AgriFORCE Growing Systems .(US:AGRI)2024-08-13 21:15Commercialization and Product Development - The company achieved milestones in the commercialization of UN(THINK) Awakened Flour™, producing several multi-ton batches and establishing supply chain logistics with warehouses in Canada and the US [122]. - The patented CERES-MNG process allows for flour that has 40 times more fiber, three times more protein, and 75% less net carbohydrates compared to regular all-purpose flour [127]. - The company is developing several finished product prototypes, including a line of pancake mixes, which are ready for consumer testing [123]. - The company is focused on the commercialization of Hydroxyl Devices and clean room systems to reduce pathogens and improve food safety in processing facilities worldwide [141]. Market Potential and Financial Projections - The global market size for target categories is estimated at $235 billion for breads, $72 billion for whole wheat flours, $19 billion for pulse flours, and $23 billion for dairy alternatives, with potential net revenues for AgriFORCE™ projected at $560 million [133]. Strategic Partnerships and Agreements - The company signed a definitive agreement to purchase a 14% ownership stake in Radical Clean Solutions, Inc. on October 1, 2023 [147]. - The company generated its first revenue from the sale of RCS devices in late 2023 and signed an exclusive distribution agreement in Mexico for AgriFORCE/RCS hydroxyl generating devices [148]. - The company plans to expand its distribution network into Latin America and Asia, leveraging its sales into the poultry industry in Mexico [149]. Technology and Innovation - The company is integrating artificial intelligence and blockchain into its business model to enhance agricultural practices and financing capabilities [137]. - The FORCEGH+ technology aims to optimize crop yields while significantly reducing the need for pesticides and conserving water [140]. Financial Performance and Position - The Company recorded a net loss of $7,559,799 for the six months ended June 30, 2024, compared to a net loss of $4,247,025 for the same period in 2023 [167]. - The Company held $2,937,496 in cash as of June 30, 2024, down from $3,878,578 at December 31, 2023 [168]. - Operating expenses decreased by $1,737,754 or 60% for the three months ended June 30, 2024, primarily due to reductions in consulting fees, wages, and share-based compensation [165]. - Operating expenses decreased by $3,251,158 or 57% for the six months ended June 30, 2024, due to similar factors affecting the three-month period [166]. - Net cash provided by financing activities for the six months ended June 30, 2024, was $2,250,000, a decrease from $4,615,385 in the same period of 2023 [172]. Capital Structure and Financing - The company intends to seek additional capital through debt or equity financing to fund operations, with substantial doubt about its ability to continue as a going concern for the next twelve months [169]. - A share repurchase program was authorized on June 17, 2024, allowing the Company to repurchase up to $1 million of its outstanding common shares over six months [159]. - The company issued 20,000 common shares with 20,000 warrants for $250,000 on June 20, 2023, and raised $939,695 from 124,652 common shares issued under the ATM public offerings agreement [174]. - An additional tranche of $2,750,000 in convertible debentures was purchased on October 18, 2023, with an exercise price of $2.62, adjusting previous debenture exercise prices [175]. - On November 30, 2023, another tranche of $2,750,000 in convertible debentures was issued at an exercise price of $0.90, further adjusting the exercise prices of multiple tranches [176]. - A total of $1,100,000 in convertible debentures was purchased on February 21, 2024, with an exercise price of $0.214, impacting the exercise prices of all previous tranches [177]. - The company experienced a non-cash change in fair value of derivative liabilities decreasing by $5,140,099 due to significant conversions of debentures and stock price stabilization [179]. - Loss on debt extinguishment cash adjustment increased by $2,298,369 due to unscheduled conversions of debentures into common shares [179]. - Loss on conversion of convertible debt cash adjustment rose by $958,877 due to higher premiums on shares issued compared to the previous year [179]. - The company issued 5,414,500 warrants with an additional tranche of $833,000 in convertible debentures on May 22, 2024, at an exercise price of $0.10 [179]. Employment and Operational Changes - The number of employees decreased from 15 to 7 during the three months ended June 30, 2024, contributing to reduced wages and salaries [165]. - The Company is focusing on organic growth of currently active ventures, leading to a significant decrease in M&A spending [165]. Off-Balance Sheet Arrangements - There were no off-balance sheet arrangements reported [180].