UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-39946

AGRIFY CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		30-0943453
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2468 Industrial Row Dr.

Troy, Michigan 48084

(Address of principal executive offices, including zip code)

(855) 420-0020

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		AGFY		NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐ NO ☒

As of May 13, 2024, the registrant had 14,229,386 shares of common stock, $0.001 par value per share outstanding.

EXPLANATORY NOTE

References throughout this Amendment No. 1 to the Quarterly Report on Form 10-Q to “we,” “us,” the “Company” or “our company” are to Agrify Corporation.

This Amendment No. 1 (“Amendment No. 1”) to the Quarterly Report on Form 10-Q/A amends the Quarterly Report on Form 10-Q of Agrify Corporation for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission (“SEC”) on May 21, 2024 (the “Original Filing”).

On August 12, 2024, the Audit Committee of the Board of Directors (the “Audit Committee”) of Agrify Corporation (the “Company”), in consultation with management of the Company and the Company’s independent registered public accounting firm, GuzmanGray (“GuzmanGray”), concluded that the Company’s previously issued unaudited condensed consolidated interim financial statements as of and for the fiscal period ended March 31, 2024 included in the Company’s Quarterly Reports on Form 10-Q for such period should no longer be relied upon. Similarly, earnings releases, and investor communications describing the financial statements for the periods described above should no longer be relied upon. The Company identified an error in the accounting for a settlement agreement with a vendor which was effective in the first quarter of 2024.

As such, the Company is restating in this Form 10-Q/A the unaudited consolidated interim financial statements for the three-month period ended March 31, 2024.

We are filing this Amendment No. 1 to amend and restate the Original Filing with modification as necessary to reflect the restatement. The following items have been amended to reflect the restatement:

Part I, Item 1, Financial Information

Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	1

ITEM 1.	FINANCIAL STATEMENTS	1

	Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	1

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 (unaudited) and 2023 (unaudited)	2

	Condensed Consolidated Statements of Stockholders’ Deficit for the three months ended March 31, 2024 (unaudited) and 2023 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 (unaudited) and 2023 (unaudited)	5

	Notes to the Condensed Consolidated Financial Statements	6

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	44

ITEM 4.	CONTROLS AND PROCEDURES	45

PART II	OTHER INFORMATION	46

ITEM 1.	LEGAL PROCEEDINGS	46

ITEM 1A.	RISK FACTORS	46

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	46

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	46

ITEM 4.	MINE SAFETY DISCLOSURES	46

ITEM 5.	OTHER INFORMATION	46

ITEM 6.	EXHIBITS	46

SIGNATURES		47

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

AGRIFY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31,
	2024 (As Restated)			December 31, 2023
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	95		$	430
Marketable securities		4			4
Accounts receivable, net of allowance for credit losses of $2,512 and $1,887 at March 31, 2024 and December 31, 2023, respectively		211			1,149
Inventory, net of reserves of $17,184 and $17,599 at March 31, 2024 and December 31, 2023, respectively		18,648			19,094
Loan receivable, current		692			—
Prepaid expenses and other current assets		1,028			3,332
Total current assets		20,678			24,009
Loan receivable, net of allowance for credit losses of $18,885 and $19,215 at March 31, 2024 and December 31, 2023, respectively, net of current		10,891			11,583
Property and equipment, net		7,328			7,734
Operating lease right-of-use assets		1,651			1,803
Other non-current assets		99			141
Total assets	$	40,647		$	45,270
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	12,778		$	20,766
Accrued expenses and other current liabilities		7,843			10,655
Operating lease liabilities, current		615			599
Long-term debt, current		696			766
Related party debt, current		1,000			4,444
Contract liabilities		3,784			4,019
Total current liabilities		26,716			41,249
Warrant liabilities		417			1,290
Operating lease liabilities, net of current		1,235			1,394
Related party debt, net of current		17,683			—
Long-term debt, net of current		47			16,047
Total liabilities		46,098			59,980

Commitments and contingencies (Note 14)

Stockholders’ deficit:
Common Stock, $0.001 par value per share, 35,000,000 and 10,000,000 shares authorized at March 31, 2024 and December 31, 2023, respectively, 13,275,702 and 1,702,243 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively ⁽¹⁾		13			2
Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding		—			—
Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding		—			—
Additional paid-in capital		255,867			250,855
Accumulated deficit		(261,561	)		(265,797	)
Total stockholders’ deficit attributable to Agrify		(5,681	)		(14,940	)
Non-controlling interests		230			230
Total liabilities and stockholders’ deficit	$	40,647		$	45,270

(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

The accompanying notes are an integral part of these condensed consolidated financial statements.

