AGRIFORCE GROWING SYSTEMS LTD
For the period ended Sep 30, 2024. Filed Nov 19, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 19, 2024
AVX$4.29+1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001493152-24-031696
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-19.
0001493152-24-046821
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 109 current paragraphs.
85 unchanged; 15 reworded; 8 added; 6 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
The Company is an innovative sustainable technology focused company that strives to innovate and deliver sustainable technology solutions across a wide array of verticals utilization of our proprietary intellectual property to businesses and enterprises through our AgriFORCE™ Solutions division (“Solutions”) and deliver innovative flour products through our AgriFORCE™ Brands division (“Brands”). To this end, we announce the next phase of our transition, highlighted by the intended integration of Bitcoin mining solutions and the ancillary environmental and power-generation benefits that result from engaging in that business. We recognize the potential of Bitcoin and other digital currencies in facilitating sustainable financial transactions and intend to utilize 10-20% of our future capital raised to purchase and hold Bitcoin. In the third quarter of 2024, the Company bought the assets of the Radical Clean Solutions (“RCS”) business for which it had bought an exclusive license to the agricultural industry in 2023. During 2023, the Company launched its UN(THINK) Awakened Flour™, which is a nutritious flour that we believe provides health advantages over traditional flour.
Current report
While Solutions’ legacy focus was to operate in the plant based pharmaceutical, nutraceutical, and other high value crop markets using its unique proprietary facility design and hydroponics based automated growing system that enable cultivators to effectively grow crops in a controlled environment (“FORCEGH+™”). it has changed its focus to broaden the use of its proprietary intellectual property across multiple industries. For instance, the Company through its RCS purchase is not able to utilize that technology to deliver solutions across multiple industries, including not only agriculture, but other industries including hospitality, commercial applications, education institutions, residential real estate and transportation.
Current report
On August 16, 2024, the Company completed the acquisition of 86% of the common shares of Radical Clean Solutions, Inc. (“RCS”), increasing its interest from 14% to 100%, and providing the Company control over RCS. RCS became a consolidated subsidiary of the Company on this date.
Current report
RCS Acquisition
Current report
We purchased all of the assets of RCS in August 2024. A discussion of the acquisition is set forth above in footnote 3 to our financial statements included herein.
Current report
Net cash used in investing activities was $356,079 for cash consideration paid for the RCS acquisition.
Current report
On October 15, 2024, we sold sixteen million shares to two institutional investors at a price per share of $0.05 per share for total proceeds of $800,000. The Shares were registered pursuant to a prospectus supplement on Form 424(b)(4) (to the Registrant’s Prospectus, Registration No. 333-266722, dated August 18, 2022) filed with the SEC on the same day. Each institutional investor (“Purchaser”) is entering into a securities purchase agreement for $400,000 or 8,000,000 common shares at $0.05 per share. Pursuant to those agreements, the Right of Participation held by Purchaser under Section 4.12 of that certain Securities Purchase Agreement dated June 30, 2022 between the Company and the Purchaser is hereby extended to and including December 31, 2025. If the Company shall sell any shares of its Common Stock pursuant to any at-the-market offering or equity line of credit (however denominated), the Company shall use 25% of the net proceeds from any such sales to repay the principal on any outstanding Debentures (as such term is defined in the June 30, 2022 Securities Purchase Agreement) in accordance with the terms of such Debentures.
Current report
From November 7, 2024 through November 13, 2024, the Company issued shares for cash under its at-the-market offering (“ATM”). In total 37,686,239 shares were issued for gross proceeds of $2,116,741.
Removed paragraphs (6)
Previous report
AgriFORCE™ is an “Ag-Tech” company with a primary focus to developing and utilizing our intellectual property assets for improvements dedicated to the agricultural industry. We believe that this goal is best achieved by using our proprietary IP for solutions in the agricultural industry as well as seeking development of new IP to both enhance the technology which we already retain in house as well as development of new technologies which can increase our footprint in the Ag-Tech space with expansion into other areas which have ESG ramifications.
Previous report
The AgriFORCE™ Solutions division is dedicated to transforming modern agriculture through our controlled environment agriculture (“CEA”) equipment, including our FORCEGH+™” solution. We are continuing to modify our business plan to accommodate artificial intelligence and blockchain in the development and implementation of FinTech systems to commercial farmers, and advancing on the commercialization of our Hydroxyl clean room systems to greatly reduce the spread of pathogens, mold and disease at processing facilities worldwide.
