UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31,2024
or
☐ 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
(Exact name of registrant as specified in its charter)
| Nevada | 30-0943453 |
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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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 |
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| Common Stock, par value $0.001 per share | AGFY | NASDAQ Capital Market |
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Securities Registered Pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐No ☒
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 | ☒ |
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| 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
YES ☐ NO☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2024, was approximately $6.3 million. Shares of the registrant’s common stock held by each officer and director and each person known to the registrant to own 10% or more of the outstanding voting power of the registrant have been excluded in that such persons may be deemed affiliates. This determination of affiliate status is not a determination for other purposes.
There were a total of 1,952,032 shares of the registrant’s common stock, par value $0.001 per share, outstanding as of March 17, 2025.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A in connection with the registrant’s 2025 Annual Meeting of Stockholders, to be filed subsequent to the date hereof, are incorporated by reference into Part III of this Report. Such Definitive Proxy Statement will be filed with the SEC not later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, 2024. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K.
TABLE OF CONTENTS
| Page # |
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| PART I |
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| Item 1. | Business | 1 |
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| Item 1A. | Risk factors | 6 |
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| Item 1B. | Unresolved Staff Comments | 24 |
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| Item 1C. | Cybersecurity | 24 |
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| Item 2. | Properties | 25 |
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| Item 3. | Legal Proceedings | 25 |
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| Item 4. | Mine Safety Disclosures | 25 |
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| PART II |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 26 |
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| Item 6. | [Reserved] | 26 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 43 |
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| Item 8. | Financial Statements and Supplementary Data | 43 |
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| Item 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure | 43 |
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| Item 9A. | Controls and Procedures | 43 |
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| Item 9B. | Other Information | 44 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. | 44 |
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| PART III |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 45 |
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| Item 11. | Executive Compensation | 45 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 45 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 45 |
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| Item 14. | Principal Accounting Fees and Services | 45 |
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| PART IV |
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| Item 15. | Exhibits and Financial Statement Schedules | 46 |
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| Signatures | 51 | |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements and information relating to Agrify Corporation. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include statements relating to:
| ● | the effects of increased competition as well as innovations by new and existing competitors in our market; |
| ● | our ability to retain our existing customers and to increase our number of customers; |
| ● | our ability to effectively manage or sustain our growth; |
| ● | integration of complementary businesses and technologies; |
| ● | our ability to maintain, or strengthen awareness of, our brand; |
| ● | future revenue, hiring plans, expenses, capital expenditures, and capital requirements; |
| ● | our ability to comply with new or modified laws and regulations that currently apply or become applicable to our business; |
| ● | the loss of key employees or management personnel; |
| ● | our financial performance and capital requirements; and |
| ● | our ability to maintain, protect, and enhance our intellectual property. |
We caution you that the foregoing list may not contain all of the forward-looking statements made in this report. 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 financial condition, results of operations, business strategy, short term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” section of this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.
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SUMMARY OF RISK FACTORS
Below is a summary of the principal factors that make an investment in our Common Stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors”, and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC before making an investment decision regarding our Common Stock.
| ● | our short operating history, and our ability to obtain additional financing; |
| ● | risks associated with strategic acquisitions, strategic alliances, divestitures and other transactions; |
| ● | we have substantial debt and other financial obligations, and we may incur even more debt; |
| ● | our sales are difficult to forecast and we may be subject to growth-related risks; |
| ● | our reliance on third parties for certain products sold to customers; |
| ● | risks of product liability and similar claims; |
| ● | our products may be subject to product recalls; |
| ● | our reliance on the continued contributions of personnel employed by Green Thumb and other qualified personnel; |
| ● | our reliance on third parties to provide numerous operating capabilities; |
| ● | our ability to protect our core technology and intellectual property and defend against intellectual property claims; |
| ● | our ability to use net operating losses; |
| ● | risks associated with the ability of our co-manufacturers to comply with food safety, environmental or other laws and regulations, and with the specifications of our products; |
| ● | risks associated with consumer acceptance of our brand portfolio and constraints on our ability to market our products; |
| ● | risks associated with the lack of diversification of our business and asset portfolio; |
| ● | risks related to our products and associated with an immature industry; |
| ● | risk associated with third party business partners and their perception of reputational risk; |
| ● | the competition from the illicit market and larger competitors; |
| ● | risks associated with the public opinion and perception of the cannabis and hemp industries; |
| ● | the potential for hemp-derived products to have negative health and/or safety impacts on consumers; |
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| ● | the federal laws and regulations around hemp-derived products, the risk that the continued beneficial legislative development is not guaranteed, and existing regulations may be enforced against hemp-derived products; |
| ● | risks of state laws regulating, restricting or prohibiting hemp-derived products. |
| ● | risks associated with fraudulent, illegal or improper actions by business partners, employees or agents; |
| ● | opposition from other industries towards the cannabis and hemp industries; |
| ● | the legality of cannabis and/or hemp could be reversed in one or more states; |
| ● | risks associated with changing legislation and interpretations of law; |
| ● | risks associated with client licensing; |
| ● | banking regulations that could limit access to banking services; |
| ● | risks associated with insurance coverage and uninsurable risks; |
| ● | the nature of the evolving industry; |
| ● | risks associated with the concentration of ownership of our Common Stock; |
| ● | the potential for a large number of shares eligible for public sale could depress the market price of our Common Stock; |
| ● | our failure to meet the continued listing requirements of The Nasdaq Capital Market (“Nasdaq”) could result in a de-listing of our Common Stock; |
| ● | the exercise of all or any number of outstanding warrants may dilute your holding of shares of our Common Stock; |
| ● | provisions in our charter documents and Nevada law may prevent a change in control of our company; |
| ● | the impact of reduced disclosure requirements under the JOBS Act on investors; |
| ● | we have no intention to declare any dividends to our shareholders; |
| ● | our obligations to develop and maintain effective internal controls over financial reporting; |
| ● | material weaknesses and ability to remediate them; |
| ● | risks associated with increases in costs or shortages of raw materials; |
| ● | litigation that may adversely affect our business, financial condition, and results of operations; |
| ● | liquidity of our Common Stock; |
| ● | increasing costs and demands upon management as a result of complying with public company regulations; |
| ● | risks related to trading ability of our Common Stock if our shares become subject to penny stock rules; |
| ● | inherent risks related to our financial and operational projections; |
| ● | risks related to analyst reports about us, our business or our market, or recommendations relating to our stock. |
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MARKET, INDUSTRY AND OTHER DATA
Unless otherwise indicated, information contained in this Annual Report on Form 10-K concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources and on our knowledge of the markets for our services. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified any third-party information and cannot assure you of its accuracy or completeness. While we believe the market position, market opportunity and market size information included in this report is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere in this report. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
In addition, we own or have rights to trademarks or trade names that we use in connection with the operation of our business, including our corporate names, logos, and website names. In addition, we own or have the rights to copyrights, trade secrets and other proprietary rights that protect the content of our products. This report may also contain trademarks, service marks and trade names of other companies, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this report is not intended to, and should not be read to, imply a relationship with or endorsement or sponsorship of us. Solely for convenience, some of the copyrights, trade names and trademarks referred to in this report are listed without their ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks. All other trademarks are the property of their respective owners.
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