sale to Denver Greens, which did not assume the loan[174](index=174&type=chunk) [Note 6 — Inventory](index=32&type=section&id=Note%206%20%E2%80%94%20Inventory) Inventory Composition (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Raw materials | $24,100 | $24,960 | | Prepaid inventory | $10,838 | $15,506 | | Finished goods | $7,607 | $13,689 | | Inventory for resale | $5,024 | $— | | Inventory, gross | $47,569 | $54,155 | | Inventory reserves | $(29,845) | $(32,759) | | Total inventory, net | $17,724 | $21,396 | Inventory Reserves (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Inventory reserves – beginning of period | $32,759 | $942 | | (Decrease) increase in inventory reserves | $(2,914) | $31,817 | | Inventory reserves – end of period | $29,845 | $32,759 | - Net inventory decreased from **$21.4 million** to **$17.7 million**, primarily due to a decrease in prepaid inventory and finished goods, partially offset by new inventory for resale[179](index=179&type=chunk) - Inventory reserves decreased by **$2.9 million** for the nine months ended September 30, 2023, indicating a reduction in provisions for obsolete, slow-moving, or defective items[182](index=182&type=chunk) [Note 7 — Goodwill and Intangible Assets, Net](index=33&type=section&id=Note%207%20%E2%80%94%20Goodwill%20and%20Intangible%20Assets%2C%20Net) Changes in Goodwill (in thousands) | Metric | Year Ended Dec 31, 2022 | | :--- | :--- | | Goodwill - beginning of period | $50,090 | | Goodwill acquired during period | $4,368 | | Goodwill purchase accounting adjustment | $289 | | Goodwill impairment loss | $(54,747) | | Goodwill - end of period | $— | - The Company recorded a full impairment charge of approximately **$69.9 million** for goodwill and intangible assets during the second quarter of 2022, due to a sustained decline in stock price, market capitalization, and a slowdown in the cannabis industry[185](index=185&type=chunk)[186](index=186&type=chunk) - As of December 31, 2022, and September 30, 2023, the net carrying value of goodwill and intangible assets was **zero** due to the full impairment recognized in 2022[187](index=187&type=chunk)[188](index=188&type=chunk) [Note 8 – Debt](index=35&type=section&id=Note%208%20%E2%80%93%20Debt) Debt Composition (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Note payable – Exchange Note | $18,509 | $31,975 | | PPP Loan | $518 | $656 | | Navitas loan | $10 | $23 | | Related party debt | $500 | $— | | Other notes payable | $487 | $— | | Total debt | $20,024 | $32,654 | | Long-term debt, net of current | $18,998 | $407 | - Total debt decreased from **$32.7 million** to **$20.0 million**, primarily due to repayments and conversions of the Exchange Note and Convertible Note[190](index=190&type=chunk) - The Company recognized a loss on extinguishment of debt of **$4.6 million** in March 2023 when the August 2022 Note was exchanged for a new Convertible Note[202](index=202&type=chunk) - In April and May 2023, the Company converted **$1.6 million** of the Convertible Note and **$2.0 million** of the Exchange Note into Common Stock[210](index=210&type=chunk)[211](index=211&type=chunk) - A **$0.5 million** unsecured promissory note was issued to GIC Acquisition, LLC, an entity owned by the Company's CEO, with a maturity date extended to December 31, 2023[215](index=215&type=chunk) [Note 9 - Leases](index=38&type=section&id=Note%209%20-%20Leases) Lease Costs (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | $205 | $293 | $709 | $828 | | Finance lease cost | $23 | $61 | $125 | $174 | | Total lease cost | $228 | $354 | $834 | $1,002 | Lease Liabilities (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Right-of-use assets, net | $2,036 | $2,210 | | Operating lease liabilities, current | $669 | $734 | | Operating lease liabilities, non-current | $1,550 | $1,587 | | Total operating lease liabilities | $2,219 | $2,321 | | Total finance lease liabilities | $— | $299 | - The weighted-average remaining lease term for operating leases was **3.23 years** with a weighted-average discount rate of **7.39%** as of September 30, 2023[225](index=225&type=chunk) - Finance lease liabilities were fully settled by September 30, 2023, down from **$299 thousand** at December 31, 2022[225](index=225&type=chunk) [Note 10 — Stockholders' Equity](index=40&type=section&id=Note%2010%20%E2%80%94%20Stockholders'%20Equity) - The Company increased its authorized Common Stock to **10,000,000 shares** and Preferred Stock to **3,000,000 shares** in March 2023[228](index=228&type=chunk) - In January 2022, a private placement generated approximately **$27.3 million** in gross proceeds from