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, 2023. During the quarter ended
December 31, 2023, the Company achieved its first positive
quarterly net income of approximately $572,000.
Fourth Quarter 2023 Financial Results
Summary
- Revenue was $2.8 million for the
fourth quarter of 2023 compared to $5.9 million for the fourth
quarter of 2022.
- Gross profit was $2.7 million for
the fourth quarter of 2023 compared to a gross loss of $33.5
million for the fourth quarter of 2022.
- Operating loss was $1.5 million for
the fourth quarter of 2023, compared to $60.5 million in the fourth
quarter of 2022.
- Net income for the fourth quarter
of 2024 was $0.572 million, compared to a net loss of $57.94
million in the fourth quarter of 2022.
Fiscal Year 2023 Financial Results
Summary
- Revenue was $16.9 million for the
fiscal year compared to $58.3 million for fiscal year 2022.
- Gross profit for the fiscal year
was at $5.3 million compared to a gross loss of $31.8 million in
fiscal year 2022.
- Operating expenses decreased by 85%
to $24.3 million for fiscal year 2023 compared to $161.5 million in
fiscal year 2022.
- Net loss for fiscal year 2023 was
$18.7 million or $12.51 per diluted share compared to $188.2
million, or $902.19 per diluted share in fiscal year 2022.
“We continued to see improvements and make
progress on our turn-around,” said Raymond Chang, Chairman and
Chief Executive Officer of Agrify. “Despite continuous industry
headwind, we are starting to see a pick-up in capital expenditures,
especially in newly licensed states. This could not come at a
better time, as we continue to see amazing yield and top-quality
flowers produced from our existing TTK facilities. These strong and
undeniable results demonstrate the superiority of our VFU
technology. As such we expect to see more interest in our VFUs both
domestically and internationally. Similarly, our ability to provide
an end-to-end turnkey solution for any type of extraction needs
allows us to win larger and more meaningful projects. In 2023, we
implemented a new policy requiring a 50-75% deposit upfront on all
new sales orders and the remaining before shipment. Although such a
drastic change in our policy resulted in lower top-line growth, it
significantly reduced our receivables and improved our cash
collection. We also dramatically reduced our headcount and cut our
expenses as we consolidated our offices and warehouses down from
seven to three locations. General and administration expenses were
reduced from $73 million in 2022 to $19 million in 2023, with a
further reduction to less than $3 million per quarter in the fourth
quarter of 2023 to align with our current business scale. We also
made conscious efforts to aggressively sell down slow-moving
inventory, especially items which we have taken full or partial
reserves. Lastly, we pursued various legal measures to collect
outstanding receivables and settle various payables and litigation
matters. All these initiatives have helped to boost our fourth
quarter financial results and turnaround of the company.”
Recent Business Highlights
Extraction Division
In the ever-evolving landscape of cannabis
extraction equipment, the demand for reliability paired with
comprehensive support is reaching new heights. Today, operators are
increasingly recognizing the indispensable value of product
warranties and dedicated support, steering clear of the challenges
posed by the fluctuating second-hand market that can lead to costly
downtimes and profit reductions.
As operators nationwide seek sustainable,
long-term solutions, the availability of old second-hand machines
has dwindled. This realization, combined with the imperative for
unwavering reliability, has underscored the critical need for
dependable warranties and ongoing support.
In response to this pivotal industry shift,
Agrify proudly announces its new initiative aimed at delivering
unparalleled service to our esteemed customers. In recent months,
there has been a notable increase in the adoption of our managed
service agreements, as operators prioritize not only top-tier
machinery but also the peace of mind essential for seamless
day-to-day operations.
"Our commitment to excellence extends beyond the
product itself," stated Brian Towns, Executive Vice President &
General Manager at Agrify. "We recognize that operators are
investing in more than just equipment; they are investing in the
reliability and efficiency of their entire operations."
The recent signing of a Letter of Intent (LOI)
with PDS Ventures in Warren, MI, serves as a testament to Agrify’s
dedication to providing holistic solutions. Furthermore, Agrify is
actively in discussions with several other esteemed industry
leaders, cementing its position as a trusted partner in the
cannabis ancillary market, offering both cutting-edge equipment and
unparalleled support services.
With this groundbreaking initiative, operators
can confidently trust that their investments are safeguarded by the
industry's leading warranties and continuous support. As we
navigate this dynamic landscape together, Agrify remains unwavering
in its mission to deliver unmatched quality, reliability, and
innovation to every facet of the cannabis industry.
