TROY, Mich. - Agrify Corporation (NASDAQ:AGFY), a prominent developer of solutions for the cannabis and hemp industries with a market capitalization of $53 million, has finalized the sale of its cultivation segment to CP Acquisitions, LLC, a firm linked to Agrify’s former CEO, Raymond (NS:RYMD) Chang. The company’s stock has shown remarkable momentum, delivering a 479% return over the past six months. The transaction, completed on December 31, 2024, includes the transfer of Agrify’s Vertical Farming Units, total-turnkey solution assets, and Agrify Insights software solutions, collectively known as the Cultivation Business.
The agreement also entails CP Acquisitions taking on related cultivation liabilities and the termination of two convertible notes held by CP, valued at around $7 million. This strategic move aims to streamline Agrify’s business model, allowing the company to concentrate on its burgeoning THC beverage sector, including its Señorita brand—a leader in THC-infused margaritas. According to InvestingPro data, the company currently operates with a moderate debt level, with a debt-to-capital ratio of 0.14, though it faces challenges with cash burn.
Ben Kovler, Agrify’s Chairman and Interim CEO, remarked on the sale’s alignment with the company’s goal to focus on growth categories tied to THC demand. He highlighted the success of Señorita, an award-winning THC Margarita, as an example of the company’s promising future in the hemp-derived THC Delta 9 (HD9) beverage market. Señorita is recognized for its natural ingredients, low sugar, and low-calorie content, offering an alternative to alcoholic drinks.
The former Chairman and CEO, Raymond Chang, expressed his enthusiasm for continuing the cultivation business, emphasizing that the separation of business segments will enable both parties to better focus their efforts.
Agrify’s Señorita brand is currently available in nine U.S. states and Canada, with plans for expansion into premier on-premises locations. The products are also sold directly to consumers online where state laws permit.
This press release includes forward-looking statements regarding Agrify’s expectations about future financial results, growth opportunities, expansion plans, and trends in the hemp-derived beverage market. While analysts anticipate sales growth of 4.58% for the current year, InvestingPro analysis indicates the company faces significant challenges with a weak overall financial health score. Investors seeking deeper insights into Agrify’s prospects can access 18 additional ProTips and comprehensive financial metrics through InvestingPro’s advanced analytics platform. The information provided is based on a press release statement.
In other recent news, Agrify Corporation has undergone significant changes in its financial and leadership structure. The company recently announced the departure of Brian Towns, the Executive Vice President and General Manager of Agrify’s Extraction Division. Towns’ resignation, effective from early December, leaves a gap in the company’s leadership, with a successor yet to be named.
In financial developments, Agrify secured approximately $25.9 million in a private placement deal. This funding is intended to bolster the company’s corporate activities and business development. Simultaneously, Agrify expanded its borrowing capacity by amending its Junior Note with CP Acquisitions, LLC, effectively doubling the maximum principal from $1.5 million to $3 million.
The company also implemented a 1-for-15 reverse stock split, aiming to meet Nasdaq’s minimum bid price requirement for sustained listing. In addition, Agrify has committed to payments totaling $2 million to Mack Molding Company, agreeing to purchase a minimum of 50 Vertical Farming Units.
In terms of partnerships, Agrify has entered a $500,000 agreement with Grotech Farms LLC for a comprehensive hydrocarbon extraction and lab equipment package. Moreover, the company has joined forces with Justice Cannabis Co. to facilitate their expansion into the New Jersey market. These developments reflect Agrify’s ongoing efforts to grow and broaden its market reach.
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