the sale of Common Stock and warrants[229](index=229&type=chunk)[232](index=232&type=chunk) - Shares of Common Stock were issued in connection with the acquisitions of Precision, Cascade, PurePressure, and Lab Society, including the release of held-back shares[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) - A Confidentially Marketed Public Offering in December 2022 generated **$8.2 million** in net proceeds from the sale of Common Stock and warrants, with the CEO participating[238](index=238&type=chunk)[242](index=242&type=chunk) [Note 11 — Stock-Based Compensation and Employee Benefit Plans](index=41&type=section&id=Note%2011%20%E2%80%94%20Stock-Based%20Compensation%20and%20Employee%20Benefit%20Plans) Stock Compensation Expense (in thousands) | Period | Stock Compensation Expense | | :--- | :--- | | 3 Months Ended Sep 30, 2023 | $0.5 | | 3 Months Ended Sep 30, 2022 | $1.6 | | 9 Months Ended Sep 30, 2023 | $2.1 | | 9 Months Ended Sep 30, 2022 | $3.5 | - The 2022 Omnibus Equity Incentive Plan replaced the 2020 Plan, reserving **26,483 shares** for various awards, with **13,198 shares** available as of September 30, 2023[244](index=244&type=chunk) - Total unrecognized compensation expense for unvested options was **$1.3 million** (expected over 0.46 years) and for unvested restricted stock units was **$0.7 million** (expected over 2.10 years) as of September 30, 2023[250](index=250&type=chunk)[255](index=255&type=chunk) - The 2022 Employee Stock Purchase Plan (ESPP) reserved **2,500 shares**, with eligible employees able to purchase stock at a discount, but no shares were granted under the ESPP during the three and nine months ended September 30, 2023[256](index=256&type=chunk)[257](index=257&type=chunk) [Note 12 — Stock Warrants](index=44&type=section&id=Note%2012%20%E2%80%94%20Stock%20Warrants) Warrant Activity | Metric | Warrants Outstanding at Dec 31, 2022 | Warrants Outstanding at Sep 30, 2023 | | :--- | :--- | :--- | | Number of Warrants | 1,530,001 | 1,495,001 | | Weighted Average Exercise Price | $38.07 | $38.07 | - The number of outstanding warrants decreased by **35,000** from December 31, 2022, to September 30, 2023, due to exercises[261](index=261&type=chunk) - No proceeds were received from the exercise of cashless warrants for the three and nine months ended September 30, 2023[261](index=261&type=chunk) [Note 13 — Income Taxes](index=44&type=section&id=Note%2013%20%E2%80%94%20Income%20Taxes) - The Company's effective income tax rate was **0.0%** for the nine months ended September 30, 2023, compared to **0.2%** for the same period in 2022[262](index=262&type=chunk) - The difference from the U.S. statutory tax rate of **21%** is primarily due to a valuation allowance recorded against certain deferred tax assets[262](index=262&type=chunk) [Note 14 — Net Loss Per Share](index=44&type=section&id=Note%2014%20%E2%80%94%20Net%20Loss%20Per%20Share) Net Loss Per Share (basic and diluted) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net loss attributable to Agrify Corporation | $(2,092) | $(57,413) | $(19,224) | $(130,235) | | Weighted-average common shares outstanding | 1,649,741 | 133,526 | 1,426,016 | 129,832 | | Net loss per share | $(1.27) | $(429.98) | $(13.48) | $(1,003.10) | - Net loss per share significantly improved to **$(1.27)** for the three months and **$(13.48)** for the nine months ended September 30, 2023, compared to **$(429.98)** and **$(1,003.10)** in the prior year, reflecting reduced net losses and the impact of reverse stock splits[265](index=265&type=chunk) - All potential dilutive securities (stock options, restricted stock units, and warrants) were excluded from diluted EPS calculation as they were anti-dilutive due to the Company reporting losses[264](index=264&type=chunk)[267](index=267&type=chunk) [Note 15 — Commitments and Contingencies](index=45&type=section&id=Note%2015%20%E2%80%94%20Commitments%20and%20Contingencies) - The Company is involved in litigation with Bud & Mary's, which filed a complaint alleging unfair trade practices and breach of contract, leading the Company to fully reserve the **$14.7 million** outstanding note receivable[268](index=268&type=chunk)[269](index=269&type=chunk) - Bowdoin Construction Corp. filed a complaint against the Company and Bud & Mary's for approximately **$6.3 million** due to nonpayment under a construction contract, which the Company intends to defend vigorously[271](index=271&type=chunk) - Mack Molding Co. filed an arbitration action for **$9.4 million** related to inventory purchased for VFUs, which was subsequently settled in October 2023, requiring future payments and VFU