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 the quarter ended March 31, 2021, highlighting a significant increase in cash and total assets, a substantial rise in revenue, a shift to a gross loss, and a dramatic improvement in equity due to capital raising activities [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2021, the company's balance sheet shows a dramatic improvement in financial position compared to December 31, 2020, with cash and cash equivalents surging to **$137.9 million** from **$8.1 million**, total assets increasing to **$161.5 million**, and stockholders' equity shifting from a deficit of **($6.7 million)** to a surplus of **$145.9 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $137,887 | $8,111 | | Total current assets | $158,137 | $18,640 | | Total Assets | $161,492 | $21,839 | | **Liabilities & Equity** | | | | Total current liabilities | $14,163 | $27,029 | | Total Liabilities | $15,441 | $28,293 | | Total Stockholders' Equity (Deficit) | $145,859 | ($6,679) | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2021, Agrify reported a significant revenue increase to **$7.0 million** from **$1.0 million** in the prior-year period, but incurred a gross loss of **($540 thousand)** due to higher costs, leading to a wider operating loss of **($6.5 million)**, partially offset by a **$2.7 million** gain on extinguishment of notes payable Condensed Consolidated Statements of Operations (in thousands) | Metric | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :--- | :--- | :--- | | Revenue, net | $7,008 | $1,013 | | Cost of goods sold | $7,548 | $972 | | Gross (loss) profit | ($540) | $41 | | Total operating expenses | $5,956 | $3,490 | | Operating loss | ($6,496) | ($3,449) | | Gain on extinguishment of notes payable | $2,685 | $— | | Net loss attributable to Agrify Corporation | ($3,810) | ($3,413) | | Net loss per share – basic and diluted | ($0.33) | ($0.93) | [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) The statement for Q1 2021 highlights a transformative period for the company's equity structure, with an initial deficit of **($6.7 million)** erased by substantial capital infusions from an Initial Public Offering (net proceeds **~$57.0 million**) and a secondary public offering (net proceeds **~$79.8 million**), culminating in a total stockholders' equity of **$145.9 million** - The company completed an IPO, raising net proceeds of **$57.0 million**[13](index=13&type=chunk) - A secondary public offering raised net proceeds of **$79.8 million**[13](index=13&type=chunk) - Convertible notes with a principal of **$13.1 million** were converted into **1.7 million** shares of common stock[13](index=13&type=chunk)[54](index=54&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2021, net cash used in operating activities increased to **($7.3 million)**, while financing activities provided a significant **$137.2 million** primarily from public offerings, resulting in a net cash increase of **$129.8 million** and boosting the ending cash balance to **$137.9 million** Net Cash Flow Summary (in thousands) | Activity | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($7,279) | ($3,920) | | Net cash used in investing activities | ($142) | ($1,155) | | Net cash provided by financing activities | $137,197 | $6,080 | - Financing activities in Q1 2021 were dominated by proceeds from the IPO (**$57.0 million** net) and a secondary public offering (**$79.8 million** net)[16](index=16&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide critical context to the financial statements, detailing a reverse stock split, the completion of IPO and secondary offerings, conversion of convertible notes, high customer concentration with one customer accounting for **77.9%** of revenue, and ongoing litigation with former employees - On January 12, 2021, the Company effected a **1-for-1.581804 reverse stock split**, and all share data has been retroactively adjusted[20](index=20&type=chunk) - In Q1 2021, one customer accounted for **77.9%** of revenue, and three customers accounted for **87.7%** of accounts receivable[32](index=32&type=chunk) - On February 1, 2021, all convertible notes with a principal of **$13.1 million** were converted into **1,697,075** shares of common stock at a price of **$7.72** per share[54](index=54&type=chunk) - The company is involved in a lawsuit filed by two former employees concerning compensation, equity, and wrongful termination. The company believes the claims lack merit[85](index=85&type=chunk)[159](index=159&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance for Q1 2021, highlighting a significant revenue increase to **$7.0 million** driven by new facility build-out services, offset by a gross loss of **$540 thousand** and increased operating expenses, while liquidity was substantially strengthened by raising approximately **$137 million** from public offerings [Overview and Public Offerings](index=20&type=section&id=Overview%20and%20Public%20Offerings) Agrify positions itself as a developer of advanced hardware and software solutions for indoor agriculture, significantly bolstering its financial position in Q1 2021 through an IPO that raised approximately **$57 million** in net proceeds and a secondary offering that raised an additional **$80 million** net - The company's IPO in February 2021 resulted in total net proceeds of approximately **$57 million**[101](index=101&type=chunk) - A subsequent secondary public offering in February 2021 resulted in total net proceeds of approximately **$80 million**[103](index=103&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Comparing Q1 2021 to Q1 2020, revenue surged from **$1.0 million** to **$7.0 