AgriFORCE Growing Systems .(US:AGRI)2025-08-14 20:08PART I — FINANCIAL INFORMATION Financial Statements AgriFORCE saw revenue growth from Bitcoin mining but a wider $8.2 million net loss, with a $9.7 million working capital deficiency raising going concern doubts Condensed Consolidated Balance Sheets Assets increased to $15.2 million by June 30, 2025, driven by Bitcoin mining investments, financed by debentures, resulting in a $9.7 million working capital deficiency Consolidated Balance Sheet Highlights (as of June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | $185,313 | $489,868 | | Digital assets | $724,971 | $26,282 | | Total current assets | $1,401,103 | $1,307,233 | | Property and equipment, net | $4,807,533 | $808,895 | | Total assets | $15,243,271 | $10,763,983 | | Liabilities & Equity | | | | Debentures | $7,976,752 | $1,443,209 | | Total current liabilities | $11,068,922 | $4,320,265 | | Total liabilities | $11,184,288 | $4,652,730 | | Total shareholders' equity | $4,058,983 | $6,111,253 | - The company had a working capital deficiency of $9.7 million as of June 30, 2025, indicating significant short-term liquidity risk32 Condensed Consolidated Statements of Comprehensive Loss Revenue surged to $725,209 for the six months ended June 30, 2025, driven by Bitcoin mining, but net loss widened to $8.2 million due to debt extinguishment and discontinued operations losses Statement of Comprehensive Loss Summary (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $725,209 | $41,315 | | Operating Loss | $(3,184,292) | $(2,515,099) | | Net Loss from Continuing Operations | $(6,804,649) | $(7,559,799) | | Net Loss from Discontinued Operations | $(1,401,048) | $0 | | Net Loss | $(8,205,697) | $(7,559,799) | | Basic and Diluted EPS (Total) | $(31.59) | $(290.57) | Condensed Consolidated Statements of Cash Flows Net cash used in operations increased to $3.1 million, with $5.7 million used in investing for mining facilities, funded by $8.5 million in financing, resulting in a cash decrease of $304,555 Cash Flow Summary (Six Months Ended June 30) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,056,552) | $(2,228,537) | | Net cash used in investing activities | $(5,683,307) | $0 | | Net cash provided by financing activities | $8,542,000 | $1,363,255 | | Change in cash | $(304,555) | $(941,082) | | Cash, end of period | $185,313 | $2,937,496 | Notes to Financial Statements Notes detail the company's pivot to Bitcoin mining, acquisition of Bald Eagle facility, disposal of RCS, reliance on convertible debentures, and a going concern warning - The company has pivoted its strategy to focus on sustainable Bitcoin mining, which began in 2024 and now represents its main operation2829 - Management has identified substantial doubt about the company's ability to continue as a going concern due to recurring net losses, a working capital deficiency of $9.7 million, and the need for additional financing3233 - On January 17, 2025, the company acquired the Bald Eagle Bitcoin mining facility in Ohio for a total purchase price of $4,765,00084 - On July 1, 2025, the company agreed to return the assets of Radical Clean Solutions (RCS) to the seller, resulting in a loss on disposal of $904,112 for the period ended June 30, 202578101 - The company has issued multiple tranches of convertible debentures, with down-round provisions that adjust conversion and strike prices downward upon subsequent dilutive equity issuances103113114 Management's Discussion and Analysis (MD&A) MD&A details the company's pivot to energy-first digital infrastructure and Bitcoin mining, with revenue of $725,209, increased operating expenses, an $8.2 million net loss, and a going concern warning - The company has rebranded its strategy to be an "energy-first digital infrastructure company" focusing on modular, off-grid compute platforms for AI, edge computing, and crypto mining174 - The company's three-pillar strategy includes: 1) using modular architecture for crypto mining and AI compute, 2) deploying mobile gas-to-power units, and 3) building a strategic digital reserve of Bitcoin178 - The weighted average cost to mine one Bitcoin across its facilities is approximately $44,400209210 - The company is holding up to 50% of mined Bitcoin as part of a treasury strategy and has begun using its Bitcoin holdings as collateral for loans206 Results of Operations Revenue increased to $725,209, primarily from Bitcoin mining, while total operating expenses rose 53% to $3.9 million, leading to an $8.2 million net loss due to debt extinguishment and discontinued operations Revenue Breakdown (Six Months Ended June 30) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Bitcoin Mining | $724,768 | $0 | | Hydroxyl Devices | $531 | $41,315 | | Total Revenue | $725,209 | $41,315 | Operating Expenses Comparison (Six Months Ended June 30) | Expense Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Cost of revenue | $462,854 | $33,731 | +1272.2% | | Wages and salaries | $1,158,190 | $719,220 | +61.0% | | Professional fees | $579,642 | $329,729 | +75.8% | | Depreciation and amortization | $593,735 | $329,939 | +80.0% | | Total Operating Expenses | $3,909,501 | $2,556,414 | +52.9% | Liquidity and Capital Resources Liquidity is constrained with cash at $185,313, a net loss of $8.2 million, and a significant working capital deficit, raising substantial doubt about going concern, requiring additional capital - The company's financial statements have been prepared on a going concern basis, but factors like recurring losses and a working capital deficit raise substantial doubt about its ability to continue235 - To fund operations for the next twelve months, the company will seek additional capital through debt or equity sales, including its At the Market (ATM) facility, but there is no assurance of success236 Quantitative and Qualitative Disclosures About Market Risk AgriFORCE is exempt from providing market risk disclosures as it qualifies 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 company243 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025244 - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2025245 PART II — OTHER INFORMATION Legal Proceedings The company is involved in ongoing legal matters, including a wrongful termination lawsuit by a former CEO, a settled breach of contract complaint, and a dispute with a Belgian law firm - The company is in litigation with its former CEO, Ingo Mueller, over a wrongful termination claim. The company asserts the termination was for 'just cause' and believes an unfavorable outcome is not probable152153154 - A complaint from Stronghold regarding a property purchase agreement was settled in January 2025, with the company agreeing to pay $20,833 monthly for 12 months155 Risk Factors AgriFORCE is exempt from providing risk factor disclosures as it qualifies as a smaller reporting company - The company is electing scaled disclosure obligations as a smaller reporting company and is not required to provide risk factors in this filing249 Unregistered Sales of Equity Securities and Use of Proceeds The company conducted unregistered sales of securities, including $7.7 million in convertible debentures and a $290,000 promissory note, triggering down-round provisions - On January 16, 2025, the company sold $7.7 million in convertible debentures to investors250 - On April 22, 2025, the company sold a promissory note for gross proceeds of $250,000 ($290,000 principal)251 - Subsequent to the quarter, on July 21, 2025, the company sold an additional $833,333 in convertible debentures252 Defaults Upon Senior Securities No defaults upon senior securities were reported - The company reported no defaults upon senior securities255 Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the company256 Other Information No other information was reported for this item - The company reported no other information for this item257 Exhibits The report includes required certifications (302 and 906), an amendment to the ATM Agreement, and Inline XBRL data files - Exhibits filed include CEO and CFO certifications (302 and 906), an amendment to the ATM Agreement, and XBRL data files258