Cultivation Division
Agrify is thrilled to announce the resounding
success of its inaugural Total Turnkey (TTK) project with Agrify’s
customer, Nevada Holistic Medicine (“NHM”). NHM, now operating at
nearly full capacity, proudly distributes their premium-quality
products under the esteemed StackHouse brand. Since their debut,
StackHouse products have consistently flown off dispensary shelves
statewide, receiving rave reviews.
This milestone underscores the efficacy,
advantage, and value of Agrify's comprehensive solution. Amidst a
flurry of information on the benefits of inter-canopy lighting, a
longstanding feature of all Agrify VFUs, the industry is taking
notice of Agrify’s tech enabled and data driven solutions. With
NHM's cultivation facility serving as a showcase, interest in
Agrify's cutting-edge technology has significantly increased, with
an uptick in tour requests from eager industry enthusiasts.
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. Agrify’s proprietary micro-environment-controlled Vertical
Farming Units (VFUs) enable cultivators to produce the highest
quality products with unmatched consistency, yield, and ROI at
scale. Agrify’s 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, an expected increase in capital
expenditures across the cannabis industry, the relative performance
of Agrify’s equipment compared to competitors, the potential
outcome of discussions with industry leaders, expected long-term
growth in the cannabis industry, the ability to realize revenue
from the bookings, backlog, and pipeline, project timelines, 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 filed for the year ended December 31, 2023 with the SEC,
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 CORPORATION AND SUBSIDIARIES |
Condensed Consolidated Statements of
Operations |
(In thousands, except share and per share
amounts) |
|
|
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
2,859 |
|
$ |
5,890 |
|
$ |
16,868 |
|
$ |
58,259 |
Cost of goods sold |
|
|
143 |
|
|
39,351 |
|
|
11,590 |
|
|
90,054 |
Gross profit |
|
|
2,716 |
|
|
(33,461) |
|
|
5,278 |
|
|
(31,795) |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative |
|
|
2,946 |
|
|
20,118 |
|
|
19,005 |
|
|
73,354 |
Selling and marketing |
|
|
611 |
|
|
2,756 |
|
|
4,134 |
|
|
9,338 |
Research and development |
|
|
430 |
|
|
1,909 |
|
|
2,295 |
|
|
8,179 |
Change in contingent
consideration |
|
|
— |
|
|
(647) |
|
|
(1,322) |
|
|
(2,156) |
Loss (gain) on disposal on
property and equipment |
|
|
206 |
|
|
(27) |
|
|
144 |
|
|
— |
Impairment of property and
equipment |
|
|
|
|
|
2,912 |
|
|
— |
|
|
2,912 |
Impairment of goodwill and
intangible assets |
|
|
— |
|
|
— |
|
|
— |
|
|
69,904 |
Total operating expenses |
|
|
4,193 |
|
|
27,021 |
|
|
24,256 |
|
|
161,531 |
Loss from operations |
|
|
(1,477) |
|
|
(60,482) |
|
|
(18,978) |
|
|
(193,326) |
Interest expense, net |
|
|
(291) |
|
|
(1,345) |
|
|
(1,853) |
|
|
(8,750) |
Change in fair value of
warrant liabilities |
|
|
1,097 |
|
|
4,227 |
|
|
4,695 |
|
|
51,461 |
Gain (loss) on extinguishment
of notes payable |
|
|
320 |
|
|
— |
|
|
(4,311) |
|
|
(38,985) |
Other income (expense),
net |
|
|
925 |
|
|
(190) |
|
|
1,799 |
|
|
1,316 |
Total other income, net |
|
|
2,051 |
|
|
2,692 |
|
|
330 |
|
|
5,042 |
Net loss before income taxes |
|
|
574 |
|
|
(57,790) |
|
|
(18,648) |
|
|
(188,284) |
Income tax benefit
(expense) |
|
|
(2) |
|
|
(285) |
|
|
(2) |
|
|
(23) |
Net income (loss) |
|
|
572 |
|
|
(58,075) |
|
|
(18,650) |
|
|
(188,307) |
(Income) loss attributable to
non-controlling interests |
|
|
— |
