Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 12, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | AGRIFY CORPORATION | |
Trading Symbol | AGFY | |
Document Type | 10-Q/A | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 132,957 | |
Amendment Flag | true | |
Amendment Description | References throughout this Amendment No. 1 to the Quarterly Report on Form 10-Q to “we,” “us,” the “Company” or “our company” are to Agrify Corporation.This Amendment No. 1 (“Amendment No. 1”) to the Quarterly Report on Form 10-Q/A amends the Quarterly Report on Form 10-Q of Agrify Corporation for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission (“SEC”) on May 16, 2022 (the “Original Filing”).On April 12, 2023, the Audit Committee of the Board of Directors (the “Audit Committee”) of Agrify Corporation (the “Company”), in consultation with management of the Company and the Company’s independent registered public accounting firm, Marcum LLP (“Marcum”), concluded that the Company’s previously issued unaudited condensed consolidated interim financial statements as of and for the fiscal periods ended March 31, 2022, June 30, 2022 and September 30, 2022 included in the Company’s Quarterly Reports on Form 10-Q for such periods, should no longer be relied upon. Similarly, earnings releases, and investor communications describing the financial statements for the periods described above should no longer be relied upon. The Company identified errors in the accounting for warrants previously issued by the Company. Specifically, the Audit Committee concluded 15,081 warrants issued in a private placement on January 28, 2022 and 34,406 warrants issued in a private placement on March 23, 2022 (collectively, the “Warrants”) should have been classified as a liability measured at fair value, with changes in fair value each period reported in earnings, rather than as a component of equity. The change in fair value of the Warrants is a non-cash charge and will be reflected in the Company’s statement of operations. Additionally, debt issuance costs were classified as an asset rather than a liability. The change will be reflected in the Company’s balance sheet. As such, the Company is restating in this Form 10-Q/A the unaudited condensed consolidated interim financial statements for the three-month period ended March 31, 2022.We are filing this Amendment No. 1 to amend and restate the Original Filing with modification as necessary to reflect the restatement. The following items have been amended to reflect the restatement:Part I, Item 1, Financial InformationPart I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of OperationsPart I, Item 4, Controls and ProceduresPart II, Item 1A, Risk FactorsExcept as described above and set forth in this Amendment No. 1, this Amendment No. 1 does not amend or update any other information contained in the Original Filing. This Amendment No. 1 does not purport to reflect any information or events subsequent to the Original Filing, except as expressly described herein. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and with our filings with the SEC subsequent to the Original Filing. | |
Entity Central Index Key | 0001800637 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39946 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 30-0943453 | |
Entity Address, Address Line One | 2468 Industrial Row Dr., | |
Entity Address, City or Town | Troy | |
Entity Address, Country | MA | |
Entity Address, Postal Zip Code | 48084 | |
City Area Code | (617) | |
Local Phone Number | 896-5243 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | No |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 25,205 | $ 12,014 | |
Restricted cash | 30,000 | ||
Marketable securities | 38,211 | 44,550 | |
Accounts receivable, net of allowance for doubtful accounts of $1,415 and $1,415 at March 31, 2022 and December 31, 2021, respectively | 8,571 | 7,222 | |
Inventory, net of reserves of $942 and $942 at March 31, 2022 and December 31, 2021, respectively | 38,989 | 20,498 | |
Prepaid and refundable taxes | 194 | ||
Prepaid expenses and other current assets | 6,448 | 2,452 | |
Total current assets | 147,618 | 86,736 | |
Loan receivable | 34,738 | 22,255 | |
Property and equipment, net | 7,055 | 6,232 | |
Right-of-use assets, net | 1,554 | 1,479 | |
Goodwill | 54,544 | 50,090 | |
Intangible assets, net | 15,861 | 14,072 | |
Other non-current assets | 3,105 | 1,184 | |
Total assets | 264,475 | 182,048 | |
Current liabilities: | |||
Accounts payable | 3,683 | 9,151 | |
Accrued expenses and other current liabilities | 30,112 | 28,764 | |
Operating lease liabilities, current | 911 | 814 | |
Long-term debt, current | 2,281 | 1,089 | |
Deferred revenue | 4,182 | 3,772 | |
Total current liabilities | 41,169 | 43,590 | |
Warrant liabilities | 29,711 | ||
Other non-current liabilities | 275 | 318 | |
Operating lease liabilities, non-current | 689 | 704 | |
Deferred tax liabilities, net | 62 | ||
Long-term debt | 35,697 | 12 | |
Total liabilities | 107,603 | 44,624 | |
Commitments and contingencies (Note 22) | |||
Stockholders’ equity: | |||
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 and 111,035 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively (1) | |||
Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding | |||
Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding | |||
Additional paid-in capital | [1] | 213,701 | 196,034 |
Accumulated deficit | (57,195) | (58,975) | |
Total stockholders’ equity attributable to Agrify | 156,506 | 137,059 | |
Non-controlling interests | 366 | 365 | |
Total liabilities and stockholders’ equity | $ 264,475 | $ 182,048 | |
[1] Periods presented have been adjusted to reflect the 1-for-10 reverse stock split on October 18, 2022 and the 1-for-20 reverse stock split on July 5, 2023. Additional information regarding the reverse stock splits may be found in Note 1 – , included elsewhere in the notes to the condensed consolidated financial statements. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts (in Dollars) | $ 1,415 | $ 1,415 | |
Inventory, net of reserves (in Dollars) | $ 942 | $ 942 | |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 250,000 | 250,000 | |
Common stock, shares issued | 132,714 | 111,035 | |
Common stock, shares outstanding | 132,714 | 111,035 | |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 2,895,000 | 2,895,000 | |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Preferred A Stock | |||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 105,000 | 105,000 | |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Income Statement [Abstract] | |||
Revenue (including $1,271 and $5,518 from related parties, respectively) | $ 26,021 | $ 7,008 | |
Cost of goods sold | 21,851 | 7,548 | |
Gross profit (loss) | 4,170 | (540) | |
General and administrative | 9,759 | 4,458 | |
Research and development | 2,084 | 882 | |
Selling and marketing | 2,090 | 616 | |
Total operating expenses | 13,933 | 5,956 | |
Loss from operations | (9,763) | (6,496) | |
Interest income (expense), net | 559 | (32) | |
Change in fair value of warrant liabilities | 10,785 | ||
Gain on extinguishment of notes payable | 2,685 | ||
Other income, net | 11,344 | 2,653 | |
Net income (loss) before income taxes | 1,581 | (3,843) | |
Income tax benefit | (200) | ||
Net income (loss) | 1,781 | (3,843) | |
Income (loss) attributable to non-controlling interest | 1 | (33) | |
Net income (loss) attributable to Agrify Corporation | $ 1,780 | $ (3,810) | |
Net income (loss) per share attributable to Common Stockholders – basic (1) (in Dollars per share) | [1] | $ 14.48 | $ (65.87) |
Net income (loss) per share attributable to Common Stockholders – diluted (1) (in Dollars per share) | [1] | $ 13.79 | $ (65.87) |
Weighted-average common shares outstanding – basic (1) (in Shares) | [1] | 122,946 | 57,841 |
Weighted-average common shares outstanding – diluted (1) (in Shares) | [1] | 129,045 | 57,841 |
[1] Periods presented have been adjusted to reflect the 1-for-10 reverse stock split on October 18, 2022 and the 1-for-20 reverse stock split on July 5, 2023. Additional information regarding the reverse stock splits may be found in Note 1 – , included elsewhere in the notes to the condensed consolidated financial statements. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Related Parties | ||
Revenue from related parties | $ 1,271 | $ 5,518 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Preferred A Stock | Additional Paid-In Capital | [1] | Accumulated Deficit | Total Stockholders’ Equity attributable to Agrify | Non- Controlling Interests | Total | ||
Balance at Dec. 31, 2020 | [1] | $ 19,831 | $ (26,510) | $ (6,679) | $ 225 | $ (6,454) | ||||
Balance (in Shares) at Dec. 31, 2020 | 21,058 | [1] | 100,000 | |||||||
Stock-based compensation | [1] | 2,135 | 2,135 | 2,135 | ||||||
Stock-based compensation (in Shares) | [1] | |||||||||
Beneficial conversion feature associated with amended Convertible Promissory Notes | [1] | 3,869 | 3,869 | 3,869 | ||||||
Beneficial conversion feature associated with amended Convertible Promissory Notes (in Shares) | [1] | |||||||||
Conversion of Convertible Notes | [1] | 13,100 | 13,100 | 13,100 | ||||||
Conversion of Convertible Notes (in Shares) | 8,485 | [1] | ||||||||
Issuance of Common Stock – Initial Public Offering (“IPO”), net of fees | [1] | 56,961 | 56,961 | 56,961 | ||||||
Issuance of Common Stock – Initial Public Offering (“IPO”), net of fees (in Shares) | 31,050 | [1] | ||||||||
Issuance of Common Stock – Secondary public offering, net of fees | [1] | 79,839 | 79,839 | 79,839 | ||||||
Issuance of Common Stock – Secondary public offering, net of fees (in Shares) | 31,945 | [1] | ||||||||
Conversion of Preferred A Stock | [1] | |||||||||
Conversion of Preferred A Stock (in Shares) | 6,865 | [1] | (100,000) | |||||||
Exercise of options | [1] | 439 | 439 | $ 439 | ||||||
Exercise of options (in Shares) | 872 | [1] | 871 | |||||||
Exercise of warrants | [1] | 5 | 5 | $ 5 | ||||||
Exercise of warrants (in Shares) | [1] | 1,201 | ||||||||
Net income (loss) | [1] | (3,810) | (3,810) | (33) | (3,843) | |||||
Net income (loss) (in Shares) | [1] | |||||||||
Balance at Mar. 31, 2021 | [1] | 176,179 | (30,320) | 145,859 | 192 | 146,051 | ||||
Balance (in Shares) at Mar. 31, 2021 | 101,476 | [1] | ||||||||
Balance at Dec. 31, 2021 | [1] | 196,034 | (58,975) | 137,059 | 365 | 137,424 | ||||
Balance (in Shares) at Dec. 31, 2021 | [1] | 111,035 | ||||||||
Stock-based compensation | [1] | 953 | 953 | 953 | ||||||
Stock-based compensation (in Shares) | [1] | |||||||||
Issuance of Common Stock and warrants in private placement | [1] | 14,800 | 14,800 | 14,800 | ||||||
Issuance of Common Stock and warrants in private placement (in Shares) | [1] | 12,252 | ||||||||
Acquisition of Lab Society | [1] | 1,903 | 1,903 | 1,903 | ||||||
Acquisition of Lab Society (in Shares) | [1] | 1,490 | ||||||||
Exercise of options | [1] | 10 | 10 | $ 10 | ||||||
Exercise of options (in Shares) | 21 | [1] | 21 | |||||||
Exercise of warrants | [1] | 1 | 1 | $ 1 | ||||||
Exercise of warrants (in Shares) | [1] | 7,916 | ||||||||
Net income (loss) | [1] | 1,780 | 1,780 | 1 | 1,781 | |||||
Net income (loss) (in Shares) | [1] | |||||||||
Balance at Mar. 31, 2022 | [1] | $ 213,701 | $ (57,195) | $ 156,506 | $ 366 | $ 156,872 | ||||
Balance (in Shares) at Mar. 31, 2022 | [1] | 132,714 | ||||||||
[1] Periods presented have been adjusted to reflect the 1-for-10 reverse stock split on October 18, 2022 and the 1-for-20 reverse stock split on July 5, 2023. Additional information regarding the reverse stock splits may be found in Note 1 – , included elsewhere in the notes to the condensed consolidated financial statements. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net income (loss) attributable to Agrify Corporation | $ 1,780 | $ (3,810) |
Adjustments to reconcile net income (loss) attributable to Agrify Corporation to net cash used in operating activities: | ||
Depreciation and amortization | 1,052 | 147 |
Amortization of premium on investment securities | 224 | |
Amortization of debt discount | 223 | |
Amortization of issuance costs | 143 | |
Interest on investment securities | (248) | |
Deferred income taxes | (200) | |
Compensation in connection with the issuance of stock options | 953 | 2,135 |
Non-cash interest (income) expense | (406) | 33 |
Change in fair value of warrant liabilities | (10,785) | |
Gain on extinguishment of notes payable, net | (2,685) | |
Early termination of lease | 26 | |
Income (loss) attributable to non-controlling interests | 1 | (33) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (838) | (5,218) |
Inventory | (16,361) | (3,330) |
Prepaid expenses and other current assets | (890) | (2,155) |
Right of use assets, net | (20) | |
Accounts payable | (2,838) | 181 |
Accrued expenses and other current liabilities | (2,120) | 7,360 |
Deferred revenue, net | (571) | 96 |
Net cash used in operating activities | (30,875) | (7,279) |
Cash flows from investing activities | ||
Purchases of property and equipment | (3,728) | (142) |
Purchase of securities | (76,097) | |
Proceeds from the sale of securities | 82,460 | |
Issuance of loan receivable | (12,487) | |
Cash paid for business combination, net of cash acquired | (3,513) | |
Net cash used in investing activities | (13,365) | (142) |
Cash flows from financing activities | ||
Proceeds from issuance of debt and warrants in private placement, net | 62,405 | |
Proceeds from issuance of Common Stock and warrants in private placement, net of fees | 25,797 | |
Proceeds from IPO, net of fees | 56,961 | |
Proceeds from Secondary public offering, net of fees | 79,839 | |
Proceeds from exercise of options | 10 | 439 |
Proceeds from exercise of warrants | 1 | 5 |
Payments on other financing loans | (273) | |
Payments on insurance financing loan | (428) | |
Payments of financing leases | (81) | (47) |
Net cash provided by financing activities | 87,431 | 137,197 |
Net increase in cash, cash equivalents, and restricted cash | 43,191 | 129,776 |
Cash, cash equivalents, and restricted cash at the beginning of period | 12,014 | 8,111 |
Cash, cash equivalents, and restricted cash at the end of period | 55,205 | 137,887 |
