SEC Form SC 13D filed by Agrify Corporation

UNITED STATES

Securities and exchange commission

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

Agrify Corporation

(Name of Issuer)

Common Stock, $0.001 par value per share

(Title of Class of Securities)

00853E 305

(CUSIP Number)

Bret Kravitz

325 West Huron Street

Suite 700

Chicago, Illinois 60654

(312) 471-6720

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

November 5, 2024

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box ☐.

This Schedule 13D relates to the common stock, $0.001 par value per share (“Common Stock”), of Agrify Corporation (the “Company” or the “Issuer”). The address of the principal executive offices of the Company is 2468 Industrial Row Dr., Troy, Michigan 48084.

For information with respect to the identity and background of each executive officer and director of GTI, For Success Holdings and GTI23, see Schedule A attached hereto. The information required herein with respect to the respective executive officers and directors of GTI, For Success Holdings and GTI23, is provided to the best knowledge of the Reporting Persons.

In aggregate, the Reporting Persons are deemed to have voting and dispositive power over 6,860,274 shares of Common Stock of the Company, for the Purchase Price (as defined in Item 4). The Purchase Price was paid out of the working capital of GTI.

As of the date of this filing, the Reporting Persons have no margin or other loans outstanding secured by Common Stock.

This is the Reporting Persons’ initial Schedule 13D.

Purchase Agreement

RSLGH (sometimes referred to herein as the “Investor”), a subsidiary of Green Thumb, entered into that certain Purchase Agreement (the “Purchase Agreement”), dated November 5, 2024, with Raymond Chang (individually, and as the representative of the Sellers (as defined herein)), Chinwei Wang, I-Tseng Jenny Chan, CP Acquisitions, GIC Acquisition LLC (“GIC”), the RTC3 2020 Irrevocable Trust (“RTC”), M Zion Capital, LLC, M Olivet Capital, LLC and M Cannan Capital, LLC (collectively, the “Sellers”) to purchase Common Stock and warrants to purchase Common Stock held by the Sellers (collectively, the “Sellers Equity”). The Company was not a party to the Purchase Agreement. Specifically, the following shares of Common Stock were transferred to the Purchase Agreement:

In exchange for the Sellers Equity, subject to the other terms and conditions in the Purchase Agreement, the Investor paid the Sellers $18,280,000 (the “Purchase Price”), comprised of a combination of cash and subordinate voting shares of Green Thumb as payment, in three tranches.

In the event any Seller holds any restricted stock units (“Restricted Stock”) or stock options (“Stock Options”) of the Issuer granted under any equity incentive plan of the Issuer or otherwise (the “Equity Awards” and the Common Stock of the Issuer underlying such Equity Awards, the “Award Stock”), such Seller agreed to the following: (i) to promptly transfer the Award Stock to the Investor promptly upon receipt of such Award Stock, (ii) to not sell, assign, encumber or in any other way transfer any of the Award Stock except to the Investor, and (iii) to not exercise any Stock Options unless in connection with transferring the resulting Award Stock to the Issuer with the consent of the Issuer. The Sellers agreed that the Purchase Price constitutes in part consideration for the Award Stock and no further consideration from the Issuer shall be paid in exchange for the Award Stock. There are 23,873 shares of Common Stock subject to Award Stock.

The Purchase Agreement includes customary indemnification, limitations of liability, and representations and warranties. The foregoing summary of the Purchase Agreement does not purport to be complete, and is qualified in its entirety by reference to a copy of the Purchase Agreement that is filed as Exhibit 99.2 hereto.

Convertible Note

On November 5, 2024, the Company issued a Secured Convertible Note (the “Note”) to RSLGH, a subsidiary of Green Thumb. The Note is a secured obligation of the Company and will rank senior to all indebtedness of the Company except for certain indebtedness set forth in the Note. The Note will mature on November 5, 2025 (the “Maturity Date”) and contains a 10.0% annualized interest rate, with interest to be paid on the first calendar day of each September and March while the Note is outstanding, in cash, beginning January 1, 2025. The principal amount of the Note will be payable on the Maturity Date.

The Note imposes certain customary affirmative and negative covenants upon the Company, including covenants relating to corporate existence, indebtedness, liens, distributions, affiliate transactions, and issuance of other notes. If an event of default under the Note occurs, the Investor can elect to redeem the Note for cash equal to the then-outstanding principal amount of the Note (or such lesser principal amount accelerated by the Investor), plus accrued and unpaid interest, including default interest, which accrues at a rate per annum equal to 14% from the date of a default or event of default, or, only in connection with certain events of default.