|
|
138 |
|
|
1 |
|
|
134 |
Net income (loss) attributable
to Agrify Corporation |
|
$ |
572 |
|
$ |
(57,938) |
|
$ |
(18,649) |
|
$ |
(188,173) |
Net income (loss) per share
attributable to Common Stockholders – basic and
diluted (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.35 |
|
$ |
(429.98) |
|
$ |
(12.51) |
|
$ |
(902.19) |
Weighted average common shares
outstanding – basic and diluted (1) |
|
|
1,649,741 |
|
|
133,526 |
|
|
1,490,871 |
|
|
208,573 |
|
(1) Periods presented have been adjusted to reflect the
1-for-20 reverse stock split on July 5, 2023. Additional
information regarding reverse stock splits may be found in Note 1 –
Overview, Basis of Presentation, and Significant Accounting
Policies, included elsewhere in the notes to the consolidated
financial statements in the 10-K. |
AGRIFY CORPORATION AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
(In thousands) |
|
|
|
Year EndedDecember 31, |
|
|
2023 |
|
2022 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
430 |
|
$ |
10,457 |
Restricted cash |
|
|
— |
|
|
10,000 |
Marketable securities |
|
|
4 |
|
|
460 |
Accounts receivable, net |
|
|
1,149 |
|
|
1,070 |
Inventory, net |
|
|
19,094 |
|
|
21,396 |
Prepaid expenses and other
current assets |
|
|
3,332 |
|
|
1,510 |
Total current assets |
|
|
24,009 |
|
|
44,893 |
|
|
|
|
|
|
|
Loans receivable, net |
|
|
11,583 |
|
|
12,214 |
Property and equipment,
net |
|
|
7,734 |
|
|
10,044 |
Operating lease right-of-use
assets |
|
|
1,803 |
|
|
2,210 |
Other non-current assets |
|
|
141 |
|
|
326 |
Total assets |
|
$ |
45,270 |
|
$ |
69,687 |
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Deficit |
|
|
|
|
|
|
Accounts payable |
|
$ |
20,766 |
|
$ |
20,543 |
Accrued expenses and other
current liabilities |
|
|
10,655 |
|
|
16,380 |
Operating lease liabilities,
current |
|
|
599 |
|
|
734 |
Long-term debt, current |
|
|
766 |
|
|
28,833 |
Related party debt,
current |
|
|
4,444 |
|
|
— |
Deferred revenue |
|
|
4,019 |
|
|
4,112 |
Total current liabilities |
|
|
41,249 |
|
|
70,602 |
Warrant liabilities |
|
|
1,290 |
|
|
5,985 |
Other non-current
liabilities |
|
|
— |
|
|
147 |
Operating lease liabilities,
net of current |
|
|
1,394 |
|
|
1,587 |
Long-term debt, net of
current |
|
|
16,047 |
|
|
407 |
Total liabilities |
|
|
59,980 |
|
|
78,728 |
|
|
|
|
|
|
|
Stockholders’ deficit: |
|
|
|
|
|
|
Common stock (1) |
|
|
2 |
|
|
1 |
Additional paid-in
capital |
|
|
250,855 |
|
|
237,875 |
Accumulated deficit |
|
|
(265,798) |
|
|
(247,148) |
Total stockholders' deficit |
|
|
(14,941) |
|
|
(9,272) |
Non-controlling interests |
|
|
230 |
|
|
231 |
Total liabilities and stockholders’ deficit |
|
$ |
45,270 |
|
$ |
69,687 |
|
(1) Periods presented have been adjusted to reflect the
1-for-20 reverse stock split on July 5, 2023. Additional
information regarding the reverse stock splits may be found in Note
1 – Overview, Basis of Presentation, and Significant Accounting
Policies, included in the notes to the consolidated financial
statements in the 10-K. |
AGRIFY CORPORATION AND SUBSIDIARIES |
Condensed Consolidated Cash Flows Data |
(In thousands) |
|
|
|
Year EndedDecember 31, |
|
|
2023 |
|
2022 |
Cash flows (used in)
provided by: |
|
|
|
|
Operating activities |
|
$ |
(30,974) |
|
$ |
(72,021) |
Investing activities |
|
|
25,174 |
|
|
(2,317) |
Financing activities |
|
|
(4,227) |
|
|
72,781 |
Net (decrease) increase in
cash and cash equivalents |
|
$ |
(10,027) |
|
$ |
(1,557) |
|
|
|
|
|
|
|
Company
Contacts
Agrify Investor
RelationsIR@agrify.com(857) 256-8110
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