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 fiscal year ended December 31, 2022 (“FY 2022”), and for the
first quarter ended March 31, 2023 (“Q1 2023”).
“In 2023, we continued to make progress on our
turn-around,” said Raymond Chang, Chairman and Chief Executive
Officer of Agrify. “After a difficult FY 2022, we have reexamined
our business model, explored our strategic options, and reevaluated
our product offerings to better serve our customers. In terms of
the strategic changes, our top priorities have been: (1)
restructuring our debts; (2) reducing our costs and headcount; (3)
improving our product offerings; and (4) getting some of our key
products CE-certified for the international markets. We believe
that we have made strong progress in all four of these areas and
will continue to prioritize these efforts. The historical
acquisitions of the four extraction companies continue to add
value, as the combination of Agrify, Precision Extraction
Solutions, Pure Pressure, Lab Society, and Cascade Sciences allows
us to offer a comprehensive portfolio of cultivation and extraction
technologies to our customers. Now that the four acquired companies
are completely integrated into Agrify, we believe the synergies are
showing and will become even more robust in 2024.”
First Quarter 2023 Financial Results
Summary
- Revenue was $5.8 million for Q1
2023, compared to $26.0 million for the first quarter of 2022 (“Q1
2022”).
- Gross profit for Q1 2023 was $1.0
million, compared to $4.2 million in Q1 2022.
- Operating expenses were $8.6
million for Q1 2023, compared to $13.9 million in Q1 2022. The
decrease was largely due to a decrease in general and
administrative costs.
- Operating loss for Q1 2023 was $7.6
million, compared to $9.8 million for Q1 2022.
- Net loss attributable to Agrify for
Q1 2023 was $10.3 million, or $9.63 per diluted share, compared to
net income of $1.8 million, or $13.79 per diluted share for Q1
2022.
Fiscal Year 2022 Financial Results
Summary
- Revenue was $58.3 million for FY
2022, a decrease of 2.7% compared to $59.9 million for the fiscal
year ended December 31, 2021 (“FY 2021”).
- Gross profit for FY 2022 was a loss
of $31.8 million, compared to a profit of $5.2 million in FY
2021.
- Operating expenses were $161.5
million for FY 2022, compared to $40.3 million in FY 2021. The
increase in operating expenses is largely attributable to $69.9
million of impaired goodwill and $39.0 million of bad debt
expenses.
- Operating loss for FY 2022 was
$193.3 million, compared to $35.1 million for FY 2021.
- Net loss attributable to Agrify for
FY 2022 was $188.2 million, or $902.19 per share, compared to a net
loss of $32.5 million, or $340.75 per share, for FY 2021.
Recent Business Highlights:
Extraction Division
Agrify launched the Cannabeast 13 Distillation
System – the Cannabeast 13 Thin Film Distillation System
transitioned from its initial sale to SkyMint in 2022 to an
official production launch in Q1 2023. Notably, this technology
gained traction with three sales to major Multi-State Operators
(MSOs), including Trulieve, Ascend Wellness, and MariMed,
underscoring its growing appeal within the industry. The
Cannabeast 13 offers 1-8 liters per hour input feed capability
designed solely around distilling high boiling point compounds
coupled with low boiling point constituents in feed stock to
streamline and maximize throughput.
In addition, Agrify launched the PX30
Hydrocarbon Extraction System, the largest member of the PX Series.
The PX30 has a 30 pound capacity and a runtime of less than 60
minutes, making it one of the largest and fastest extractors on the
market. This robust system is poised to offer enhanced capabilities
for hydrocarbon extraction, catering to the demands of commercial
operators focusing on large-scale batch processing and extracting
for creating direct-to-consumer cannabis products.
Lastly, Agrify made significant strides to
receive UL Compliance for EXP Rooms. All of Precision Extraction
Solutions’ EXP Rooms, including the EXP1 and EXP2, meet UL
standards. These rooms are the ideal choice for C1D1 environments,
emphasizing Precision Extraction Solutions’ commitment to safety
and quality within cannabis extraction facilities.
These industry developments illustrate the
continuous innovation, and commitment to safety within the cannabis
sector as our company adapts to evolving market demands.