purchases[274](index=274&type=chunk)[275](index=275&type=chunk)[282](index=282&type=chunk) - The Company settled a legal dispute with a customer in September 2023, resulting in a gain of approximately **$0.9 million** and a receivable balance, with payments scheduled through January 2024[278](index=278&type=chunk) [Note 16 — Related Parties](index=48&type=section&id=Note%2016%20%E2%80%94%20Related%20Parties) Net Purchasing (Sales) Activity with Related Parties (in thousands) | Related Party | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Bluezone | $0 | $0 | $4 | $5 | | NEIA | $0 | $0 | $(43) | $(1,763) | | Greenstone Holdings | $0 | $212 | $(2) | $392 | | Valiant Americas, LLC | $0 | $1,315 | $0 | $11,120 | - The Company had minimal net purchasing/sales activity with related parties for the three and nine months ended September 30, 2023, compared to more significant activity in the prior year[290](index=290&type=chunk) - A **$0.5 million** unsecured promissory note was issued to GIC Acquisition, LLC, an entity owned by the Company's Chairman and CEO, in July 2023[215](index=215&type=chunk)[290](index=290&type=chunk) [Note 17 — Subsequent Events](index=48&type=section&id=Note%2017%20%E2%80%94%20Subsequent%20Events) - The Company filed its overdue 2022 Form 10-K and Q1/Q2 2023 Form 10-Q reports in November and December 2023, but received a Staff Delisting Determination from Nasdaq and requested a hearing[292](index=292&type=chunk)[293](index=293&type=chunk) - In October 2023, the Company settled a dispute with Mack Molding Company, agreeing to make payments of **$750,000**, purchase minimum VFUs quarterly, and issued a warrant to purchase **750,000 shares** of Common Stock[294](index=294&type=chunk)[296](index=296&type=chunk) - CP Acquisitions LLC, an entity affiliated with the CEO, purchased the Exchange Note and Convertible Note in October 2023, waiving defaults and extending maturity dates to **December 31, 2025**[297](index=297&type=chunk) - The Company issued new warrants (Exchange Warrant for **2,809,669 shares** and Abeyance Warrant for **375,629 shares**) in October 2023 as a condition to the Note Purchase, with specific exercise prices and terms[298](index=298&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk) - The Related Party Note with GIC was amended and restated, and a Junior Secured Note for up to **$4.0 million** was issued to CP Acquisitions LLC, both ranking junior to the acquired notes[302](index=302&type=chunk)[303](index=303&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=50&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial results, highlighting revenue declines, improved margins, and liquidity challenges [Overview](index=50&type=section&id=Overview) - Agrify is a developer of proprietary precision hardware and software grow solutions for the indoor commercial agriculture industry, specializing in cultivation, extraction, post-processing, and testing for cannabis and hemp[308](index=308&type=chunk) - The Company's 'Precision Elevated™' cultivation solution integrates hardware, software (Agrify Insights), and services (consulting, engineering, construction) to provide a comprehensive indoor farming solution[308](index=308&type=chunk) - The Company effected **1-for-10** (October 2022) and **1-for-20** (July 2023) reverse stock splits, retroactively adjusting all share and per share information[310](index=310&type=chunk)[311](index=311&type=chunk) [Recent Business Developments](index=51&type=section&id=Recent%20Business%20Developments) - In January 2022, a private placement generated approximately **$27.3 million** in gross proceeds from the sale of Common Stock and warrants[313](index=313&type=chunk)[315](index=315&type=chunk) - The Company acquired Lab Society in February 2022 for **$4.0 million** in cash, **2,128 shares** of Common Stock, and potential earn-out consideration of up to **$3.5 million**[316](index=316&type=chunk)[317](index=317&type=chunk)[319](index=319&type=chunk) - In August 2022, the Company amended its SPA Note, partially repaying **$35.2 million** and exchanging the remaining balance for a **$35.0 million** Exchange Note and new warrants[325](index=325&type=chunk) - In March 2023, the Company prepaid **$10.3 million** of the Exchange Note and exchanged **$10.0 million** for a new Convertible Note, resulting in a **$4.6 million** loss on extinguishment of debt[334](index=334&type=chunk)[335](index=335&type=chunk) - The ATM Program, which generated **$15.0 million** net proceeds in 2022, was discontinued due to the late filing of the 2022 Annual Report on Form 10-K[346](index=346&type=chunk) - A Confidentially Marketed