AGRIFY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three months ended March 31,
	2024 (As restated)			2023
Revenue (including $0 and $46 from related parties, respectively)	$	2,598		$	5,804
Cost of goods sold		2,433			4,816
Gross profit		165			988

General and administrative		4,094			6,931
Selling and marketing		462			1,590
Research and development		275			735
Gain on settlement of contingent liabilities		(5,935	)		—
Change in contingent consideration		(2,180	)		(684	)
Total operating expenses		(3,284	)		8,572
Operating income (loss)		3,449			(7,584	)
Interest expense, net		(100	)		(799	)
Change in fair value of warrant liabilities		873			2,672
Loss on extinguishment of long-term debt, net		—			(4,620	)
Other income, net		14			4
Total other income (expense), net		787			(2,743	)
Net income (loss) before income taxes		4,236			(10,327	)
Income tax benefit (expense)		—			—
Net income (loss)		4,236			(10,327	)
Net income (loss) attributable to Agrify Corporation	$	4,236		$	(10,327	)
Net income (loss) per share attributable to Common Stockholders – basic (1)	$	0.48		$	(9.63	)
Net income (loss) per share attributable to Common Stockholders – diluted (1)	$	0.23		$	(9.63	)
Weighted average common shares outstanding - basic		8,894,229			1,072,292
Weighted average common shares outstanding - diluted		19,960,605			1,072,292

(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.

The accompanying notes are an integral part of these condensed consolidated financial statements.

AGRIFY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands)

(Unaudited)

	Common Stock				Preferred Stock				Preferred A Stock				Additional Paid-In-		Accumulated			Total Stockholders’ Deficit attributable to			Non- Controlling		Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Agrify			Interests		Deficit
Balance at January 1, 2023		1,038,298	$	1		—	$	—		—	$	—	$	237,875	$	(247,148	)	$	(9,272	)	$	231	$	(9,041	)
Stock-based compensation		—		—		—		—		—		—		859		—			859			—		859
Issuance of Common Stock through an “at the market” offering, net of fees		323,082		—		—		—		—		—		1,545		—			1,545			—		1,545
Issuance of Common Stock to Pure Pressure		366		—		—		—		—		—		—		—			—			—		—
Vesting of restricted stock units		17		—		—		—		—		—		—		—			—			—		—
Proceeds from Employee Stock Purchase Plan Shares		2,500		—		—		—		—		—		25		—			25			—		25
Net loss		—		—		—		—		—		—		—		(10,327	)		(10,327	)		—		(10,327	)
Balance March 31, 2023		1,364,263	$	1		—	$	—		—	$	—	$	240,304	$	(257,475	)	$	(17,170	)	$	231	$	(16,939	)

	Common Stock				Preferred Stock				Preferred A Stock				Additional Paid-in-			Accumulated Deficit			Total Stockholders’ Deficit attributable to Agrify			Non- Controlling		Total Stockholders’ Deficit
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			(As restated)			(As restated)			Interests		(As restated)
Balance at January 1, 2024		1,701,243	$	2		—	$	—		—	$	—	$	250,855		$	(265,797	)	$	(14,940	)	$	230	$	(14,710	)
Stock-based compensation		—		—		—		—		—		—		490			—			490			—		490
Issuance of Common Stock and prefunded warrants through public offering		2,760,000		3		—		—		—		—		2,120			—			2,123			—		2,123
Issuance of held-back shares from Sinclair acquisition		588		—		—		—		—		—		—			—			—			—		—
Cashless exercise of High Trail Warrants		3,132,217		3		—		—		—		—		(3	)		—			—			—		—
Exercise of Prefunded Warrants issued through public offering		3,010,000		3		—		—		—		—		—			—			3			—		3
Conversion of Convertible Note		2,671,633		2		—		—		—		—		1,729			—			1,731			—		1,731
Contribution from troubled debt restructuring with related party		—		—		—		—		—		—		676			—			676			—		676
Stock split share adjustment		21		—		—		—		—		—		—			—			—			—		—
Net loss		—		—		—		—		—		—		—			4,236			4,236			—		4,236
Balance March 31, 2024		13,275,702	$	13		—	$	—		—	$	—	$	255,867		$	(261,561	)	$	(5,681	)	$	230	$	(5,451	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

AGRIFY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	For the three months ended March 31,
	2024 (As restated)			2023
Cash flows from operating activities:
Net income (loss) attributable to Agrify Corporation	$	4,236		$	(10,327	)
Adjustments to reconcile net income (loss) attributable to Agrify Corporation to net cash used in operating activities:
Depreciation and amortization		406			445
Amortization of debt discount		—			147
Amortization of issuance costs		—			24
Amortization of right of use assets		152			(133	)
Stock based compensation expense		490			859
Change in fair value of warrant liabilities		(873	)		(2,672	)
Loss on extinguishment of long-term debt, net		—			4,620
Change in provision for credit losses, net		642			—
Recovery of provision for credit losses		(330	)		—
Change in inventory reserves		(415	)		—
Loss on disposal of property and equipment		2			—
Gain on settlement of contingent liability		(5,935	)		—
Change in accrued acquisition liabilities due to issuance of held-back shares		(2,180	)		—
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		296			(127	)
Inventory		861			1,401
Prepaid expenses and other current assets		2,321			(31	)
Other non-current assets		42			173
Accounts payable		(2,056	)		585
Accrued expenses and other current liabilities		(268	)		(3,744	)
Operating lease liabilities

Amendment: SEC Form 10-Q/A filed by Agrify Corporation