Cultivation Division
Agrify’s newly commercialized customer, Nevada
Holistic Medicine (“NHM”), located just off of the Las Vegas strip,
is already seeing consistent and successful average harvests of 9
pounds of A-grade flower per Vertical Farming Unit (“VFU”), or
roughly 64 grams per canopy square foot. The NHM team is seeing
90%+ A-grade flower being produced with exceptional color,
trichome, and terpene levels.
Agrify has successfully assisted another
cultivation facility, Denver Greens LLC, to reach commercialization
with 60 VFUs to produce high-quality cannabis products in Colorado.
Denver Greens recently entered a distribution agreement
with Kush Masters, a family run and operated supplier of
high-quality cannabis products in Colorado, with a reputation
of providing products and services since 2014. Under this
distribution agreement, some of Denver Greens’ VFU-grown cannabis
is expected to be available on the market as pre-rolled joints and
flower in approximately 350 Colorado dispensaries.
In addition, Agrify is pleased to announce the
signing of two new customers, Golden Lake Business Park, located in
California, and Harvest Works, located in New Jersey, with both
facilities expected to begin commercialization in 2024.
About Agrify (Nasdaq: AGFY)
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 VFUs enable
cultivators to produce the highest quality products with unmatched
consistency, yield, and ROI at scale. Our comprehensive extraction
product line, which includes hydrocarbon, ethanol, solventless,
post-processing, and lab equipment, empowers producers to maximize
the quantity and quality of extract required for premium
concentrates. For more information, please visit Agrify 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 expected revenue, integration
of prior acquisitions, the timing and ability to launch new
products, potential cost savings realized from reducing costs,
expected long-term growth in the cannabis industry, the ability to
realize revenue from bookings, backlog, pipeline, and specific
transactions described herein, including the agreements with Denver
Greens and Nevada Holistic Medicine, Golden Lake Business Park, and
Harvest Works, project timelines, commercialization timelines for
Agrify’s VFU customers, and Agrify’s ability to deliver solutions
and services. 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 to be filed for the year
ended December 31, 2022 with the SEC, which you will be able to
obtain 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 CORPORATION AND
SUBSIDIARIESConsolidated Statements of
Operations(In thousands, except share and per
share amounts)
|
|
Three Months EndedMarch 31, |
|
|
Years Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
5,804 |
|
|
$ |
26,021 |
|
|
$ |
58,259 |
|
|
$ |
59,859 |
|
Cost of goods sold |
|
|
4,816 |
|
|
|
21,851 |
|
|
|
90,054 |
|
|
|
54,625 |
|
Gross (loss) profit |
|
|
988 |
|
|
|
4,170 |
|
|
|
(31,795 |
) |
|
|
5,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative |
|
|
6,931 |
|
|
|
9,759 |
|
|
|
73,354 |
|
|
|
30,807 |
|
Selling and marketing |
|
|
1,590 |
|
|
|
2,090 |
|
|
|
9,338 |
|
|
|
4,163 |
|
Research and development |
|
|
735 |
|
|
|
2,084 |
|
|
|
8,179 |
|
|
|
3,925 |
|
Change in contingent
consideration |
|
|
(684 |
) |
|
|
— |
|
|
|
(2,156 |
) |
|
|
1,412 |
|
Impairment of property and
equipment |
|
|
— |
|
|
|
— |
|
|
|
2,912 |
|
|
|
— |
|
Impairment of goodwill and
intangible assets |
|
|
— |
|
|
|
— |
|
|
|
69,904 |
|
|
|
— |
|
Total operating expenses |
|
|
8,572 |
|
|
|
13,933 |
|
|
|
161,531 |