Public Offering in December 2022 generated **$8.2 million** in net proceeds from the sale of Common Stock and warrants[352](index=352&type=chunk) [Financial Overview](index=56&type=section&id=Financial%20Overview) - Management's discussion emphasizes critical accounting policies, including revenue recognition (five-step model, SSP determination), accounting for business combinations (fair value estimates, intangible asset amortization), goodwill and intangible asset impairment, capitalization of internal software development costs, income taxes (deferred taxes, valuation allowance), and stock-based compensation (Black-Scholes model, forfeiture rates)[354](index=354&type=chunk)[355](index=355&type=chunk)[372](index=372&type=chunk)[375](index=375&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk) - Significant judgments are required in determining standalone selling prices for performance obligations, valuing acquired assets and liabilities in business combinations, and estimating future cash flows for impairment testing[361](index=361&type=chunk)[362](index=362&type=chunk)[374](index=374&type=chunk) - The Company fully impaired its goodwill and intangible assets in Q2 2022 due to market conditions and financial performance, resulting in no impairment charges for the three and nine months ended September 30, 2023[377](index=377&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Revenue Breakdown (in thousands) | Revenue Source | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | % Change | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cultivation solutions, including ancillary products and services | $138 | $4 | 3350% | $633 | $707 | (10)% | | Agrify Insights software | $58 | $1 | 5700% | $123 | $46 | 167% | | Facility build-outs | $0 | $1,334 | (100)% | $882 | $23,551 | (96)% | | Extraction solutions | $2,943 | $5,680 | (48)% | $12,371 | $28,065 | (56)% | | Total revenue | $3,139 | $7,019 | (55)% | $14,009 | $52,369 | (73)% | - Total revenue decreased by **55%** and **73%** for the three and nine months ended September 30, 2023, respectively, primarily due to significant decreases in facility build-outs and extraction solutions[392](index=392&type=chunk) - Gross profit improved to **$1.0 million (31.0% margin)** for the three months and **$2.6 million (18.3% margin)** for the nine months ended September 30, 2023, compared to gross losses/lower profits in the prior year, driven by a larger decrease in cost of goods sold relative to revenue decline[396](index=396&type=chunk) - Operating expenses (G&A, S&M, R&D) significantly decreased by **82%** and **70%** for the three and nine months ended September 30, 2023, respectively, primarily due to reductions in bad debt, personnel costs, and facility expenses[399](index=399&type=chunk)[401](index=401&type=chunk)[405](index=405&type=chunk) - Other income (expense), net, showed a positive change of **$28.4 million** for the three months and a negative change of **$(4.1) million** for the nine months, largely influenced by changes in the fair value of warrant liabilities and the loss on extinguishment of notes payable in 2022[406](index=406&type=chunk)[407](index=407&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2023, the Company's principal sources of liquidity were cash and cash equivalents and marketable securities totaling **$0.2 million**, down from **$10.5 million** cash and **$10.0 million** restricted cash at December 31, 2022[11](index=11&type=chunk)[412](index=412&type=chunk) - The Company's working capital needs are substantial, particularly for funding TTK Solutions construction and equipment financing commitments[412](index=412&type=chunk) - Net cash used in operating activities decreased to **$(25.9) million** for the nine months ended September 30, 2023, from **$(58.0) million** in the prior year[421](index=421&type=chunk) - Net cash provided by investing activities was **$25.2 million**, a significant improvement from a **$(4.1) million** outflow in the prior year, driven by proceeds from securities sales and loan repayments[421](index=421&type=chunk) - Net cash used in financing activities was **$(9.6) million**, a reversal from the **$52.3 million** provided in the prior year, primarily due to debt repayments[421](index=421&type=chunk) - The Company's ability to raise additional debt or equity capital is crucial, and there is no assurance it can do so on acceptable terms, which could adversely affect its business and financial condition[413](index=413&type=chunk) [Off-Balance Sheet Arrangements](index=68&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company confirms it did not have any