Cash, cash equivalents, and restricted cash at end of period | ||
Cash and cash equivalents | 25,205 | 137,887 |
Restricted cash | 30,000 | |
Total cash, cash equivalents, and restricted cash at the end of period | 55,205 | 137,887 |
Supplemental disclosures of cash flow information | ||
Conversion of Convertible Note to Common Stock | 13,100 | |
Supplemental disclosures of non-cash flow information | ||
Initial fair value of warrants | 40,496 | |
Financing of prepaid insurance | $ 1,928 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Nature of Business and Basis of Presentation [Abstract] | |
Nature of Business and Basis of Presentation | Note 1 — Nature of Business and Basis of Presentation Description of Business Agrify Corporation (“Agrify” or the “Company”) is a developer of proprietary precision hardware and software grow solutions for the commercial indoor agriculture industry and provides equipment and solutions for cultivation, extraction, post-processing, and testing for the cannabis and hemp industries. The Company was formed in the State of Nevada on June 6, 2016 as Agrinamics, Inc., and subsequently changed its name to Agrify Corporation. The Company is sometimes referred to herein by the words “we,” “us,” “our,” and similar terminology. The Company has nine wholly-owned subsidiaries, which are collectively referred to as the “Subsidiaries”: ● AGM Service Corp LLC (formerly AGM Service Corp Inc.); ● TriGrow Systems, LLC (“TriGrow”, which acted as the Company’s exclusive distributor and which was acquired in January 2020 as TriGrow Systems, Inc. and converted to TriGrow Systems, LLC in May 2020); ● Ariafy Finance, LLC; ● Agxiom, LLC; ● Harbor Mountain Holdings, LLC (“HMH”) (acquired in July 2020); ● Cascade Sciences, LLC (“Cascade”) (which was acquired by the Company on October 1, 2021); ● Precision Extraction NewCo, LLC (“Precision”) (which was a newly formed subsidiary in connection with October 1, 2021 acquisition of Mass2Media, LLC, d/b/a PX2 Holdings, LLC, d/b/a Precision Extraction Solutions and Cascade); and ● PurePressure, LLC (“PurePressure”) (which was acquired by the Company on December 31, 2021); and ● Lab Society NewCo, LLC (“Lab Society”) (which was a newly formed subsidiary in connection with February 1, 2022 acquisition of LS Holdings Corp). The Company also has ownership interests in the following companies: ● Teejan Podoponics International LLC (“TPI”) (the Company has owned 50% of TPI since December 2018); ● Agrify-Valiant, LLC (“Agrify-Valiant”) (the Company owns 60% of Agrify-Valiant, which was formed in December 2019); and ● Agrify Brands, LLC (“Agrify Brands”) (formerly TriGrow Brands, LLC) (the Company owns 75% of Agrify Brands, which ownership position was created as part of the January 2020 acquisition of TriGrow). Reverse Stock Split On January 12, 2021, the Company effected a 1-for-1.581804 reverse stock split (“Reverse Stock Split”) of its Common Stock, $0.001 par value per share (“Common Stock”). All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated. On October 18, 2022, the Company effected a 1-for-10 reverse stock split of its Common Stock. All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated. On July 5, 2023, the Company effected a 1-for-20 reverse stock split of its Common Stock, All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated. No fractional shares of Common Stock were issued as a result of these reverse stock splits. Any fractional shares in connection with these reverse stock splits were rounded up to the nearest whole share and no stockholders received cash in lieu of fractional shares. The reverse stock splits had no impact on the number of shares of Common Stock that the Company is authorized to issue pursuant to its articles of incorporation or on the par value per share of the Common Stock. Proportional adjustments were made to the number of shares of Common Stock outstanding stock options and warrants, the exercise price or conversion price (as applicable) of the Company’s outstanding stock options and warrants, and the number of shares reserved for issuance under the Company’s equity incentive plan. Initial Public Offering and Secondary Public Offering On February 1, 2021, the Company closed its initial public offering, or (“IPO”), of 31,050 shares of its Common Stock (inclusive of 4,050 shares of Common Stock from the full exercise of the over-allotment option of shares granted to the underwriters). The offer and sale of all of the shares in the IPO were registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form S-1 (File Nos. 333- 251616 and 333-252490), which was declared effective by the SEC on January 27, 2021. In the IPO, Maxim Group LLC and Roth Capital Partners acted as the underwriters. The IPO price for shares of Common Stock was $2,000.00 per share. The total gross proceeds from the IPO were $62.1 million. After deducting underwriting discounts and commissions of $4 million and offering expenses paid or payable by us of approximately $1 million, the net proceeds from the IPO were approximately $57 million. The Company used the net proceeds from the IPO for its current working capital needs, to support revenue growth, to increase inventory to meet customer demand forecasts, and to support operational growth. On February 19, 2021, the Company consummated a secondary public offering (the “February Offering”) of 27,778 shares of its Common Stock for a price of $2,700.00 per share, less certain underwriting discounts and commissions. On March 22, 2021, the Company closed on the sale of an additional 4,167 shares of Common Stock on the same terms and conditions pursuant to the exercise of the underwriters’ over-allotment option. The exercise of the over-allotment option brought the total number of shares of Common Stock sold by the Company in connection with the February Offering to 31,944 shares and the total net proceeds received in connection with the February Offering to approximately $80 million, after deducting underwriting discounts and estimated offering expenses. The Company used the net proceeds from the IPO for its current working capital needs, to support revenue growth, to increase inventory, to meet customer demand forecasts, and to support operational growth. Coronavirus (“COVID-19”) Pandemic The spread of COVID-19 beginning in the first quarter of 2020 has caused significant volatility in U.S. markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. economy. To date, there has not been a material impact on the Company’s business operations and financial performance. The extent of the impact of COVID-19 on the Company’s operational and financial performance, if any, will depend, in part, on the length and severity of these restrictions and on the Company’s ability to conduct business in the ordinary course. The Paycheck Protection Program In May 2020, the Company received an unsecured Paycheck Protection Program Loan (“PPP Loan”) from the Bank of America pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), administered by the U.S. Small Business Administration (the “SBA”). The Company received total loan proceeds of approximately $779 thousand from the PPP Loan. The Company’s application for the forgiveness of the outstanding balance of PPP Loan is currently under review by the SBA. |
Restatement of Current Period
Restatement of Current Period | 3 Months Ended |
Mar. 31, 2022 | |
Restatement of Current Period [Abstract] | |
Restatement of Current Period | Note 2 — Restatement of Current Period The Company’s financial statements as of and for the three months ended March 31, 2022 have been restated due to the following errors: Pipe Warrants and SPA Warrants Classification and Measurement During the three months ended March 31, 2022 the Company entered into several debt and equity financing transactions including i) the issuance of common stock and warrants in a private placement on January 25, 2022 (the “PIPE Warrants”) and ii) the issuance of a note payable with associated warrants on March 14, 2022 (the “SPA Warrants”). The Company determined that the PIPE Warrants and the SPA Warrants were incorrectly classified as equity and must be reclassified to liabilities measured at fair value upon issuance and remeasured to fair value at each reporting date. As a result of these errors: ● Additional paid-in capital was overstated by $24.2 million as of March 31, 2022 due to the incorrect classification of the SPA Warrants and the PIPE Warrants as equity rather than liabilities; ● Warrant liabilities was understated by the fair value of the PIPE Warrants and the SPA Warrants of $29.7 million as of March 31, 2022; ● Long-term debt and Long-term debt, current was overstated by $15.5 million and $0.7 million, respectively as of March 31, 2022 due to the incorrect allocation of the debt discount in connection with the issuance of debt and SPA Warrants, as a result of the improper classification of the SPA Warrants as equity rather than liabilities; ● Accumulated deficit as of March 31, 2022 was overstated by $10.7 million as a result of the net impact of the following errors in the condensed consolidated statement of operations: ο The change in fair value of warrant liabilities was understated by $10.8 million because the Company did not appropriately remeasure the fair value of the warrant liabilities as of March 31, 2022 through earnings; ο Interest income, net was overstated by $123 thousand due to incorrect debt discount amortization in connection with the issuance of debt and SPA Warrants, as a result of the improper classification of the SPA Warrants as equity rather than liabilities. Debt Issuance Costs Classification The Company incorrectly classified debt issuance costs as an asset rather than as a direct deduction from the carrying value of the associated debt liability as of March 31, 2022. As a result of this error: ● Prepaid expenses and other current assets were understated by $0.8 million as of March 31, 2022; ● Other non-current assets were overstated by $0.8 million as of March 31, 2022; The impact of these adjustments are shown below in the restated and reclassified condensed consolidated balance sheet, condensed consolidated statement of operations, condensed consolidated statement of cash flows, and condensed consolidated statement of stockholders’ equity as of and for the three months ended March 31, 2022. The following is a summary of the impact of the restatement and reclassifications on the Company’s condensed consolidated balance sheet: March 31, 2022 Adjustments Previously Warrants Reverse Debt Restated Assets Current assets Cash and cash equivalents $ 25,205 — — — $ 25,205 Restricted cash 30,000 — — — 30,000 Marketable securities 38,211 — — — 38,211 Accounts receivable, net of allowance for doubtful accounts of $1,415 8,571 — — — 8,571 Inventory, net of reserves of $942 38,989 — — — 38,989 Prepaid and refundable taxes 194 — — — 194 Prepaid expenses and other current assets 6,373 — — 75 6,448 Total current assets 147,543 147,618 Non-Current Assets Loan receivable 34,738 — — — 34,738 Property and equipment, net 7,055 — — — 7,055 Right-of-use assets, net 1,554 — — — 1,554 Goodwill 54,544 — — — 54,544 Intangible assets, net 15,861 — — — 15,861 Other non-current assets 3,180 — — (75 ) 3,105 Total Assets $ 264,475 $ 264,475 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 3,683 — — — $ 3,683 Accrued expenses and other current liabilities 30,112 — — — 30,112 Operating lease liabilities, current 911 — — — 911 Long-term debt, current 2,970 (689 ) — — 2,281 Deferred revenue 4,182 — — — 4,182 Total current liabilities 41,858 41,169 Non-current liabilities Warrant liabilities — 29,711 — — 29,711 Other non-current liabilities 275 — — — 275 Operating lease liabilities, non-current 689 — — — 689 Deferred tax liabilities, net 62 — — — 62 Long-term debt 51,154 (15,457 ) — — 35,697 Total liabilities 94,038 107,603 Commitments and contingencies (Note 22) Stockholders’ equity Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 shares issued and outstanding 25 — (25 ) — 0 Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding — — — — — Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding — — — — — Additional paid-in capital 237,903 (24,227 ) 25 — 213,701 Accumulated deficit (67,857 ) 10,662 — — (57,195 ) Total stockholders’ equity attributable to Agrify 170,071 156,506 Non-controlling interests 366 — — — 366 Total liabilities and stockholders’ equity $ 264,475 $ 264,475 The following is a summary of the impact of the restatement and reclassifications on the Company’s condensed consolidated statement of operations: Three Months ended March 31, 2022 Adjustment Previously Warrants Reverse Restated Revenue (including $1,271 from related parties) $ 26,021 — — $ 26,021 Cost of goods sold 21,851 — — 21,851 Gross profit 4,170 4,170 General and administrative 9,759 — — 9,759 Research and development 2,084 2,084 Selling and marketing 2,090 — — 2,090 Total operating expenses 13,933 13,933 Loss from operations (9,763 ) (9,763 ) Interest income, net 682 (123 ) — 559 Change in fair value of warrant liabilities — 10,785 — 10,785 Gain on extinguishment of notes payable — — — — Other income, net 682 10,662 — 11,344 Net (loss) income before income taxes (9,081 ) 10,662 — 1,581 Income tax benefit (200 ) — — (200 ) Net (loss) income (8,881 ) 10,662 — 1,781 Income attributable to non-controlling interest 1 — — 1 Net (loss) income attributable to Agrify Corporation $ (8,882 ) $ 10,662 $ 1,780 Net (loss) income per share attributable to Common Stockholders – basic $ (0.36 ) $ 0.43 $ 14.41 $ 14.48 Net (loss) income per share attributable to Common Stockholders -- diluted $ (0.36 ) $ 0.43 $ 13.72 $ 13.79 Weighted-average common shares outstanding – basic 24,589,113 — (24,466,167 ) 122,946 Weighted-average common shares outstanding – diluted 24,589,113 — (24,460,068 ) 129,045 The following is a summary of the impact of the restatement and reclassifications on the Company’s condensed consolidated statement of cash flows: Three Months ended March 31, 2022 Previously Adjustment Cash flows from operating activities Reported Warrants Restated Net income (loss) attributable to Agrify Corporation $ (8,882 ) 10,662 $ 1,780 Adjustments to