|
|
|
40,307 |
|
Loss from operations |
|
|
(7,584 |
) |
|
|
(9,763 |
) |
|
|
(193,326 |
) |
|
|
(35,073 |
) |
Interest (expense) income,
net |
|
|
(799 |
) |
|
|
559 |
|
|
|
(8,750 |
) |
|
|
74 |
|
Other income (expense) |
|
|
4 |
|
|
|
— |
|
|
|
1,316 |
|
|
|
(31 |
) |
Change in fair value of
warrant liabilities |
|
|
2,672 |
|
|
|
10,785 |
|
|
|
51,461 |
|
|
|
— |
|
Gain on forgiveness of PPP
loan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
45 |
|
(Loss) gain on extinguishment
of notes payable |
|
|
(4,620 |
) |
|
|
— |
|
|
|
(38,985 |
) |
|
|
2,685 |
|
Other income (expense), net |
|
|
(2,743 |
) |
|
|
11,344 |
|
|
|
5,042 |
|
|
|
2,773 |
|
Net (loss) income before income taxes |
|
|
(10,327 |
) |
|
|
1,581 |
|
|
|
(188,284 |
) |
|
|
(32,300 |
) |
Income tax benefit
(expense) |
|
|
— |
|
|
|
200 |
|
|
|
(23 |
) |
|
|
(25 |
) |
Net (loss) income |
|
|
(10,327 |
) |
|
|
1,781 |
|
|
|
(188,307 |
) |
|
|
(32,325 |
) |
(Income) loss attributable to
non-controlling interests |
|
|
— |
|
|
|
(1 |
) |
|
|
134 |
|
|
|
(140 |
) |
Net loss attributable to
Agrify |
|
$ |
(10,327 |
) |
|
$ |
1,780 |
|
|
$ |
(188,173 |
) |
|
$ |
(32,465 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders – basic (1) |
|
$ |
(9.63 |
) |
|
$ |
14.48 |
|
|
$ |
(902.19 |
) |
|
$ |
(340.75 |
) |
Net loss per share
attributable to Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders – diluted (1) |
|
$ |
(9.63 |
) |
|
$ |
13.79 |
|
|
$ |
(902.19 |
) |
|
$ |
(340.75 |
) |
Weighted average commons
shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding – basic (1) |
|
|
1,072,292 |
|
|
|
122,946 |
|
|
|
208,573 |
|
|
|
95,455 |
|
Weighted average commons
shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding – diluted (1) |
|
|
1,072,292 |
|
|
|
129,045 |
|
|
|
208,573 |
|
|
|
95,455 |
|
(1 |
) |
Periods presented have been adjusted to reflect the 1-for-10
reverse stock split on October 18, 2022, and the 1-for-20 reverse
stock split on July 5, 2023. |
AGRIFY CORPORATION AND
SUBSIDIARIESConsolidated Balance
Sheets(In thousands)
|
|
March 31, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Assets |
|
(unaudited) |
|
|
|
|
Cash and cash equivalents |
|
$ |
1,476 |
|
|
$ |
10,457 |
|
Restricted cash |
|
|
— |
|
|
|
10,000 |
|
Marketable securities |
|
|
14 |
|
|
|
460 |
|
Accounts receivable, net |
|
|
1,197 |
|
|
|
1,070 |
|
Inventory, net |
|
|
19,995 |
|
|
|
21,396 |
|
Prepaid expenses and other
current assets |
|
|
2,990 |
|
|
|
1,510 |
|
Total current assets |
|
|
25,672 |
|
|
|
44,893 |
|
|
|
|
|
|
|
|
|
|
Loans receivable, net |
|
|
12,806 |
|
|
|
12,214 |
|
Property and equipment,
net |
|
|
9,658 |
|
|
|
10,044 |
|
Right-of-use assets, net |
|
|
2,343 |
|
|
|
2,210 |
|
Other non-current assets |
|
|
153 |
|
|
|
326 |
|
Total assets |
|
$ |
50,632 |
|
|
$ |
69,687 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
21,128 |
|
|
$ |
20,543 |
|
Accrued expenses and other
current liabilities |
|
|
12,636 |
|
|
|
16,380 |
|
Operating lease liabilities,
current |
|
|
798 |
|
|
|
734 |
|
Long-term debt, current |
|
|
2,084 |
|
|
|
28,833 |
|
Deferred revenue |
|
|
3,239 |
|
|
|
4,112 |
|
Total current liabilities |
|
|
39,885 |
|
|
|
70,602 |
|
Warrant liabilities |
|
|
3,313 |
|
|
|
5,985 |
|
Operating lease liabilities,
net of current |
|
|
1,707 |
|
|
|
1,587 |
|
Long-term debt, net of
current |
|
|
22,554 |
|
|
|
407 |
|
Other non-current
liabilities |
|
|
112 |
|
|
|
147 |
|
Total liabilities |
|
|
67,571 |
|
|
|
78,728 |
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
|
Common stock (1) |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
