TROY, Mich. - Agrify Corporation (NASDAQ:AGFY), a developer of advanced cultivation and extraction solutions for the cannabis and hemp sectors, has announced a private placement deal with institutional and accredited investors, securing approximately $25.9 million. The transaction is set to close today, subject to customary closing conditions.
The private placement was conducted at a price of $22.30 per share, with the company's Chairman and Interim CEO, Benjamin Kovler, also participating by purchasing 10,000 shares at $38.76 each, in accordance with Nasdaq regulations. Investors will receive pre-funded warrants in cases where their ownership in Agrify common stock would surpass 4.99% post-offering.
Agrify intends to deploy the capital for general corporate purposes, which include working capital and business development. Kovler expressed optimism about the investment, citing the capital allocation towards opportunities that align with the company's expertise and the current market trends in the cannabis and hemp industries.
The securities involved in this transaction have not been registered under the Securities Act of 1933, as amended, and are therefore not available for sale in the United States absent registration or an exemption. Agrify has agreed to file a resale registration statement for the common stock and the shares issuable upon the exercise of the warrants within forty-five days upon demand from the investors.
This funding initiative comes as Agrify continues to work towards completing the previously announced Señorita transaction, which is expected to close around the end of the year.
The press release did not constitute an offer to sell or a solicitation of an offer to buy any securities. It also contained forward-looking statements regarding the company's future financial performance and growth opportunities, which are subject to risks and uncertainties that could cause actual results to differ materially.
The information contained in this article is based on a press release statement from Agrify Corporation.
In other recent news, Agrify Corp has made several significant financial and strategic moves. The company has increased its borrowing capacity by amending its Junior Note with CP Acquisitions, LLC, raising the maximum principal from $1.5 million to $3 million. This expansion provides Agrify with additional financial flexibility, although the transaction involves company insiders which may raise questions about the terms of the deal.
Furthermore, Agrify has announced a 1-for-15 reverse stock split, a strategic initiative to comply with Nasdaq's minimum bid price requirement for continued listing. The company has also been granted an additional 180-day period by Nasdaq to regain compliance, a goal they aim to meet potentially through the reverse stock split.
In addition, Agrify has amended its agreement with Mack Molding Company, committing to payments totaling $2 million and agreeing to purchase a minimum of 50 Vertical Farming Units. The company has also secured a $1.5 million loan from CP Acquisitions, LLC, managed by its Chairman and CEO, Raymond (NS:RYMD) N. Chang, and board member, I-Tseng Jenny Chan.
Lastly, Agrify has secured a $500,000 agreement with Grotech Farms LLC for a comprehensive hydrocarbon extraction and lab equipment package and partnered with Justice Cannabis Co. to aid their expansion into the New Jersey market. These are recent developments in Agrify Corp's ongoing efforts to grow and broaden its market reach.
InvestingPro Insights
Agrify Corporation's recent private placement deal aligns with several key insights from InvestingPro. The company's decision to raise $25.9 million through this offering reflects its need for capital, which is underscored by an InvestingPro Tip indicating that Agrify is "quickly burning through cash." This influx of funds will likely help address the company's short-term financial needs, as another tip points out that "short term obligations exceed liquid assets."
The participation of Agrify's Chairman and Interim CEO in the private placement at a higher price than the offering demonstrates confidence in the company's future. This optimism is mirrored in the market's recent response to Agrify, with InvestingPro Data showing a remarkable 936.36% price return over the past month and a 954.26% return over the last three months.
However, investors should note that despite the recent price surge, Agrify faces significant challenges. The company is not profitable over the last twelve months, and analysts do not anticipate profitability this year, according to InvestingPro Tips. Additionally, with a high Price / Book multiple of 9.87 and a market capitalization of $51.61 million, the company's valuation metrics suggest it may be trading at a premium relative to its fundamentals.
For a more comprehensive analysis, InvestingPro offers 19 additional tips on Agrify, providing investors with a deeper understanding of the company's financial health and market position.
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