reconcile net loss (income) attributable to Agrify Corporation to net cash used in operating activities: Depreciation and amortization 1,052 — 1,052 Amortization of premium on investment securities 224 — 224 Amortization of debt discount 20 203 223 Amortization of issuance costs — 143 143 Interest on investment securities (248 ) — (248 ) Debt issuance costs 2,700 (2,700 ) — Deferred income taxes (200 ) — (200 ) Compensation in connection with the issuance of stock options 953 — 953 Non-cash interest (income) (406 ) — (406 ) Change in fair value of warrant liabilities — (10,785 ) (10,785 ) Gain on extinguishment of notes payable, net — — — Early termination of lease 26 — 26 Income attributable to non-controlling interests 1 — 1 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable (838 ) — (838 ) Inventory (16,361 ) — (16,361 ) Prepaid expenses and other current assets (3,033 ) 2,143 (890 ) Right of use assets, net (20 ) — (20 ) Other non-current assets (1,867 ) 1,867 — Accounts payable (2,765 ) (73 ) (2,838 ) Accrued expenses and other current liabilities (2,120 ) — (2,120 ) Deferred (expense), net (2,407 ) 1,836 (571 ) Net cash used in operating activities (34,171 ) 3,296 (30,875 ) Cash flows from investing activities Purchases of property and equipment (3,728 ) — (3,728 ) Purchase of securities (76,097 ) — (76,097 ) Proceeds from the sale of securities 82,460 — 82,460 Issuance of loan receivable (12,487 ) — (12,487 ) Cash paid for business combinations, net of cash acquired (3,513 ) — (3,513 ) Net cash used in investing activities (13,365 ) — (13,365 ) Cash flows from financing activities Proceeds from issuance of debt and warrants in private placement, net 65,000 (2,595 ) 62,405 Proceeds from issuance of Common Stock and warrants in private placement, net of fees 25,797 — 25,797 Proceeds from IPO, net of fees — — — Proceeds from Secondary public offering, net of fees — — — Proceeds from exercise of options 10 — 10 Proceeds from exercise of warrants 1 — 1 Payments on other financing loans — (273 ) (273 ) Payments on insurance financing loan — (428 ) (428 ) Payments of financing leases (81 ) — (81 ) Net cash provided by financing activities 90,727 (3,296 ) 87,431 Net increase in cash, cash equivalents, and restricted cash 43,191 — 43,191 Cash, cash equivalents, and restricted cash at the beginning of period 12,014 — 12,014 Cash, cash equivalents, and restricted cash at the end of period $ 55,205 $ 55,205 Cash, cash equivalents, and restricted cash at end of period Cash and cash equivalents $ 25,205 — $ 25,205 Restricted cash 30,000 — 30,000 Total cash, cash equivalents, and restricted cash at the end of period $ 55,205 $ 55,205 Supplemental disclosures of non-cash flow information Initial fair value of warrants — 40,496 $ 40,496 Financing of prepaid insurance — 1,928 $ 1,928 The following is a summary of the impact of the restatement and reclassifications on the Company’s condensed consolidated statement of stockholders’ equity as of March 31, 2022: Common Stock Common Stock Additional Additional Accumulated Accumulated Total Total Non-Controlling Non-Controlling Total Total Shares Amount Shares Amount Balance at January 1, 2022 22,207,103 $ 21 111,035 — $ 196,013 $ 196,034 $ (58,975 ) $ (58,975 ) $ 137,059 $ 137,059 $ 365 $ 365 $ 137,424 $ 137,424 Stock-based compensation — — — — 953 953 — — 953 953 — — 953 953 Issuance of Common Stock and warrants in private placement 2,450,350 2 12,252 — 25,795 14,800 — — 25,797 14,800 — — 25,797 14,800 Issuance of debt and warrants in private placement — — — — 13,230 — — — 13,230 — — — 13,230 — Acquisition of Lab Society 297,929 — 1,490 — 1,903 1,903 — — 1,903 1,903 — — 1,903 1,903 Exercise of options 4,220 — 21 — 10 10 — — 10 10 — — 10 10 Exercise of warrants 1,583,288 2 7,916 — (1 ) 1 — — 1 1 — — 1 1 Net income — — — — — — (8,882 ) 1,780 (8,882 ) 1,780 1 1 (8,881 ) 1,781 Balance at March 31, 2022 26,542,890 $ 25 132,714 — $ 237,903 $ 213,701 $ (67,857 ) $ (57,195 ) $ 170,071 $ 156,506 $ 366 $ 366 $ 170,437 $ 156,872 The related notes to the condensed and consolidated financial statements have also been restated to reflect the error corrections described above. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3 — Summary of Significant Accounting Policies Preparation of Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and filed with the SEC (“Form 10-K”), except for the recently adopted accounting pronouncements described below. The condensed consolidated financial statements included herein reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company’s condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2022 and 2021, and the condensed consolidated cash flows for the three months ended March 31, 2022 and 2021. The condensed consolidated balance sheet as of December 31, 2021 is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 31, 2022. The results for interim periods are not necessarily indicative of a full year’s results. Basis of Presentation and Principles of Consolidation Accounting for Wholly-Owned Subsidiaries The accompanying condensed consolidated financial statements have been prepared in accordance with GAAP and include the accounts of Agrify Corporation and its wholly-owned subsidiaries, as described above in Note 1 – Nature of Business and Basis of Presentation, in accordance with the provisions required by the Consolidation Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The Company includes results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated. Accounting for Less Than Wholly-Owned Subsidiaries For the Company’s less than wholly-owned subsidiaries, which include TPI, Agrify-Valiant, and Agrify Brands, the Company first analyzes whether these entities are a variable interest entity (a “VIE”) in accordance with ASC Topic 810 Consolidation (“ASC 810”), and if so, whether the Company is the primary beneficiary requiring consolidation. A VIE is an entity that has (i) insufficient equity to permit it to finance its activities without additional subordinated financial support or (ii) equity holders that lack the characteristics of a controlling financial interest. The financial results of a VIE are consolidated by the primary beneficiary, which is the entity that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that potentially could be significant to the entity. Variable interests in a VIE are contractual, ownership or other financial interests in a VIE that change with changes in the fair value of the VIE’s net assets. The Company continuously re-assesses (i) whether the joint venture is a VIE, and (ii) if the Company is the primary beneficiary of the VIE. If it is determined that the joint venture qualifies as a VIE and the Company is the primary beneficiary, the Company’s financial interest in the VIE is consolidated. Based on the Company’s analysis for these entities, the Company has determined that Agrify-Valiant, LLC and Agrify Brands, LLC are each a VIE, and that the Company is the primary beneficiary. While the Company owns 60% of Agrify-Valiant, LLC’s equity interests and 75% of Agrify Brands, LLC’s equity interests, the remaining equity interests in Agrify-Valiant, LLC and Agrify Brands, LLC are owned by unrelated third parties, and the agreement with these third parties provides the Company with greater voting rights. Accordingly, the Company consolidates its interest in the financial statements of Agrify-Valiant, LLC and Agrify Brands, LLC under the VIE rules, and reflects the third parties’ interests in the condensed consolidated financial statements as a non-controlling interest. The Company records this non-controlling interest at its initial fair value, adjusting the basis prospectively for the third parties’ share of the respective consolidated investments’ net income or loss or equity contributions and distributions. These non-controlling interests are not redeemable by the equity holders and are presented as part of permanent equity. Income and losses are allocated to the non-controlling interest holders based on its economic ownership percentage. The investment in 50% of the shares of TPI is treated as an equity investment as the Company cannot exercise significant influence. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of expenses. The Company bases its estimates on historical experience, known trends and other market-specific, other relevant factors that it believes to be reasonable under the circumstances and management’s judgement. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual financial results could differ from those estimates. Fiscal Year The Company, and its Subsidiaries, fiscal year ends on December 31, each year. Emerging Growth Company The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act. As a result, the Company is permitted to, and intends to, rely on exemptions from certain disclosure requirements that are applicable to companies that are not emerging growth companies. In addition, the JOBS Act provides that an “emerging growth company” can use the extended transition period for complying with new or revised accounting standards. The Company will remain an “emerging growth company” until the earliest to occur of: ● reporting $1.0 billion or more in annual gross revenues; ● the issuance, in a three-year period, of more than $1.0 billion in non-convertible debt; ● the end of the fiscal year in which the market value of Common Stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; or ● December 31, 2026. Reclassifications Certain amounts in the Company’s prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. In this Form 10-Q, the Company has reclassified selling, general and administrative expenses to two separate line items in the accompanying condensed consolidated statement of operations as general and administrative expenses and selling and marketing expenses for the three months ended March 31, 2022 and 2021. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents consist principally of cash and deposits with maturities of three months or less as of March 31, 2022 and December 31, 2021. All cash equivalents are carried at cost, which approximates fair value. Restricted cash represents cash required to be held as collateral for the Company’s senior secured promissory note (the “SPA Note”). Accordingly, these balances contain restrictions as to their availability and usage and are classified as restricted cash in the condensed consolidated balance sheets. Refer to Note 16 – Debt, included elsewhere in the notes to the condensed consolidated financial statements. Cash deposits with financial institutions, including restricted cash and restricted marketable securities, generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts. Balances held in a brokerage account are disclosed on the balance sheet as restricted cash. Marketable Securities The Company’s marketable security investments primarily include investments held in mutual funds, municipal bonds, and corporate bonds. The mutual funds are recorded at fair value in the accompanying condensed consolidated balance sheets as part of cash and cash equivalents. The municipal and corporate bonds are considered to be held-to-maturity securities and are recorded at amortized cost in the accompanying condensed consolidated balance sheets. The fair value of these investments were estimated using recently executed transactions and market price quotations. The Company considers current assets to be those investments which will mature within the next 12 months, including interest receivable on the long-term bonds. Accounts Receivable, Net Accounts receivable, net, primarily consists of amounts for goods and services that are billed and currently due from customers. Accounts receivable balances are presented net of an allowance for credit losses, which is an estimate of billed amounts that may not be collectible. In determining the amount of the allowance at each reporting date, management makes judgments about general economic conditions, historical write-off experience, and any specific risks identified in customer collection matters, including the aging of unpaid accounts receivable and changes in customer financial conditions. Accounts receivable balances are written off after all means of collection are exhausted and the potential for non-recovery is determined to be probable. Adjustments to the allowance for credit losses are recorded as general and administrative expenses in the condensed consolidated statements of operations. Concentration of Credit Risk and Significant Customer Financial instruments that potentially subject the Company to a concentration of credit risk primarily consist of cash and accounts receivable. The Company places its cash with financial institutions in the United States. The cash balances are insured by the FDIC up to $250 thousand per depositor with unlimited insurance for funds in noninterest-bearing transaction accounts through March 31, 2022. At times, the amounts in these accounts may exceed the federally insured limits. The Company has certain customers from whom revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represent 10% or more of the Company’s total accounts receivable. Refer to the following tables below. Revenue For the three months ended March 31, 2022 and 2021, the Company’s customers that accounted for 10% or more of the total revenue were as follows: Three Months ended Three Months ended (In thousands) Amount % of Total Amount % of Total New England Innovation Academy (“NEIA”) – Related Party * * $ 5,460 77.9 % Customer C $ 3,793 14.6 % * * Customer D $ 4,697 18.1 % * * * Customer revenue, as a percentage of total revenue was less than 10% Accounts Receivable, Net As of March 31, 2022 and December 31, 2021, the Company’s customers that accounted for 10% or more of the total accounts receivable, net, were as follows: As of As of (In thousands) Amount % of Total Amount % of Total NEIA – Related Party $ 1,344 15.7 % $ 3,498 48.4 % Customer B $ 1,541 18.0 % $ 1,541 21.3 % Customer E $ 1,217 14.2 % * * * Customer accounts receivable balance, as a percentage of total accounts receivable balance, was less than 10% Inventories The Company values all of its inventories, which consist primarily of significant raw material hardware components, at the lower of cost or net realizable value, with cost principally determined by the weighted-average cost method on a First-In, First-Out basis. Write-offs of potentially slow moving or damaged inventory are recorded through specific identification of obsolete or damaged material. The company takes physical inventory at least once annually at all inventory locations. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Useful Life Computer and office equipment 2 to 3 Furniture and fixtures 2 Software 3 Vehicles 5 Research and development laboratory equipment 5 Machinery and equipment 3 to 5 Leased equipment at customer 5 to 13 Trade show assets 3 to 5 Leasehold improvements Lower of estimated useful life or remaining lease term The estimated useful lives of the Company’s property and equipment are periodically assessed to determine if changes are appropriate. The Company charges maintenance and repairs to expense as incurred. When the Company retires or disposes assets, the carrying cost of these assets and related accumulated depreciation or amortization are eliminated from the condensed consolidated balance sheet and any resulting gain or loss are included in the condensed consolidated statement of operations in the period of retirement or disposal. Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service. Goodwill Goodwill is defined as the excess of cost over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is tested for impairment annually, and more frequently if events and circumstances indicate that the asset might be impaired. The Company has determined that it is a single reporting unit for the purpose of conducting the goodwill impairment assessment. A goodwill impairment charge is recorded if the amount by which the Company’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Factors that could lead to a future impairment include material uncertainties such as a significant reduction in projected revenues, a deterioration of projected financial performance, future acquisitions and/or mergers, and/or a decline in the Company’s market value as a result of a significant decline in the Company’s stock price. Based upon the Company’s 2021 annual impairment testing analyses, including the consideration of reasonably likely adverse changes in assumptions described above, the Company determined that there are no goodwill impairments to date. Intangible Assets The Company initially records intangible assets at their estimated fair values and reviews these assets periodically for impairment. Identifiable intangible assets, which consist principally of acquired customer related acquired assets, acquired and/or developed technology, non-compete agreements, and trade names, are reported net of accumulated amortization, and are being amortized over their estimated useful lives at amortization rates that are proportional to each asset’s estimated economic benefit. The Company’s intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The Company reviews the carrying value of these intangible assets annually, or more frequently if indicators of impairment are present. The finite-lived useful lives are as follows: Trade names 5 to 7 years Acquired developed technology 5 to 8 years Non-compete agreements 5 years Customer relationships 5 to 8 years Capitalized website costs 3 to 5 years In performing the review of the recoverability of intangible assets, the Company considers several factors, including whether there have been significant changes in legal factors or the overall business climate that could affect the underlying value of an asset. The Company also considers whether there is an expectation that the asset will be sold or disposed of before the end of its remaining estimated useful life. If, as the result of examining any of these factors, the Company concludes that the carrying value of intangible asset exceeds its estimated fair value, the Company recognizes an impairment charge and reduces the carrying value of the asset to its estimated fair value. Convertible Notes Payable The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with ASC Topic 815 Derivatives and Hedging (“ASC815”). The accounting treatment of derivative financial instruments requires that the Company identify and record certain embedded conversion options (“ECOs”), certain variable-share settlement features, and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. Bifurcated embedded conversion options, variable-share settlement features and any related freestanding instruments are recorded as a discount to the host instrument which is amortized to interest expense over the life of the respective note using the effective interest method. If the Company determines that an instrument is not a derivative liability, it then evaluates whether there is a beneficial conversion feature (“BCF”), by comparing the commitment date fair value to the effective current conversion price of the instrument. The Company records a BCF as debt discount which is amortized to interest expense over the life of the respective note using the effective interest method. BCFs that are contingent upon the occurrence of a future event are recognized when the contingency is resolved. Debt Issue Costs and Debt Discount The Company may record debt issuance costs and/or debt discounts in connection with issuing of debt. The Company may cover these costs by paying cash or issuing or equity (such as warrants). These costs are amortized to interest expense over the expected life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Original Issue Discount For certain convertible debt issued by the Company, it may provide the debt holder with an original issue discount. The Company would record the original issue discount to debt discount, reducing the face amount of the note, and is then amortized to interest expense over the life of the debt. Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement – Financial instruments classified as liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other income, net. Leases The Company determines at the inception of a right-of-use asset contract if such arrangement is or contains a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company classifies leases at the lease commencement date as operating or finance leases and records a right-of-use asset and a lease liability on its condensed consolidated balance sheet for all leases with an initial lease term of greater than 12 months. A lease with an initial term of 12 months or less is not recorded on the balance sheet, but related payments are recognized as expense on a straight-line basis over the lease term. The Company’s right-of-use asset contracts may contain both lease and non-lease components. Non-lease components may include maintenance, utilities, and other operating costs. The Company combines the lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, such as utilities or maintenance costs, are not included in the measurement of right-of-use assets and lease liabilities, but rather are expensed when the event determining the amount of variable consideration to be paid occurs. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of future lease payments over the expected lease term. The Company determines the present value of future lease payments by using its estimated secured incremental borrowing rate for that lease term as the interest rate implicit in the lease is not readily determinable. The Company estimates its secured incremental borrowing rate for each lease based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. Certain of the Company’s right-of-use asset leases include options to extend or terminate the lease. The amounts determined for the Company’s right-of-use assets and lease liabilities generally do not assume that renewal options or early-termination provisions, if any, are exercised, unless it is reasonably certain that the Company will exercise such options. Deferred Revenue Deferred revenue includes amounts collected or billed in excess of revenue that it can recognize. The Company recognizes deferred revenue as revenue as the related performance obligation is satisfied. The Company records deferred revenue that will be recognized during the succeeding twelve-month period as a current liability on the condensed consolidated balance sheet. Fair Value of Financial Instruments The Company’s financial instruments consist of cash, accounts receivable, warrants, accounts payable and accrued expenses. The estimated fair value of the accounts receivable and accounts payable approximates their carrying value due to the short-term nature of these instruments. Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. Historically, the Company has issued stock options to employees, directors and consultants with only service-based vesting conditions and records the expense for these awards using the straight-line method. The Company classifies stock-based compensation expense in its condensed consolidated statements of operations and comprehensive loss in the same manner in which the award’s recipient’s payroll costs are classified. The Company estimates the fair value of each stock option grant on the date of grant using the Black-Scholes option-pricing model. Before the IPO, the Company was a private company and therefore lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of similar publicly-traded companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. Business Combinations The Company accounts for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed. The Company’s management exercises significant judgments in determining the fair value of assets acquired and liabilities assumed, as well as intangibles and their estimated useful lives. Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company’s current and future operating results. Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to the fair value of assets and liabilities made after the end of the measurement period are recorded within the Company’s operating results. For contingent consideration arrangements, the Company recognizes a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in operations. Additional information regarding the Company’s contingent consideration arrangements may be found in Note 6 – Fair Value Measures, included elsewhere in the notes to the condensed consolidated financial statements. Revenue Recognition Overview The Company generates revenue from the following sources: (1) equipment sales, (2) providing services and (3) construction contracts. In accordance with ASC 606 “Revenue Recognition”, the Company recognizes revenue from contracts with customers using a five-step model, which is described below: ● identify the customer contract; ● identify performance obligations that are distinct; ● determine the transaction price; ● allocate the transaction price to the distinct performance obligations; and ● recognize revenue as the performance obligations are satisfied. Identify the customer contract A customer contract is generally identified when there is approval and commitment from both the Company and its customer, the rights have been identified, payment terms are identified, the contract has commercial substance and collectability, and consideration is probable. Specifically, the Company obtains written/electronic signatures on contracts and a purchase order, if said purchase orders are issued in the normal course of business by the customer. Identify performance obligations that are distinct A performance obligation is a promise by the Company to provide a distinct good or service or a series of distinct goods or services. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determine the transaction price The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding sales taxes that are collected on behalf of government agencies. Allocate the transaction price to distinct performance obligations The transaction price is allocated to each performance obligation based on the relative standalone selling prices (“SSP”) of the goods or services being provided to the customer. The Company’s contracts typically contain multiple performance obligations, for which the Company accounts for individual performance obligations separately, if they are distinct. The standalone selling price reflects the price the Company would charge for a specific piece of equipment or service if it was sold separately in similar circumstances and to similar customers. Recognize revenue as the performance obligations are satisfied Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer. Significant Judgments The Company enters into contracts that may include various combinations of equipment, services and construction, which are generally capable of being distinct and accounted for as separate performance obligations. Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Once the Company determines the performance obligations, it determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. The Company then allocates the transaction price to each performance obligation in the contract based on the SSP. The corresponding revenue is recognized as the related performance obligations are satisfied. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP based on the price at which the performance obligation is sold separately and the methods of estimating SSP under the guidance of ASC 606-10-32-33. If the SSP is not observable through past transactions, the Company estimates the SSP, taking into account available information such as market conditions, expected margins, and internally approved pricing guidelines related to the performance obligations. The Company licenses its software as a SaaS type subscription license, whereby the customer only has a right to access the software over a specified time period. The full value of the contract is recognized ratably over the contractual term of the SaaS subscription, adjusted monthly if tiered pricing is relevant. The Company typically satisfies its performance obligations for equipment sales when equipment is made available for shipment to the customer; for services sales as services are rendered to the customer and for construction contracts both as services are rendered and when contract is completed. The Company utilizes the cost-plus margin method to determine the SSP for equipment and build-out services. This method is based on the cost of the services from third parties, plus a reasonable markup that the Company believes is reflective of a marke |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Note 4 — Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in ASU No. 2020-06 simplify the complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exceptions for contracts in an entity’s own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this new accounting guidance had no impact on the Company’s consolidated financial position. Pending Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), which introduces a new methodology for accounting for credit losses on financial instruments, including available-for-sale debt securities and accounts receivable. The guidance establishes a new “expected loss model” that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities. ASU 2016-13 is effective in the first quarter of fiscal 2024. The Company is currently evaluating the potential impact of this adoption on its condensed consolidated financial statements and related disclosures. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 606): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements, if the acquiree prepared financial statements in accordance with U.S. GAAP. The amendment in this update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance should be applied prospectively to business combinations occurring on or after the effective date of the amendment in this update. The Company is currently evaluating the potential impact of this adoption on its condensed consolidated financial statements and related disclosures. The Company does not believe that any other ASU issued but not yet effective, if adopted, will have a material effect on the Company’s future financial statements. |