240,304 |
|
|
|
237,875 |
|
Accumulated deficit |
|
|
(257,475 |
) |
|
|
(247,148 |
) |
Total stockholders deficit |
|
|
(17,170 |
) |
|
|
(9,272 |
) |
Non-controlling interests |
|
|
231 |
|
|
|
231 |
|
Total liabilities and stockholders’ equity |
|
$ |
50,632 |
|
|
$ |
69,687 |
|
(1 |
) |
Periods presented have been adjusted to reflect the 1-for-10
reverse stock split on October 18, 2022, and the 1-for-20 reverse
stock split on July 5, 2023. |
AGRIFY CORPORATION AND
SUBSIDIARIESCondensed Consolidated Cash Flows
Data(In thousands)
|
|
3 Months ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Cash flows (used in)
provided by: |
|
(unaudited) |
|
|
|
|
Operating activities |
|
$ |
(9,469 |
) |
|
$ |
(30,875 |
) |
Investing activities |
|
|
9,795 |
|
|
|
(13,365 |
) |
Financing activities |
|
|
(9,307 |
) |
|
|
87,431 |
|
Net (decrease) increase in
cash and cash equivalents |
|
$ |
(8,981 |
) |
|
$ |
43,191 |
|
|
|
12 Months ended |
|
|
|
Dec 31, |
|
|
Dec 31, |
|
|
|
2022 |
|
|
2021 |
|
Cash flows (used in)
provided by: |
|
|
|
|
|
|
Operating activities |
|
$ |
(72,021 |
) |
|
$ |
(30,149 |
) |
Investing activities |
|
|
(2,317 |
) |
|
|
(104,740 |
) |
Financing activities |
|
|
72,781 |
|
|
|
138,792 |
|
Net (decrease) increase in
cash and cash equivalents |
|
$ |
(1,557 |
) |
|
$ |
3,903 |
|
|
Non-GAAP Financial Measures
To supplement our financial information
presented in accordance with generally accepted accounting
principles in the United States, or U.S. GAAP, we use Adjusted
EBITDA, which is a non-U.S. GAAP financial measure to clarify and
enhance an understanding of past performance. We believe that the
presentation of Adjusted EBITDA enhances an investor’s
understanding of our financial performance. We further believe that
Adjusted EBITDA is a useful financial metric to assess our
operating performance from period-to-period by excluding certain
items that we believe are not representative of our core business.
We use certain financial measures for business planning purposes,
measuring our performance relative to that of our competitors and
determining our compliance with certain debt instruments. We
utilize Adjusted EBITDA as a key measure of our performance.
We calculate Adjusted EBITDA as net loss
adjusted to exclude (i) tax provision and benefit; (ii) interest
income and expense, net; (iii) other income and expense, net; (iv)
depreciation and amortization; (v) stock-based compensation
expense; (vi) acquisition-related expenses; (vii) investment banker
termination fees; (viii) restructuring charges; (ix) impairments to
long-lived assets; (x) gains and losses associated with the
extinguishment of debt; (xi) changes in the fair value of warrant
liabilities; (xii) changes in contingent consideration; (xiii)
legal settlement charges; and (xiv) other items affecting our
results that we do not view as representative of our ongoing
operations, including losses associated with write-offs.
We believe Adjusted EBITDA is commonly used by
investors to evaluate our performance and that of our competitors.
However, our use of the term Adjusted EBITDA may vary from that of
others in our industry. Adjusted EBITDA should not be considered as
an alternative to net loss before taxes, net loss, loss per share
or any other performance measures derived in accordance with U.S.
GAAP as measures of performance.
Adjusted EBITDA has important limitations as an
analytical tool and you should not consider it in isolation or as a
substitute for analysis of our results as reported under U.S. GAAP.