Previous report
The Company is developing several finished product prototypes including a line of pancake mixes, which are ready for consumer testing.
Previous report
Successful commercialization of premium specialized products from the UN(THINK)™ foods IP and the capture of a small percentage share of the category is a notable business opportunity for AgriFORCE™.
Previous report
Sources: Future Market Insights Reports, June 2022 (2), October 2022 (1), January 2023 (3) and October 2022 (4)
Previous report
The Company intends to continue development and license its technology to existing farmers in the plant based pharmaceutical, nutraceutical, and high value crop markets using its unique patented facility design and hydroponics based automated growing system that enable farmers to effectively grow crops in a sealed controlled environment (“FORCEGH+™”). The Company has designed FORCEGH+™ facilities to produce crops in virtually any environmental condition and to optimize crop yields to as near their full genetic potential possible while substantially eliminating the need for the use of pesticides, fungicides and/or irradiation. The Company continues to develop its solution for fruits and vegetables focusing on the integration of its current structure with a new form of vertical grow technology.
Reworded paragraphs (15)
Previous wording
Our AgriFORCE™ Brands division is focused on the development and commercialization of plant-based ingredients and products that deliver more nutritious food. We will market and commercialize ingredient supplies, like our Awakened Flour™ and Awakened Grains ™.
Current wording
Brands is focused on the development and commercialization of plant-based ingredients and products that deliver healthier and more nutritious solutions. We strive to market and commercialize both branded consumer product offerings and ingredient supply.
Previous wording
We intend to commercialize these products behind three (2) main sales channels:
Current wording
We intend to commercialize these products behind two (2) main sales channels:
Previous wording
We have a worldwide license to commercialize the proprietary hydroxyl generating devices of Radical Clean Solutions, Inc. (“RCS”) for the CEA and food manufacturing industries. The RCS technology is a product line consisting of patent-pending “smart hydroxyl generation systems” focused on numerous industry verticals that is proven to eliminate 99.99+% of all major pathogens, virus, mold, volatile organic compounds (VOCs) and allergy triggers(6).
Current wording
We own the Radical Clean Solutions, Inc. (“RCS”) technology to commercialize the proprietary hydroxyl generating devices of RCS for the CEA and food manufacturing industries. The RCS technology is a product line consisting of patent-pending “smart hydroxyl generation systems” focused on numerous industry verticals that is proven to eliminate 99.99+% of all major pathogens, virus, mold, volatile organic compounds (VOCs) and allergy triggers(6).
Previous wording
On October 1, 2023, the Company signed a definitive agreement to purchase a 14% ownership stake in RCS.
Current wording
On October 1, 2023, the Company signed a definitive agreement to purchase a 14% ownership stake in RCS, and it purchased all of the RCS assets in August 2024.
Previous wording
On June 4, 2024, the Board of Directors of the Company appointed Jolie Kahn as Chief Executive Officer. Previously, on February 10, 2024, Jolie Kahn was appointed Executive Turnaround Consultant to support the Company’s operational growth and expansion efforts. Jolie Kahn will continue to support these efforts and to report to David Welch, Chairman of the Board of Directors of the Company, who shall act as executive chairman.
Current wording
On June 4, 2024, the Board of Directors of the Company appointed Jolie Kahn as Chief Executive Officer. Previously, on February 10, 2024, Jolie Kahn was appointed Executive Turnaround Consultant to support the Company’s operational growth and expansion efforts. Jolie Kahn will continue to support these efforts and to report to the Board of Directors of the Company.
Previous wording
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Current wording
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Previous wording
During the three and six months ended June 30, 2024, the Company sold and delivered 8 hydroxyl generating devices for gross sales of $41,315. There were no such sales in the three and six months ended June 30, 2023.
Current wording
During the three and nine months ended September 30, 2024, the Company sold and delivered 8 hydroxyl generating devices for gross sales of $41,315. There were no such sales in the three and nine months ended September 30, 2023.