Revenue and Deferred Revenue
Revenue and Deferred Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue and Deferred Revenue [Abstract] | |
Revenue and Deferred Revenue | Note 5 — Revenue and Deferred Revenue Revenue During the three months ended March 31, 2022 and 2021, the Company generated revenue from the following sources: (1) equipment sales, (2) services sales and (3) construction contracts. The Company sells its equipment and services to customers under a combination of a contract and purchase order. Equipment revenue includes sales from proprietary products designed and engineered by the Company such as Agrify Vertical Farming Units (“VFUs”), container farms, integrated grow racks, and LED grow lights, and non-proprietary products designed, engineered, and manufactured by third parties such as air cleaning systems and pesticide-free surface protection. Construction contracts normally provide for payment upon completion of specified work or units of work as identified in the contract. Although there is considerable variation in the terms of these contracts, they are primarily structured as time-and-material contracts. The Company enters into time-and-materials contracts under which the Company is paid for labor and equipment at negotiated hourly billing rates and other expenses, including materials, as incurred at rates agreed to in the contract. The Company uses three main sub-contractors to execute the construction contracts. Disaggregation of Revenue — Three Months ended (In thousands) 2022 2021 Transferred at a point in time $ 12,774 $ 6,828 Transferred over time 13,247 180 Total revenue $ 26,021 $ 7,008 In accordance with ASC 606-10-50-13, the Company is required to include disclosure on its remaining performance obligations as of the end of the current reporting period. Due to the nature of the Company’s contracts, these reporting requirements are not applicable, because the majority of the Company’s remaining contracts meet certain exemptions as defined in ASC 606-10-50-14 through 606-10-50-14A, including (i) performance obligation is part of a contract that has an original expected duration of one year or less and (ii) the right to invoice practical expedient. The Company generally provides a one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated, and generally transfers to its customers the warranties it receives from its vendors, if any, which generally cover this one-year period. In accordance with ASC 450-20-25, the Company accrues for product warranties when the loss is probable and can be reasonably estimated. The Company maintains a reserve for warranty returns of $398 thousand for both March 31, 2022 and December 31, 2021. The Company’s reserve for warranty returns is included in accrued expenses and other current liabilities in its condensed consolidated balance sheets. Deferred Revenue Changes in the Company’s current deferred revenue balance for the three months ended March 31, 2022 and the year ended December 31, 2021 were as follows: (In thousands) Three Months Year ended Deferred revenue – beginning of period $ 3,772 $ 152 Additions 5,089 3,758 Interest income on deferred revenue — 4 Recognized (4,679 ) (142 ) Deferred revenue – end of period $ 4,182 $ 3,772 Deferred revenue balances primarily consist of customer deposits on our cultivation and extraction solutions equipment. As of March 31, 2022 and December 31, 2021, all of the Company’s deferred revenue balances were reported as current liabilities in our accompanying condensed consolidated balance sheets. |
Fair Value Measures
Fair Value Measures | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measures | Note 6 — Fair Value Measures Fair Values of Assets and Liabilities In accordance with ASC Topic 820 “Fair Value Measurement”, the Company measures fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the assumptions that market participants would use in pricing an asset or liability (the inputs) are based on a tiered fair value hierarchy consisting of three levels, as follows: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets. Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar instruments in active markets or for similar markets that are not active. Level 3: Unobservable inputs for which there is little or no market data which require the Company to develop its own assumptions about how market participants would price the asset or liability. Valuation techniques for assets and liabilities include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain. At March 31, 2022 and December 31, 2021, the Company’s assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2022 December 31, 2021 Fair Value Measurements Using Input Types Fair Value Measurements Using Input Types (In thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Mutual funds (included in cash and cash equivalents) $ 43,528 $ - $ - $ 43,528 $ 178 $ - $ - $ 178 Municipal bonds 19,306 - - 19,306 9,961 - - 9,961 Corporate bonds 18,905 - - 18,905 34,589 - - 34,589 Total assets $ 81,739 $ - $ - $ 81,739 $ 44,728 $ - $ - $ 44,728 Liabilities: Contingent consideration $ - $ - $ 7,557 $ 7,557 $ - $ - $ 6,137 $ 6,137 Warrant liabilities - - 29,711 29,711 - - - - Total liabilities $ - $ - $ 37,268 $ 37,268 $ - $ - $ 6,137 $ 6,137 Fair Value of Financial Instruments The Company has certain financial instruments which consist of cash and cash equivalents, marketable securities, contingent consideration, and warrant liabilities. Fair value information for each of these instruments is as follows: ● Cash and cash equivalents, accounts receivable, accounts payable and deferred revenue liabilities fair values approximate their carrying values, due to the expected duration of these instruments. ● Marketable securities classified as current held-to-maturity securities are recorded at amortized cost, which at March 31, 2022, approximated fair value. ● The Company’s deferred consideration was recorded in connection with acquisitions during the three months ended March 31, 2022 and fiscal 2021 using an estimated fair value discount at the time of the transaction. As of March 31, 2022 and December 31, 2021, the carrying value of the deferred consideration approximated fair value, respectively. ● Warrant liabilities were recorded in connection with the issuance of warrants to purchase the Company’s common stock during the three months ended March 31, 2022. As of March 31, 2022, the warrant liabilities were recorded at fair value. Marketable Securities As of March 31, 2022, the Company held investments in mutual funds, municipal bonds and corporate bonds. The Company records mutual funds at fair value in the accompanying condensed consolidated balance sheet as part of cash and cash equivalents. The municipal and corporate bonds are considered held-to-maturity securities and are recorded at amortized cost in the accompanying condensed consolidated balance sheet. The fair values of these investments were estimated using recently executed transactions and market price quotations. The Company considers current assets those investments which will mature within the next 12 months including, interest receivable on the long-term bonds. The composition of the Company’s marketable securities are as follows: (In thousands) March 31, December 31, Current marketable securities: Municipal bonds $ 19,306 $ 9,961 Corporate bonds 18,905 34,589 $ 38,211 $ 44,550 The amortized cost and estimated fair value of marketable securities as of March 31, 2022, are as follows: (In thousands) Amortized Unrealized Estimated Current marketable securities: Municipal bonds $ 19,306 $ (26 ) $ 19,280 Corporate bonds 18,905 (140 ) 18,765 $ 38,211 $ (166 ) $ 38,045 Contingent Consideration The Company has classified its net liability for contingent earn-out considerations to the sellers relating to one acquisition completed during the three months ended March 31, 2022, and two acquisitions completed during fiscal 2021. The fair value for the contingent consideration associated with these acquisitions is within Level 3 of the fair value hierarchy because the associated fair value is determined using significant unobservable inputs, which included the key assumptions to model future revenue, costs of goods sold and operating expense projections. A description of the Company’s acquisitions completed during the three months ended March 31, 2022 and fiscal 2021 are included within Note 15 – Business Combinations, included elsewhere in the notes to the condensed consolidated financial statements. The contingent earn-out payments to the sellers for each acquisition are based on the achievement of certain revenue thresholds. During the three months ended March 31, 2022, the Company accrued $1.4 million relating to the Lab Society acquisition for contingent consideration recorded from the initial purchase price accounting. (In thousands) Three Months ended Year ended Contingent consideration – beginning of period $ 6,137 $ — Accrued contingent consideration 1,420 4,725 Change in estimated fair value — 1,412 Contingent consideration – end of period $ 7,557 $ 6,137 The Company included contingent consideration within accrued expense and other current liabilities in its condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively. Warrant Liabilities In January 2022, the Company issued warrants to purchase up to an aggregate of 15,078 shares of Common Stock in connection with a private placement transaction (the “PIPE Warrants”). The warrants have an exercise price of $1,496.00. In March, 2022, the Company issued warrants to purchase up to an aggregate of 34,406 shares of Common Stock in connection with the issuance of debt (the “SPA Warrants”). The warrants have an exercise price of $1,350.00. The grant date fair value of the PIPE Warrants and the SPA Warrants issued during the three months ended March 31, 2022 was calculated using a Black-Scholes model and was determined to be $40.5 million using the following inputs: PIPE SPA Warrants Warrants Stock price $ 1,100.00 $ 1,228.00 Exercise price $ 1,496.00 $ 1,350.00 Expected term (in years) 5.5 5.5 Annualized volatility 87.53 % 87.57 % Annual rate of quarterly dividends 0.0 % 0.0 % Discount rate -bond equivalent yield 1.65 % 2.12 % The fair value of the PIPE Warrants and the SPA Warrants were remeasured and determined to be $29.7 million at March 31, 2022, using a Black-Scholes model using the following inputs: PIPE SPA Warrants Warrants Stock price $ 926.00 $ 926.00 Exercise price $ 1,496.00 $ 1,350.00 Expected term (in years) 5.3 5.4 Annualized volatility 87.68 % 87.79 % Annual rate of quarterly dividends 0.0 % 0.0 % Discount rate -bond equivalent yield 2.42 % 2.42 % The following table sets forth a summary of the changes in the fair value of the Level 3 warrant liabilities for the three months ended March 31, 2022: (In thousands) Three Months Warrant liabilities – beginning of period $ — Initial fair value of warrant liabilities 40,496 Change in estimated fair value (10,785 ) Warrant liabilities – end of period $ 29,711 |
Loan Receivable
Loan Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Loan Receivable [Abstract] | |