off-balance sheet arrangements, such as relationships with unconsolidated entities or special purpose entities, during the periods presented[429](index=429&type=chunk) [Critical Accounting Policies and Estimates](index=68&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - This section refers readers to Note 1 for a detailed discussion of critical accounting policies and estimates, including fair value of derivative assets and liabilities, goodwill impairment, revenue recognition, and cost of goods sold[430](index=430&type=chunk)[431](index=431&type=chunk)[432](index=432&type=chunk) [Recently Issued Accounting Pronouncements Adopted](index=68&type=section&id=Recently%20Issued%20Accounting%20Pronouncements%20Adopted) - This section refers readers to Note 1 for information on recently issued accounting pronouncements adopted by the Company[433](index=433&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=69&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Agrify is exempt from market risk disclosures as a smaller reporting company - The Company is not required to provide quantitative and qualitative disclosures about market risk as it qualifies as a "smaller reporting company"[435](index=435&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=69&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls were deemed ineffective due to material weaknesses in internal control - The Chief Executive Officer concluded that the Company's disclosure controls and procedures were **not effective** as of September 30, 2023[437](index=437&type=chunk) - This ineffectiveness is attributed to material weaknesses in internal control over financial reporting, as previously identified in the 2022 Annual Report on Form 10-K[437](index=437&type=chunk) - The Company is implementing remediation measures, including hiring technically qualified personnel and improving technical accounting resources and capabilities[438](index=438&type=chunk) PART II - OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=70&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 15 for details on legal proceedings - Information regarding legal proceedings is incorporated by reference from Note 15 – Commitments and Contingencies[441](index=441&type=chunk) [ITEM 1A. RISK FACTORS](index=70&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors are reported, but risks from a recent reverse stock split are noted - No material changes to risk factors were identified as of the report date, referring to the Annual Report on Form 10-K for the year ended December 31, 2022[442](index=442&type=chunk) - The **1-for-20** reverse stock split completed on July 5, 2023, carries risks, including no guarantee of increased market price, potential failure to meet Nasdaq listing requirements, negative market perception, and the creation of 'odd lots' for stockholders[443](index=443&type=chunk)[447](index=447&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=70&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The Company reports no unregistered sales of equity securities - There were no unregistered sales of equity securities and use of proceeds to report[444](index=444&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=70&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The Company reports no defaults upon senior securities - There were no defaults upon senior securities to report[445](index=445&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=70&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the Company - This item is not applicable to the Company[446](index=446&type=chunk) [ITEM 5. OTHER INFORMATION](index=70&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The Company reports no other information - There is no other information to report[447](index=447&type=chunk) [ITEM 6. EXHIBITS](index=71&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q - The report includes a list of exhibits, such as promissory notes, warrants, and certifications, with many incorporated by reference from prior 8-K filings[448](index=448&type=chunk) - Key exhibits include the Promissory Note to GIC Acquisition, LLC, Exchange and Abeyance Warrants to High Trail Special Situations LLC, and a Common Stock Purchase Warrant to Mack Molding Company[448](index=448&type=chunk) SIGNATURES - The report is signed by Raymond Chang, Chief Executive Officer (Principal Executive Officer and Principal Financial and Accounting Officer) on January 3, 2024[454](index=454&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-39946 AGRIFY CORPORATION (Exact name of registrant as specified in its charter) Nevada 30-0943453 (State or other juris ...