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 (the “New Lender”), an entity affiliated with Raymond Chang,
the Chief Executive Officer of the Company and a member of the
Board of Directors (the “Board”), and I-Tseng Jenny Chan, a member
of the Board, has been consolidated under a single convertible note
and approximately $3.9 million of the outstanding debt has been
converted into equity at a conversion price per share equal to
$1.46, or 212% premium to the latest closing price, and that its
prior secured lender (the “Prior Lender”) has exercised 2,475,629
of the warrants previously issued in October 2023 on a cashless
basis for a net issuance of 2,473,542 shares of common stock, thus
greatly reducing the number of outstanding warrants.
The Company’s Annual Meeting of Stockholders on
January 8, 2024 (the “Annual Meeting”) was adjourned until January
22, 2024 (the “Reconvened Meeting”), only with respect to the
proposal to approve the Charter Amendment, owing to Item 3
receiving less than the affirmative vote of a majority of the
Company’s outstanding common stock as of the record date of
December 6, 2023, which was the required minimum vote to approve
the Charter Amendment. At the Reconvened Meeting, shares
representing approximately 51.6% of the outstanding shares of
common stock as of the record date were voted in favor of the
Charter Amendment, representing approximately 94.6% of votes cast
on the proposal, resulting in the Charter Amendment being approved.
The Charter Amendment will provide the Company with a number of
shares of common stock so that common stock can be issued in
connection with conversion of the Restated Note into equity, among
other things.
In addition, the New Lender, which previously
purchased from the Prior Lender the Senior Secured Note issued by
the Company to the Prior Lender on August 19, 2022 (the “Exchange
Note”) and the Senior Secured Convertible Note issued by the
Company to the Prior Lender on March 10, 2023 (the “Convertible
Note”), and to which the Company previously issued a junior secured
promissory note (the “Junior Secured Note”) with a maximum
principal amount of $4,000,000, entered into a consolidation,
amendment and restatement of the Convertible Note with the Company
to consolidate the outstanding principal and interest due under the
Junior Secured Note and the Exchange Note into the Convertible Note
and to amend and restate the Convertible Note (the “Restated Note”)
consistent with the terms contained in the proposal approved by the
stockholders of the Company at the Annual Meeting, with an
outstanding principal amount of approximately $18.9 million at the
time of issuance of the Restated Note. Immediately following the
execution of the Restated Note, the New Lender elected to convert
approximately $3.9 million of outstanding principal into an
aggregate of 2,671,633 shares of common stock, at a conversion
price of $1.46 per share, and assigned its rights to receive such
shares to entities affiliated with Mr. Chang and Ms. Chan.
Concurrently, GIC Acquisition, another entity affiliated with Mr.
Chang, agreed to increase the principal amount under its
previously-issued junior secured note from $0.5 million to $1
million.
On January 22, 2024, pursuant to notices of
exercise received from the Prior Lender, the Company issued an
aggregate of 2,473,542 shares of common stock to the Prior Lender
upon the cashless exercise of two warrants issued to the Prior
Lender on October 27, 2023. The issuance of the Warrant Shares
represents the full exercise of the Abeyance Warrant as described
in the Company’s Current Report on Form 8-K filed on October 30,
2023 (the “October 30 Form 8-K”) and the partial exercise of the
Exchange Warrant as described in the October 30 Form 8-K, which
remains exercisable for up to 659,669 shares of common stock,
subject to adjustment pursuant to its terms.
The consolidation of the outstanding debt held
by the New Lender into the Restated Note and the conversion of some
amount of the debt thereunder, together with the reduction in the
number of outstanding warrants held by the Prior Lender is expected
to result in a reduction in liabilities on the Company’s balance
sheet, which the Company believes will help it to regain compliance
with Nasdaq’s Listing Rule 5550(b)(1), which requires that listed
companies maintain a minimum of $2.5 million in stockholders’
equity.
“We are very pleased to achieve yet another
major milestone in our effort to restructure Agrify’s balance
sheet. The $3.9 million conversion at a significant premium to our
current market price exemplifies our continuous confidence and
support in Agrify’s turnaround initiatives,” noted Raymond Chang,
Chief Executive Officer of Agrify.
About Agrify
Agrify is a leading provider of innovative
cultivation and extraction solutions for the cannabis industry,
bringing data, science, and technology to the forefront of the
market. Our proprietary micro-environment-controlled Vertical
Farming Units (VFUs), enable cultivators to produce the highest
quality products with unmatched consistency, yield, and ROI (return
on investment) at scale. Our comprehensive extraction product line,
which includes hydrocarbon, ethanol, solventless extraction,
post-processing, and lab equipment, empowers producers to maximize
the quantity and quality of extract required for premium
concentrates. For more information, please visit our website at
http://www.agrify.com.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 concerning Agrify and other matters. All
statements contained in this press release that do not relate to
matters of historical fact should be considered forward-looking
statements including, without limitation, statements regarding
future financial results, including the ability to regain
compliance with Nasdaq listing standards and the ability to reduce
liabilities on its balance sheet. In some cases, you can identify
forward-looking statements by terms such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“targets,” “projects,” “contemplates,” “believes,” “estimates,”
“predicts,” “potential,” or “continue” or the negative of these
terms or other similar expressions. The forward-looking statements
in this press release are only predictions. We have based these
forward-looking statements largely on our current expectations and
projections about future events and financial trends that we
believe may affect our business, financial condition, and results
of operations. Forward-looking statements involve known and unknown
risks, uncertainties and other important factors that may cause our
actual results, performance, or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. You should
carefully consider the risks and uncertainties that affect our
business, including those described in our filings with the
Securities and Exchange Commission (“SEC”), including under the
caption “Risk Factors” in our Annual Report on Form 10-K for the
year ended December 31, 2022 that was filed with the SEC on
November 28, 2023, which can be obtained on the SEC website at
www.sec.gov. These forward-looking statements speak only as of the
date of this communication. Except as required by applicable law,
we do not plan to publicly update or revise any forward-looking
statements, whether as a result of any new information, future
events, or otherwise. You are advised, however, to consult any
further disclosures we make on related subjects in our public
announcements and filings with the SEC.
Agrify Investor Relations
IR@agrify.com(857) 256-8110
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