Loan Receivable | Note 7 — Loan Receivable A portion of the capital raised from the Company’s IPO has been allocated to launch Agrify’s total turn-key solution (“TTK Solution”) program. The TTK Solution is industry’s first end-to-end solution that provides access to capital for construction costs, equipment lease(s) to VFUs and other related operating equipment, subscription to the Company’s Agrify Insights software, and business consultation services, which will enable the Company’s customers to go to market faster and better. The Company’s initial allowable investment in the TTK Solution engagements is currently capped at $50.0 million, as approved by the Company’s Board of Directors. As of March 31, 2022 and December 31, 2021, the Company has committed $32.9 million to the Agrify TTK Solution for five customers under contract and $20.3 million to the Agrify TTK Solution for five customers under contract, respectively. Of the five parties who have purchased the Agrify TTK Solution to date, Greenstone Holdings is a related party as of March 31, 2022 and December 31, 2021. The loan agreements entered into with customers receiving the Agrify TTK Solution generally provide for loans ranging from approximately $200 thousand up to $13.5 million with maturity dates of approximately two to three years after the completion of the construction projects. Typically, the TTK Solution construction loans have interest rates ranging from 12% to 18% per year. The breakdown of loans receivable by Company as of March 31, 2022 and December 31, 2021 is as follows: (In thousands) March 31, December 31, Company A – Agrify TTK Solution $ 9,579 $ 5,542 Greenstone Holdings – TTK Solution – Related Party 12,446 11,177 Company C – Agrify TTK Solution 7,479 2,439 Company D – Agrify TTK Solution 3,338 1,105 Company E – Agrify TTK Solution 46 46 Company F – Non-TTK Solution (1) 1,538 1,946 Other – Non-TTK Solutions 312 — Total loan receivable $ 34,738 $ 22,255 (1) Current portion of loan receivable are included within Note 10 – Prepaid Expenses and Other Current Receivables, included elsewhere in the notes to the condensed consolidated financial statements. The Company analyzed whether any of the above customers are a VIE in accordance with ASC 810 and if so, whether the Company is the primary beneficiary requiring consolidation. Based on the Company’s analysis, the Company has determined that Greenstone Holdings is a VIE. As of March 31, 2022, two of the Company’s employees own approximately 36.6% of the equity of Greenstone Holdings, however, since the Company is not the primary beneficiary and does not hold significant influence over Greenstone Holdings business decisions, the Company is not required to consolidate Greenstone Holdings. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | Note 8 — Accounts Receivable Accounts receivable consisted of the following as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Accounts receivable, gross $ 9,986 $ 8,637 Less allowance for doubtful accounts (1,415 ) (1,415 ) Accounts receivable, net $ 8,571 $ 7,222 NEIA, a related party, accounted for $1.3 million and $3.5 million of the Company’s accounts receivable, net as of March 31, 2022 and December 31, 2021, respectively. The changes in the allowance for doubtful accounts consisted of the following: (In thousands) Three Months ended Year ended Allowance for doubtful accounts - beginning of period $ 1,415 $ 54 Provision for doubtful accounts — 1,187 Other adjustments — 174 Allowance for doubtful accounts - end of period $ 1,415 $ 1,415 Bad debt expense was nil |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2022 | |
Inventory [Abstract] | |
Inventory | Note 9 — Inventory Inventories are stated at the lower of cost or net realizable value, with cost principally determined by the weighted-average cost method on a First-In, First-Out basis. Such costs include the acquisition cost for raw materials and operating supplies. The Company’s standard payment terms with suppliers may require making payments in advance of delivery of the Company’s products. The Company’s prepaid inventory is a short-term, non-interest-bearing asset that is applied to the purchase of products once they are delivered. Inventory consisted of the following as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Raw materials $ 7,211 $ 6,393 Prepaid inventory 10,745 2,237 Finished goods 21,975 12,810 Inventory, gross 39,931 21,440 Inventory reserves (942 ) (942 ) Total inventory, net $ 38,989 $ 20,498 Inventory Reserves The Company establishes an inventory reserve for obsolete, slow moving, and defective inventory. The Company calculates inventory reserves for obsolete, slow moving, or defective items as the difference between the cost of inventory and its estimated net realizable value. The reserves are based upon management’s expected method of disposition. Changes in the Company’s inventory reserve are as follows: (In thousands) Three Months ended Year ended Inventory reserves – beginning of period $ 942 $ — Increase in inventory reserves — 942 Inventory write-offs — — Inventory reserves – end of period $ 942 $ 942 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2022 | |
Prepaid Expenses and Other Receivables [Abstract] | |
Prepaid Expenses and Other Current Assets | Note 10 — Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, (In thousands) 2022 2021 Prepaid insurance $ 2,353 $ 492 Prepaid software 151 173 Prepaid expenses, other 1,828 541 Deferred costs 492 353 Other note receivables (1) 1,240 807 Other receivables, other 384 86 Total prepaid expenses and other current assets $ 6,448 $ 2,452 (1) Other note receivables relate to the current portion of one of our TTK Solutions loan receivable balances. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2022 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, Net | Note 11 — Property and Equipment, Net Property and equipment, net consisted of the following as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Computer and office equipment $ 519 $ 473 Furniture and fixtures 458 385 Leasehold improvements 993 841 Machinery and equipment 990 898 Software 210 174 Vehicles 143 143 Research and development laboratory equipment 205 163 Leased equipment at customer 690 619 Trade show assets 80 80 Total property and equipment, gross 4,288 3,776 Accumulated depreciation (1,156 ) (780 ) Construction in progress 3,923 3,236 Total property and equipment, net $ 7,055 $ 6,232 Depreciation expense for the three months ended March 31, 2022 and 2021 was $379 thousand and $90 thousand, respectively. |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Intangible Assets and Goodwill [Abstract] | |
Intangible Assets, Net and Goodwill | Note 12 — Intangible Assets, Net and Goodwill The Company records intangible assets initially at fair value and tests these values periodically for impairment. Goodwill represents the excess of the purchase price over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is tested at least annually for impairment. The Company performs an impairment test of goodwill during the fourth quarter of each year or sooner if indicators of potential impairment arise. There were no such indicators in the three months ended March 31, 2022. Intangible assets, net as of March 31, 2022 was as follows: Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net (In thousands) January 1, Additions March 31, January 1, Expense March 31, January 1, March 31, Trade names $ 2,418 $ 317 $ 2,735 $ (227 ) $ (91 ) $ (318 ) $ 2,191 $ 2,417 Customer Relationships 6,176 713 6,889 (302 ) (247 ) (549 ) 5,874 6,340 Acquired developed Technology 4,911 1,432 6,343 (191 ) (255 ) (446 ) 4,720 5,897 Non-compete 1,202 — 1,202 (60 ) (60 ) (120 ) 1,142 1,082 Capitalized website costs 245 — 245 (100 ) (20 ) (120 ) 145 125 Total $ 14,952 $ 2,462 $ 17,414 $ (880 ) $ (673 ) $ (1,553 ) $ 14,072 $ 15,861 Intangible assets, net as of December 31, 2021 was as follows: Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net (In thousands) January 1, Additions December 31, January 1, Expense December 31, January 1, December 31, Trade names $ 930 $ 1,488 $ 2,418 $ (88 ) $ (139 ) $ (227 ) $ 842 $ 2,191 Customer Relationships 850 5,326 6,176 (89 ) (213 ) (302 ) 761 5,874 Acquired developed Technology — 4,911 4,911 — (191 ) (191 ) — 4,720 Non-compete — 1,202 1,202 — (60 ) (60 ) — 1,142 Capitalized website costs 139 106 245 (48 ) (52 ) (100 ) 91 145 Total $ 1,919 $ 13,033 $ 14,952 $ (225 ) $ (655 ) $ (880 ) $ 1,694 $ 14,072 Amortization expense recorded in general and administrative in the condensed consolidated statements of operations were $673 thousand and $58 thousand for the three months ended March 31, 2022 and 2021, respectively. Estimated amortization expense for the remainder of 2022 and subsequent years for acquired intangible assets: Years ending December 31 (In thousands), Amount Remaining 2022 $ 2,103 2023 2,772 2024 2,763 2025 2,737 2026 2,486 2027 and thereafter 3,000 Total $ 15,861 Goodwill consisted of the following: (In thousands) Three Months ended Year ended Goodwill - beginning of period $ 50,090 $ 632 Goodwill acquired during period 4,368 49,458 Goodwill purchase accounting adjustment 86 — Goodwill - end of period $ 54,544 $ 50,090 |
Other Non-Current Assets
Other Non-Current Assets | 3 Months Ended |
Mar. 31, 2022 | |
Other Non-Current Assets [Abstract] | |
Other Non-Current Assets | Note 13 — Other Non-Current Assets Other non-current assets consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, (In thousands) 2022 2021 Long-term deferred commissions expense $ 3,008 $ 1,101 Security deposits 97 83 Total other non-current assets $ 3,105 $ 1,184 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 14 — Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Accrued acquisition liability (1) $ 11,179 $ 9,198 Sales tax payable (2) 5,520 5,290 Accrued construction costs 8,542 8,803 Compensation related fees 3,232 3,491 Accrued professional fees 466 1,104 Accrued warranty expenses 398 398 Accrued consulting fees — 75 Accrued inventory purchases 536 201 Financing lease liabilities 182 156 Accrued non-income taxes 57 48 Total accrued expenses and other current liabilities $ 30,112 $ 28,764 (1) Accrued acquisition liabilities includes both the contingent consideration and the value of held back Common Stock associated with the 2022 acquisition of Lab Society and the 2021 acquisitions of Precision, Cascade and PurePressure. (2) Sales tax payable primarily represents identified sales and use tax liabilities arising from our acquisition of Precision and Cascade. These amounts are included as part of our initial purchase price allocations and are the subject matter of an indemnification claim under the Precision and Cascade acquisition agreement. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination [Abstract] | |
Business Combination | Note 15 — Business Combination Acquisition of Lab Society On February 1, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Lab Society, Lab Society NewCo, LLC, a newly-formed wholly-owned subsidiary of the Company (“Merger Sub”), Michael S. Maibach Jr., as the Owner Representative thereunder, and each of the shareholders of Lab Society (collectively, the “Owners”), pursuant to which the Company agreed to acquire Lab Society. Concurrently with the execution of the Merger Agreement, the Company consummated the merger of Lab Society with and into Merger Sub, with Merger Sub surviving such merger as a wholly-owned subsidiary of the Company (the “Lab Society Acquisition”). The aggregate consideration for the Lab Society Acquisition consisted of: (a) $4.0 million in cash, subject to certain adjustments for working capital, cash and indebtedness of Lab Society at closing; (b) 2,128 shares of Common Stock (the “Buyer Shares”); and (c) the Earn-out Consideration (as defined below), to the extent earned. The Company withheld 638 of the Buyer Shares issuable to the Owners (the “Holdback Lab Buyer Shares”) for the purpose of securing any post-closing adjustment owed to the Company and any claim for indemnification or payment of damages to which the Company may be entitled under the Merger Agreement. The Holdback Lab Buyer Shares will be released following the twelve-month anniversary of the Closing Date in accordance with and subject to the conditions of the Merger Agreement. The Merger Agreement includes customary post-closing adjustments, representations and warranties and covenants of the parties. The Owners may become entitled to additional consideration with a value of up to $3.5 million based on the eligible net revenues achieved by the Lab Society business during the fiscal years ending December 31, 2022 and December 31, 2023, of which 50% will be payable in cash and the remaining 50% will be payable by issuing shares of Common Stock. Transaction and related costs, consisting primarily of professional fees, directly related to the acquisition, totaled approximately $28 thousand for the three months ended March 31, 2022. All transaction and related costs were expensed as incurred and are included in general and administrative expenses. The Company has prepared purchase price allocations for the business combination with Lab Society on a preliminary basis. Changes to those allocations may occur as additional information becomes available during the respective measurement period (up to one year from the acquisition date). Fair values still under review as of March 31, 2022 include values assigned to identifiable intangible assets and goodwill. The following table sets forth the components and the allocation of the purchase price for the business combination: (In thousands) Purchase price consideration: Estimated closing proceeds $ 4,002 Transaction expenses 80 Closing buyer shares 1,904 Holdback buyer shares 816 Earn-out consideration 1,420 Estimated working capital adjustment (255 ) Fair value of total consideration transferred 7,967 Total purchase price, net of cash acquired $ 7,402 Fair value allocation of purchase price: Cash and cash equivalents $ 565 Accounts receivable 511 Inventory 2,130 Prepaid expenses and other current receivables 55 Right of use assets, net 304 Property and equipment, net 177 Prepaid and refundable taxes 194 Accounts payable, accrued expenses, and other current liabilities (1,224 ) Deferred revenue (963 ) Deferred tax liability (237 ) Finance lease liabilities, current (36 ) Finance lease liabilities, noncurrent (35 ) Operating lease liabilities, current (112 ) Operating lease liabilities, noncurrent (192 ) Acquired intangible assets 2,462 Goodwill 4,368 Total purchase price $ 7,967 Identified intangible assets consist of trade names, technology, and customer relationships. The fair value of intangible assets and the determination of their respective useful lives were made in accordance with ASC 805 and are outlined in the table below: (In thousands) Asset Useful Life Identified intangible assets: Trade names $ 317 5 years Acquired developed technology 1,432 8 years Customer relationships 713 6 years Total identified intangible assets $ 2,462 The Company’s initial fair value estimates related to the various identified intangible assets of Lab Society were determined under various valuation approaches including the Income Approach, Relief-from-Royalty Method, and Discounted Cash