Some of the limitations of Adjusted EBITDA include (i) Adjusted
EBITDA does not properly reflect capital commitments to be paid in
the future, and (ii) although depreciation and amortization are
non-cash charges, the underlying assets may need to be replaced and
Adjusted EBITDA does not reflect these capital expenditures. Our
public offering and acquisition-related expenses, including legal,
accounting, and other professional expenses, reflect cash
expenditures and we expect such expenditures to recur from
time-to-time. Our Adjusted EBITDA may not be comparable to
similarly titled measures of other companies because they may not
calculate Adjusted EBITDA in the same manner as we calculate the
measure, limiting its usefulness as a comparative measure.
In evaluating Adjusted EBITDA, you should be
aware that in the future we will incur expenses similar to the
adjustments in this presentation. Our presentation of Adjusted
EBITDA should not be construed as an inference that our future
results will be unaffected by these expenses or any unusual or
non-recurring items. Adjusted EBITDA should not be considered as an
alternative to loss before benefit from income taxes, net loss,
earnings per share, or any other performance measures derived in
accordance with U.S. GAAP. When evaluating our performance, you
should consider Adjusted EBITDA alongside other financial
performance measures, including our net loss and other GAAP
results.
The following table presents a reconciliation of
Adjusted EBITDA from the most comparable GAAP measure, net loss,
for the three--month periods ended March 31, 2023 and 2022 and the
fiscal years ended December 31, 2022 and 2021, respectively:
AGRIFY CORPORATION AND
SUBSIDIARIESReconciliation of GAAP Net Income
(Loss) Attributable to Agrify Corporation to
Non-GAAP Adjusted EBITDA(In
thousands)
|
|
Three Months Ended March 31, |
|
|
Years EndedDecember 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to Agrify Corporation |
|
$ |
(10,327 |
) |
|
$ |
1,780 |
|
|
$ |
(188,173 |
) |
|
$ |
(32,465 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense |
|
|
— |
|
|
|
(200 |
) |
|
|
23 |
|
|
|
25 |
|
Interest expense (income) |
|
|
799 |
|
|
|
(559 |
) |
|
|
8,750 |
|
|
|
(74 |
) |
Other (income) expense |
|
|
(4 |
) |
|
|
— |
|
|
|
(1,316 |
) |
|
|
31 |
|
Depreciation and
amortization |
|
|
445 |
|
|
|
1,052 |
|
|
|
3,047 |
|
|
|
1,310 |
|
Stock-based compensation |
|
|
859 |
|
|
|
953 |
|
|
|
4,319 |
|
|
|
5,552 |
|
Investment banker termination
fees |
|
|
— |
|
|
|
637 |
|
|
|
— |
|
|
|
2,400 |
|
Acquisition- related
expenses |
|
|
— |
|
|
|
637 |
|
|
|
2,251 |
|
|
|
4,559 |
|
Restructuring charges |
|
|
— |
|
|
|
387 |
|
|
|
2,262 |
|
|
|
— |
|
Impairment charges |
|
|
— |
|
|
|
— |
|
|
|
72,816 |
|
|
|
— |
|
Loss (gain) on debt
extinguishment |
|
|
4,620 |
|
|
|
— |
|
|
|
38,985 |
|
|
|
(2,685 |
) |
Change in fair value of
warrant liabilities |
|
|
(2,672 |
) |
|
|
(10,785 |
) |
|
|
(51,461 |
) |
|
|
— |
|
Change in contingent
consideration |
|
|
(684 |
) |
|
|
— |
|
|
|
(2,156 |
) |
|
|
1,412 |
|
Gain on forgiveness of PPP
loan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45 |
) |
Legal settlement |
|
|
— |
|
|
|
— |
|
|
|
(36 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
(6,964 |
) |
|
$ |
(6,098 |
) |
|
$ |
(110,689 |
) |
|
$ |
(19,980 |
) |
|
Company Contacts
Agrify Investor
RelationsIR@agrify.com(857) 256-8110
Agrify (NASDAQ:AGFY)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Agrify (NASDAQ:AGFY)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024