million**, primarily from facility build-outs, but the company experienced a gross loss of **($540 thousand)** due to inventory obsolescence and higher costs, while SG&A expenses more than doubled due to increased stock-based compensation Revenue Breakdown (in thousands) | Revenue Source | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Cultivation solutions | $230 | $1,009 | | Agrify Insights software | $8 | $— | | Facility build-outs | $6,770 | $— | | Services | $— | $4 | | **Total** | **$7,008** | **$1,013** | - The gross margin percentage decreased to **(7.7)%** in Q1 2021 from **4.0%** in Q1 2020, primarily due to a **$113 thousand** inventory obsolescence reserve, **$345 thousand** in new employee-related expenses, and lower gross margins from construction revenue[132](index=132&type=chunk) - SG&A expenses increased significantly, driven by a **$1.7 million** increase in stock-based compensation, which included a non-recurring expense of **$1.2 million** related to the IPO[138](index=138&type=chunk) - The company recognized a gain on extinguishment of notes payable of **$2.7 million** in Q1 2021[139](index=139&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved dramatically, ending Q1 2021 with approximately **$139 million** in cash and cash equivalents following its public offerings, which management asserts are sufficient for planned operations for at least the next 12 months, despite cash flow from operations being a use of **($7.3 million)** - The company had approximately **$139 million** in cash and cash equivalents after its February 2021 public offering and believes this is sufficient to support operations for at least the next 12 months[143](index=143&type=chunk) Cash Flow Summary (in thousands) | Activity | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | Operating Activities | ($7,279) | ($3,920) | | Investing Activities | ($142) | ($1,155) | | Financing Activities | $137,197 | $6,080 | - The company has an outstanding PPP Loan of **$823 thousand** which may be eligible for forgiveness[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is not required to provide the information for this item because it qualifies as a "smaller reporting company" under SEC regulations - As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of March 31, 2021, the company's Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were not effective, and the company is implementing measures to remediate identified material weaknesses in its internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2021[155](index=155&type=chunk) - The company is implementing measures to remediate material weaknesses identified in the design and operation of its internal control over financial reporting[156](index=156&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a lawsuit filed on January 19, 2021, by two former employees alleging various claims including breach of contract and wrongful termination, which the company believes are without merit and intends to vigorously defend against - On January 19, 2021, two former employees filed a lawsuit against the company in the United States District Court for the Western District of Washington[159](index=159&type=chunk)[85](index=85&type=chunk) - The claims include demands for sales commissions, equity earn-outs, and allegations of wrongful termination, fraud, and breach of fiduciary duty[158](index=158&type=chunk) - A Magistrate has issued a preliminary recommendation to dismiss certain claims while allowing others to proceed to discovery. The company intends to vigorously defend against all claims[159](index=159&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company is not required to provide risk factor disclosures in this report as it qualifies as a "smaller reporting company" under Rule 12b-2 of the Securities Exchange Act of 1934 - The company is a smaller reporting company and is not required to provide the information under this item[160](index=160&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the quarter, confirming the closing of its IPO on February 1, 2021, which raised total gross proceeds of **$62.1 million** and net proceeds of approximately **$57.0 million**, with no material change in the planned use of these proceeds - The company's IPO closed on February 1, 2021, selling **6,210,000** shares of common stock at **$10.00** per share for gross proceeds of **$62.1 million**[160](index=160&type=chunk) - Net proceeds from the IPO were approximately **$57.0 million** after deducting underwriting discounts, commissions, and other offering expenses[161](index=161&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[161](index=161&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[161](index=161&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this period - None[161](index=161&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include certifications from the principal executive officer and principal financial officer as required by SEC rules, as well as XBRL data files - The exhibits filed include Rule 13(a)-14(a)/15(d)-14(a) and Section 1350 certifications for the principal executive and financial officers, along with various XBRL documents[162](index=162&type=chunk) Signatures [Signatures](index=33&type=section&id=Signatures_details) The quarterly report was duly signed and authorized on May 17, 2021, by Raymond Chang, the Chief Executive Officer, and Niv Krikov, the Chief Financial Officer - The report was signed on May 17, 2021, by Raymond Chang (Chief Executive Officer) and Niv Krikov (Chief Financial Officer)[164](index=164&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 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 jurisd ...