Flow Method. These valuation methods require management to project revenues, operating expenses, working capital investment, capital spending and cash flows for the reporting unit over a multiyear period, as well as determine the weighted-average cost of capital to be used as a discount rate. The Company amortizes its intangible assets assuming no residual value over periods in which the economic benefit of these assets is consumed. The amount of revenue of Lab Society included in the condensed consolidated statement of operations from the acquisition date of February 1, 2022 to March 31, 2022 was $1.5 million. Acquisition of Precision and Cascade On September 29, 2021 (the “Execution Date”), the Company entered into a Plan of Merger and Equity Purchase Agreement, as amended by an amendment dated as of October 1, 2021 (as amended, the “Purchase Agreement”), with Sinclair Scientific, LLC, a Delaware limited liability company (“Sinclair”), Mass2Media, LLC, d/b/a PX2 Holdings, LLC, d/b/a Precision Extraction Solutions, a Michigan limited liability company (“Precision”); and each of the equity holders of Sinclair named therein (collectively, the “Sinclair Members”). On October 1, 2021, the Company consummated the transactions contemplated by the Purchase Agreement. Subject to the terms and conditions set forth in the Purchase Agreement, (1) Sinclair transferred, to the Company, and the Company purchased (the “Interest Purchase”) from Sinclair, 100% of the equity interests of Cascade Sciences, LLC, a Delaware limited liability company (“Cascade”), such that immediately after the consummation of such Interest Purchase, Cascade became a wholly-owned subsidiary of the Company, and (2) Precision merged (the “Merger”) with and into a newly-formed wholly-owned subsidiary of the Company, Precision Extraction NewCo, LLC. The aggregate consideration for the Interest Purchase and the Merger consisted of: (a) the sum of $30 million in cash, plus consideration payable to holders of outstanding Sinclair equity awards, subject to certain adjustments for working capital, cash and indebtedness, payable in connection with the Interest Purchase; (b) the number of shares of Common Stock, subject to adjustment, equal to the quotient of (i) $20.0 million divided by (ii) the volume weighted-average price per share of Common Stock on The Nasdaq Capital Market for the 30 consecutive trading days ending on the Execution Date (the “VWAP Price”), issuable in connection with the Merger; and (c) the True-Up Buyer Shares, if any (as defined below), issuable in connection with the Merger. The Purchase Agreement includes customary post-closing adjustments, representations and warranties and covenants of the parties. The Sinclair Members may become entitled to additional shares of Common Stock (the “True-Up Buyer Shares”) and cash (together with the True-Up Buyer Shares, the “Aggregate True-Up Payment) based on the eligible net revenues (as defined in the Purchase Agreement) achieved by the Cascade and Precision businesses during the fiscal year ending December 31, 2021. However, in no event shall the aggregate purchase price paid by the Company pursuant to the terms of the Purchase Agreement, taking into account any Aggregate True-Up Payment in favor of the Sinclair Members, exceed $65.0 million. During the fourth quarter of 2021, the fair value of the contingent earn-out consideration totaled $5.4 million based on Sinclair Members achieving certain revenue targets. Transaction and related costs, consisting primarily of professional fees, directly related to the acquisition, totaled approximately $38 thousand for the three months ended March 31, 2022. All transaction and related costs were expensed as incurred and are included in selling, general and administrative expenses. The purchase price allocation for the business combination has been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the measurement period (up to one year from the acquisition date). The following table sets forth the components and the allocation of the purchase price for the business combination: (In thousands) Purchase price consideration: Cash paid to Sinclair Members at close $ 23,000 Cash contributed to escrow accounts at close 7,000 Cash paid for excess net working capital 1,430 Stock issued at close 14,535 Fair value of contingent consideration to be achieved 3,953 Fair value of total consideration transferred 49,918 Total purchase price, net of cash acquired $ 48,630 Fair value allocation of purchase price: Cash and cash equivalents $ 1,288 Accounts receivable 897 Inventory 6,761 Prepaid expenses and other current receivables 1,736 Property and equipment, net 970 Right of use assets, net 730 Capitalized web costs, net 2 Accounts payable and accrued expenses (9,223 ) Deferred revenue (5,419 ) Long-term debt (1,961 ) Operating lease liabilities, current (392 ) Operating lease liabilities, noncurrent (362 ) Acquired intangible assets 9,889 Goodwill 45,002 Total purchase price $ 49,918 Identified intangible assets consist of trade names, technology, non-compete agreements, and customer relationships. The fair value of intangible assets and the determination of their respective useful lives were made in accordance with ASC 805 and are outlined in the table below: (In thousands) Asset Useful Life Identified intangible assets: Trade names $ 1,260 6 to 7 years Acquired developed technology 3,818 5 years Non-compete agreements 1,202 5 years Customer relationships 3,609 7 to 8 years Total identified intangible assets $ 9,889 The Company’s initial fair value estimates related to the various identified intangible assets were determined under various valuation approaches including the Income Approach, Relief-from-Royalty Method, and Discounted Cash Flow Method. These valuation methods require management to project revenues, operating expenses, working capital investment, capital spending and cash flows for the reporting unit over a multiyear period, as well as determine the weighted-average cost of capital to be used as a discount rate. The Company amortizes its intangible assets assuming no residual value over periods in which the economic benefit of these assets is consumed. Acquisition of PurePressure On December 31, 2021, the Company entered into a Membership Interest Purchase Agreement (the “Pure Purchase Agreement”) with PurePressure, LLC, a Colorado Limited liability company (“PurePressure”) and the members of PurePressure (collectively, the “Members”), Benjamin Britton as the Member Representative thereunder, and each of the Members. Concurrently with the execution of the Pure Purchase Agreement, the Company consummated the acquisition of all the outstanding equity interests of PurePressure, such that immediately after the consummation of such purchase, PurePressure became a wholly-owned subsidiary of the Company (the “Acquisition”). The aggregate consideration for the Acquisition consisted of: (a) $4.0 million in cash, subject to certain adjustments for working capital, cash and indebtedness of PurePressure at closing; (b) 1,646 shares of Common Stock (the “Buyer Shares”); and (c) the Earn-out Consideration (as defined below), to the extent earned. The Company withheld 444 of the Buyer Shares issuable to certain Members (the “Holdback Buyer Shares”) for the purpose of securing any post-closing adjustment owed to the Company and any claim for indemnification or payment of damages to which the Company may be entitled under the Pure Purchase Agreement. The Holdback Buyer Shares will be released following the twelve-month anniversary of the Closing Date in accordance with and subject to the conditions of the Pure Purchase Agreement. The Pure Purchase Agreement includes customary post-closing adjustments, representations and warranties and covenants of the parties. The Members may become entitled to additional consideration with a value of up to $3.0 million based on the eligible net revenues achieved by the PurePressure business during the fiscal years ending December 31, 2022 and December 31, 2023, of which 40% will be payable in cash and the remaining 60% will be payable by issuing shares of Common Stock (collectively, the “Earn-out Consideration”). Transaction and related costs, consisting primarily of professional fees, directly related to the acquisition, totaled approximately $562 thousand for the three months ended March 31, 2022. All transaction and related costs were expensed as incurred and are included in general and administrative expenses. The purchase price allocation for the business combination has been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement period (up to one year from the acquisition date). Fair values still under review as of March 31, 2022 include values assigned to identifiable intangible assets and goodwill. The following table sets forth the components and the allocation of the purchase price for the business combination: (In thousands) Purchase price consideration: Estimated closing proceeds $ 3,613 Indebtedness paid 320 Transaction expenses 115 Closing buyer shares 2,211 Holdback buyer shares 654 Earn-out consideration 707 Estimated working capital adjustments 330 Fair value of total consideration transferred 7,950 Total purchase price, net of cash acquired $ 7,647 Fair value allocation of purchase price: Cash and cash equivalents $ 303 Accounts receivable, net 48 Inventory 1,537 Property and equipment, net 219 Right of use assets, net 191 Prepaid expenses and other current receivables 61 Other non-current assets 16 Accounts payable and accrued expenses (765 ) Deferred revenue (762 ) Operating lease liabilities, current (117 ) Operating lease liabilities, noncurrent (74 ) Finance lease liabilities, current (4 ) Finance lease liabilities, noncurrent (10 ) Notes payable, current (260 ) Notes payable, noncurrent (12 ) Acquired intangible assets 3,037 Goodwill 4,542 Total purchase price $ 7,950 Identified intangible assets consist of trade names, technology, and customer relationships. The fair value of intangible assets and the determination of their respective useful lives were made in accordance with ASC 805 and are outlined in the table below: (In thousands) Asset Useful Life Identified intangible assets: Trade name $ 227 5 years Acquired developed technology 1,093 8 years Customer relationships 1,717 5 years Total identified intangible assets $ 3,037 Subject to certain customary limitations, (i) the Members will indemnify the Company and its affiliates, officers, directors and other agents against certain losses related to, among other things, breaches of the Members’ and PurePressure’s representations and warranties, indebtedness, transaction expenses, pre-closing taxes and the failure to perform covenants or obligations under the Pure Purchase Agreement, and (ii) the Company will indemnify the Members and their respective affiliates, officers, directors and other agents against certain losses related to, among other things, breaches of the Company’s representations and warranties and the failure to perform covenants or obligations under the Pure Purchase Agreement. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt [Abstract] | |
Debt | Note 16 – Debt The Company’s debt consisted of: March 31, December 31, Note payable – SPA Note $ 65,000 $ — PPP Loan 794 804 Other notes payable (1) 1,487 297 Total debt 67,281 1,101 Less: unamortized debt discount (29,303 ) — Total debt, net of debt discount 37,978 1,101 Less: current portion, net of current unamortized debt discount (2,281 ) (1,089 ) Long-term debt $ 35,697 $ 12 (1) Other notes payable relates to one-year insurance premium that was financed over nine-months. Note Payable Securities Purchase Agreement On March 14, 2022, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an accredited investor (the “Investor”), pursuant to which the Company agreed to issue and sell to the Investor, in a private placement transaction, in exchange for the payment by the Investor of $65 million, less applicable expenses, as set forth in the Securities Purchase Agreement, (i) a SPA Note in an aggregate principal amount of $65 million, and (ii) a warrant (the “SPA Warrant”) to purchase up to an aggregate of 34,406 shares of Common Stock. The SPA Note is a senior secured obligation of the Company and ranks senior to all indebtedness of the Company. The Company will be required to make amortization payments equal to 4.0% of the original principal amount of the SPA Note on the first day of each calendar month starting on February 1, 2023 and extending through the maturity date of March 1, 2026 (the “Maturity Date”), at which time all remaining outstanding principal and accrued but unpaid interest will be due. The SPA Note has a stated interest rate of 6.75% per year, and the Company is required to pay interest on March 1, June 1, September 1, and December 1 of each calendar year through the Maturity Date. Following the one-year anniversary of the SPA Note’s issuance, the Company may, in lieu of paying interest in cash, pay such interest in kind, in which case interest on the SPA Note will be calculated at the rate of 8.75% per year and will be added to the principal amount of the SPA Note. At any time following the one-year anniversary of the SPA Note’s issuance, the Company may prepay all (but not less than all) of the SPA Note by redemption at a price equal to 106.75% of the then-outstanding principal amount under the SPA Note, plus accrued but unpaid interest. The Investor will also have the option of requiring the Company to redeem the SPA Note if the Company undergoes a fundamental change at a price equal to 107% of the then-outstanding principal amount under the SPA Note, plus any accrued interest. The Securities Purchase Agreement provides for up to two additional closings subject to certain conditions set forth in the Securities Purchase Agreement and on substantially the same terms as the initial closing. Each subsequent closing would result in the issuance of a senior secured note with an original principal amount of $35.0 million and warrants to purchase shares of Common Stock for up to 65% of such principal amount divided by the closing price of Common Stock on the trading day immediately prior to such