Previous wording
Operating expenses decreased during the three months ended June 30, 2024 as compared to June 30, 2023 by $1,737,754 or 60% primarily due to the following:
Current wording
Operating expenses increased during the three months ended September 30, 2024 as compared to September 30, 2023 by $3,974,421 or 244% primarily due to the following:
Previous wording
Operating expenses decreased during the six months ended June 30, 2024 as compared to June 30, 2023 by $3,251,158 or 57% primarily due to the following:
Current wording
Operating expenses increased during the nine months ended September 30, 2024 as compared to September 30, 2023 by $722,802 or 10% primarily due to the following:
Previous wording
Other expense for the six months ended June 30, 2024 increased due to the following:
Current wording
Other expense for the nine months ended September 30, 2024 increased due to the following:
Previous wording
The Company’s primary need for liquidity is to fund working capital requirements, capital expenditures, and for general corporate purposes. The Company’s ability to fund operations and make planned capital expenditures and debt service obligations depends on future operating performance and cash flows, which are subject to prevailing economic conditions, financial markets, business and other factors. We have recorded a net loss of $7,559,799 for the six months ended June 30, 2024, and a net loss of $4,247,025 for the six months ended June 30, 2023. We have recorded an accumulated deficit of $52,067,103 as of June 30, 2024 and $44,507,304 as of December 31, 2023. Net cash used in operating activities for the six months ended June 30, 2024 and June 30, 2023 was $2,228,537 and $4,339,996 respectively.
Current wording
The Company’s primary need for liquidity is to fund working capital requirements, capital expenditures, and for general corporate purposes. The Company’s ability to fund operations and make planned capital expenditures and debt service obligations depends on future operating performance and cash flows, which are subject to prevailing economic conditions, financial markets, business and other factors. We have recorded a net loss of $13,407,164 for the nine months ended September 30, 2024, and a net loss of $7,740,078 for the nine months ended September 30, 2023. We have recorded an accumulated deficit of $57,914,468 as of September 30, 2024 and $44,507,304 as of December 31, 2023. Net cash used in operating activities for the nine months ended September 30, 2024 and September 30, 2023 was $3,429,189 and $5,437,592 respectively.
Previous wording
The Company held $2,937,496 in cash at June 30, 2024 as compared to $3,878,578 at December 31, 2023.
Current wording
The Company held $1,373,294 in cash as at September 30, 2024 as compared to $3,878,578 at December 31, 2023.
Previous wording
The net cash used by operating activities for the six months ended June 30, 2024 was $2,228,537 compared to $4,339,996 for the six months ended June 30, 2023. The decrease of $2,111,459 was primarily due to the following:
Current wording
The net cash used by operating activities for the nine months ended September 30, 2024 was $3,429,189 compared to $5,437,592 for the nine months ended September 30, 2023. The decrease of $2,008,403 was primarily due to the following:
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2024, represents net proceeds from debentures of $2,250,000. This was partially offset by repayments on convertible debentures of $802,282 and financing costs of debentures of $84,463. Net cash provided by financing activities for the six months ended June 30, 2023, represents net proceeds from debentures of $4,615,385 as well as common shares issued for cash of $565,741. This was partially offset by repayments on convertible debentures of $1,741,950, financing costs of debentures of $325,962 and share issuance costs of $16,142.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2024, represents net proceeds from debentures of $2,250,000. This was partially offset by repayments on convertible debentures of $802,282 and financing costs of debentures of $84,463. Net cash provided by financing activities for the nine months ended September 30, 2023, represents net proceeds from debentures of $4,615,385 as well as common shares issued for cash of $1,342,915. This was partially offset by repayments on convertible debentures of $1,741,950, financing costs of debentures of $325,962 and share issuance costs of $153,220.
Previous wording
See the footnotes to our unaudited financial statements for the six months ended June 30, 2024 and 2023, included with this quarterly report.
Current wording
See the footnotes to our unaudited financial statements for the nine months ended September 30, 2024 and 2023, included with this quarterly report.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
AgriFORCE Growing Systems Ltd. (“AgriFORCE™” or the “Company”) was incorporated as a private company by Articles of Incorporation issued pursuant to the provisions of theBusiness Corporations Act (British Columbia) on December 22, 2017. The Company’s registered and records office address is at 800 – 525 West 8 th Avenue, Vancouver, British Columbia, Canada, V5Z 1C6.