If the Investor elects to convert the Note, the conversion price per share will be $3.158, subject to customary adjustments for certain corporate events, and the largest number of shares of Common Stock for which the conversion could be exercised is 6,333,122 shares. The conversion of the Note will be subject to certain customary conditions and the receipt of stockholder approval to the extent necessary under Nasdaq listing rules.

Currently, RSLGH is not entitled to convert any portion of the Note, as the Company has not obtained the approval of the shareholders of the Company for such conversion in accordance with Listing Rule 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc. Such approval is not anticipated to be obtained within 60 days of the filing of this Schedule 13D.

The foregoing summary of the Note does not purport to be complete, and is qualified in its entirety by reference to a copy of the Note that is filed as Exhibit 99.3 hereto.

Director and Chief Executive Officer Changes

On November 5, 2024, immediately following the issuance of the Note (the “Effective Time”), Raymond Chang resigned as a member of the Board of Directors (the “Board”) of the Company and any subsidiaries and as President and Chief Executive Officer of the Company, and I-Tseng Jenny Chan resigned as a member of the Board. Mr. Chang’s and Ms. Chan’s resignations did not result from any disagreement regarding the Company’s operations, policies or practices.

At the Effective Time, the Board appointed Benjamin Kovler as a member of the Board and Chairman and appointed Armon Vakili and Richard Drexler as members of the Board.

Other than pursuant to the Purchase Agreement, to which the Company was not a party, there are no arrangements or understandings between Mr. Kovler, Mr. Vakili or Mr. Drexler and any other person pursuant to which they were appointed as directors of the Company, and there are no family relationships between Mr. Kovler, Mr. Vakili or Mr. Drexler and any director or executive officer of the Company.

Effective as of the Effective Time, the Company appointed Benjamin Kovler as its Interim Chief Executive Officer. In this capacity, Mr. Kovler will also serve as principal executive, financial and accounting officer. He will also carry the titles of President, Secretary and Treasurer.

To the extent the actions described herein may be deemed to constitute a “control purpose” with respect to the Securities Exchange Act of 1934, as amended, and the regulations thereunder, the Reporting Persons have such a purpose. Except as noted in this Schedule 13D, the Reporting Persons do not have any plans or proposals, which relate to, or would result in, any of the matters referred to in paragraphs (b) through (j), inclusive of Item (4) of Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their positions and formulate plans or proposals with respect thereto.

Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Common Stock, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in communications with management and the board of directors of the Issuer (the “Board”), engaging in discussions with stockholders of the Issuer or other third parties about the Issuer and the Reporting Persons’ investment, including potential business combinations or dispositions involving the Issuer or certain of its businesses, making recommendations or proposals to the Issuer concerning changes to the capitalization of the Issuer, ownership structure, Board structure (including Board composition), potential business combinations or dispositions involving the Issuer or certain of its businesses, or suggestions for improving the Issuer’s financial and/or operational performance, purchasing additional shares securities of the Issuer, and/or selling some or all of the Investors securities in the Issuer.

The percentages used in this Schedule 13D are calculated based on 1,331,539 shares of Common Stock outstanding as of October 30, 2024.

Because Core Growth is the sole member of RSLGH, Wellness Mgmt is the sole member of Core Growth, For Success Holdings is the sole member of Wellness Mgmt, VCP23 is the sole shareholder of For Success Holdings, GTI23 is the sole member of VCP23, and GTI is the sole shareholder of GTI23 (collectively, other than RSLGH, the “GTI Parties”), the GTI Parties are deemed to share the voting and dispositive power over the shares of Common Stock owned by RSLGH.

The Reporting Persons have not made any transactions in the Common Stock within the past 60 days other than as provided in Item 4 above.

See the disclosure in Item 4 and Item 5 above, which is incorporated into this Item 6, and see the joint filing agreement of the Reporting Persons.

SIGNATURES

After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.

Dated: November 13, 2024

Schedule A

Directors and Executive Officers of Green Thumb Industries Inc.

Directors and Executive Officers of For Success Holdings Company

Directors of GTI23, Inc. (There are no Currently Named Executive Officers)