subsequent closing. The SPA Note imposes certain customary affirmative and negative covenants upon the Company, as well as covenants that (i) restrict the Company and its subsidiaries from incurring any additional indebtedness or suffering any liens, subject to specified exceptions, (ii) restrict the ability of the Company and its subsidiaries from making certain investments, subject to specified exceptions, (iii) restrict the declaration of any dividends or other distributions, subject to specified exceptions, (iv) require the Company to maintain specified earnings and adjusted EBITDA targets, and (v) require the Company to maintain minimum amounts of cash on hand. If an event of default under the SPA Note occurs, the Investor can elect to redeem the SPA Note for cash equal to 115% of the then-outstanding principal amount of the SPA Note (or such lesser principal amount accelerated by the Investor), plus accrued and unpaid interest, including default interest, which accrues at a rate per year equal to 15% from the date of a default or event of default. Until the date the SPA Note is fully repaid, the Investor has, subject to certain exceptions, the right to participate for up to 30% of any debt, Preferred Stock or equity-linked financing of the Company or its subsidiaries. Each SPA Warrant issued in the initial closing has an exercise price of $1,350.00 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, is immediately exercisable, has a term of five and one-half years from the date of issuance and is exercisable on a cash basis, unless there is not an effective registration statement covering the resale of the shares issuable upon exercise of the SPA Warrant (the “SPA Warrant Shares”), in which case the SPA Warrant is also exercisable on a cashless exercise basis at the Investor’s election. The Securities Purchase Agreement requires the Company to file resale registration statements with respect to the SPA Warrant Shares as soon as practicable and in any event within 45 days following the initial closing and any subsequent closings. The SPA Warrant provides that in no event will the number of shares of Common Stock issued upon exercise of the SPA Warrant result in the Investor’s beneficial ownership exceeding 4.99% of the Company’s shares outstanding at the time of exercise (which percentage may be decreased or increased by the Investor, but to no greater than 9.99%, and provided that any increase above 4.99% will not be effective until the sixty-first day after notice of such request by the Investor to increase its beneficial ownership limit has been delivered to the Company). The Securities Purchase Agreement also contains customary representations and warranties of the Company and the Investor. There is no material relationship between the Company or its affiliates and the Investor other than in respect of the Securities Purchase Agreement, the SPA Note and the SPA Warrant. The following table provides a breakdown of the note payable balances as of March 31, 2022: (In thousands) Balance at Additions Payments Amortization Balance at Accrued interest expense $ — (98 ) — — $ (98 ) Principal $ — $ 65,000 $ — $ — $ 65,000 Notes payable, discount — (29,527 ) — 224 (29,303 ) Net carrying amount $ — $ 35,473 $ — $ 224 $ 35,697 The following table summarizes short-term and long-term portion of the SPA Note as of March 31, 2022: (In thousands) Short-Term Long-Term Notes Principal $ 5,200 $ 59,800 $ 65,000 Unamortized discount (5,200 ) (24,103 ) (29,303 ) Net carrying amount $ — $ 35,697 $ 35,697 As of March 31, 2022, future minimum payments were as follows: Years ending December 31 (In thousands), Remaining 2022 $ — 2023 28,600 2024 31,200 2025 5,200 Total future payments $ 65,000 Paycheck Protection Program Loan Paycheck Protection Program Loans under the Coronavirus Aid, Relief, and Economic Security Act In May 2020, the Company entered into a PPP Loan with Bank of America pursuant to the PPP under the CARES Act administered by the SBA. The Company received total proceeds of approximately $779 thousand from the unsecured PPP Loan, which is scheduled to mature on May 7, 2022. Subject to certain conditions, the PPP Loan may be forgiven in whole or in part by applying for forgiveness pursuant to the CARES Act and the PPP. The Company’s submission to have the remaining $779 thousand PPP Loan forgiven is currently being reviewed by the SBA. If the remaining principal amount from the $779 thousand PPP Loan is not forgiven in full, the Company would be obligated to repay any principal amount not forgiven and interest accrued thereon. As of March 31, 2022 and December 31, 2021, all of our PPP Loan balances were reported as current portion of long-term debt in the accompanying condensed consolidated balance sheets. PurePressure SBA Debt As part of the acquisition of PurePressure, $159 thousand of debt remained outstanding from a standard SBA loan as of December 31, 2021. This debt has subsequently been paid as a part of the PurePressure acquisition. |
Convertible Promissory Notes
Convertible Promissory Notes | 3 Months Ended |
Mar. 31, 2022 | |
Convertible Promissory Notes [Abstract] | |
Convertible Promissory Notes | Note 17 — Convertible Promissory Notes On January 11, 2021, the Company’s Board of Directors and shareholders approved the amendment to the conversion formula of the Convertible Promissory Notes (the “Convertible Notes”) issued by the Company on dates between August 2020 and November 2020. Pursuant to the amendment, immediately prior to the consummation of a public transaction, the outstanding principal amount of the Convertible Notes, together with all accrued and unpaid interest, shall convert into a number of fully paid and non-assessable shares of Common Stock, at a conversion price of $1,544.00. While the original conversion feature was bifurcated from the host instrument, the Company determined that the amended conversion feature would not require bifurcation. Since the accounting for the conversion feature changed because of the amendment, the Company applied extinguishment accounting pursuant to its accounting policy. Accordingly, the Company recognized a gain on extinguishment of $2.7 million in connection with the derecognition of the net carrying amount of the extinguished debt of $19.6 million (inclusive of $13.1 million of principal, $7.1 million of derivative liabilities, less $587 thousand of debt discount) and the recognition of the $16.9 million fair value of the new convertible notes (including the same principal amount of $13.1 million plus the $3.8 million fair value of the beneficial conversion feature). On February 1, 2021, in conjunction with the closing of the Company’s IPO, the Convertible Notes in the aggregate principal amount of $13.1 million were converted into 8,485 shares of Common Stock at the election of the Company at a conversion price of $1,544.00 per share. |
Capital Structure
Capital Structure | 3 Months Ended |
Mar. 31, 2022 | |
Capital Structure [Abstract] | |
Capital Structure | Note 18 — Capital Structure On January 9, 2020, the Company increased its authorized number of shares of Common Stock to 265,000, consisting of: 250,000 shares of Common Stock, and 3,000,000 shares of Preferred Stock. At that time, it also designated 100,000 shares of the 3,000,000 authorized shares of Preferred Stock, as Series A Convertible Preferred Stock (“Series A Preferred Stock”). Series A Convertible Preferred Stock Beginning in the first quarter of 2020, the Company issued an aggregate of 60,000 shares of Series A Preferred Stock, for an aggregate purchase price of $6.0 million. In May 2020, the Company completed an offering of Series A Preferred Stock with the issuance of an additional 40,000 shares of Series A Preferred Stock for an aggregate purchase price of $4.0 million. Amendment of Conversion Formulas On January 11, 2021, the Company’s Board of Directors approved the amendment to the conversion formula of the Series A Preferred Stock and Convertible Notes. After the amendment: 1. the Series A Preferred Stock is convertible, at any time after issuance or immediately prior to the closing of a public transaction, into Common Stock in an amount of shares equal to (i) the product of the Series A Preferred Stock original price plus accrued but unpaid dividends on the shares being converted, multiplied by the number of shares of Series A Preferred Stock being converted, divided by (ii) a conversion price of $7.72 per share (after the reverse split taking effect); and 2. immediately prior to the consummation of a public transaction, the outstanding principal amount of the Convertible Notes together with all accrued and unpaid interest shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the quotient of (i) the outstanding principal amount of the Convertible Notes together with all accrued and unpaid interest thereunder immediately prior to such public transaction divided by (ii) a conversion price of $7.72 (after the reverse split taking effect). On January 11, 2021, the Company’s shareholders approved the amendment to the Series A Preferred Stock. Initial Public Offering On February 1, 2021, the Company completed an IPO for the sale of 27,000 shares of Common Stock at a price of $2,000.00 per share. The Company also granted the underwriters: (a) a 45-day option to purchase up to 4,050 additional shares of Common Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the IPO, and (b) warrants to purchase 810 shares of Common Stock (equal to 3% of the aggregate number of shares of Common Stock issued in the IPO) at an exercise price of $2,500.00 per share (which is equal to 125% of the IPO price). Subsequently, the underwriters exercised the over-allotment option, and on February 4, 2021, the Company closed on the sale of an additional 4,050 shares of Common Stock for a price of $2,000.00 per share and granted to the underwriters warrants to purchase 121 additional shares of Common Stock (equal to 3% of the amount of shares issued as part of the exercised of the over-allotment option) at an exercise price of $2,500.00 per share. The exercise of the over-allotment option brought the total number of shares of Common Stock sold by the Company in connection with the IPO to 31,050 shares and the total net proceeds received in connection with the IPO to approximately $57.0 million, after deducting underwriting discounts and estimated offering expenses. Immediately prior to the closing of the Company’s IPO, all outstanding shares of Series A Preferred Stock and Convertible Notes were converted into 6,865 shares of Common Stock and 8,485 shares of Common Stock, respectively, at a conversion price of $1,544.00 per share. Subsequent Public Offering On February 19, 2021, the Company consummated a secondary public offering (the “February Offering”) for the sale of 27,778 shares of Common Stock for a price of $2,700.00 per share. The Company also granted the underwriters: (a) a 45-day option to purchase up to 4,167 additional shares of Common Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the February Offering, and (b) warrants to purchase 833 shares of Common Stock (equal to 3% of the aggregate number of shares of Common Stock issued in the February Offering) at an exercise price of $3,375.00 per share (which is equal to 125% of the February Offering). Subsequently, the underwriters exercised the over-allotment option, and on March 22, 2021, the Company closed on the sale of an additional 4,167 shares of Common Stock for a price of $2,700.00 per share and granted to the underwriters warrants to purchase 125 additional shares of Common Stock (equal to 3% of the amount of shares issued as part of the exercised of the over-allotment option) at an exercise price of $3,375 per share. The exercise of the over-allotment option brought the total number of shares of Common Stock sold by the Company in connection with the February Offering to 31,944 shares and the total net proceeds received in connection with the February Offering to approximately $80.0 million, after deducting underwriting discounts and estimated offering expenses. Private Placement On January 25, 2022, the Company entered into a Securities Purchase Agreement (the “Securities Agreement”) with an institutional investor and other accredited investors for the sale by the Company of (i) 12,252 shares (the “SA Shares”) of Common Stock, (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 7,853 shares of Common Stock and (iii) warrants to purchase up to an aggregate of 15,079 shares of Common Stock (the “Common Warrants” and, collectively with the Pre-Funded Warrants, the “SA Warrants”), in a private placement offering. The combined purchase price for one share of Common Stock (or one Pre-Funded Warrant) and accompanying fraction of a Common Warrant was $1,360.00. Subject to certain ownership limitations, the SA Warrants are exercisable six months from issuance. Each Pre-Funded Warrant was exercisable into one share of Common Stock at a price per share of $0.00001 (as adjusted from time to time in accordance with the terms thereof). Each Common Warrant is exercisable into one share of Common Stock at a price per share of $1,496.00 (as adjusted from time to time in accordance with the terms thereof) and will expire on the fifth anniversary of the initial exercise date. The institutional investor that received the Pre-Funded Warrants fully exercised such warrants in March 2022. Raymond Chang, Chairman and Chief Executive Officer of the Company, and Stuart Wilcox, a member of the Company’s Board of Directors, participated in the private placement on essentially the same terms as other investors, except for having a combined purchase price of $1,380.00 per share. The gross proceeds to the Company from the private placement were approximately $27.3 million, before deducting the placement agent’s fees and other offering expenses, and excluding the proceeds, if any, from the exercise of the SA Warrants. Issuance of Common Stock in Connection with Acquisitions On October 1, 2021, the Company issued an aggregate of 3,332 shares of its Common Stock to the Precision and Cascade shareholders in connection with the Company’s acquisition of Precision and Cascade. Refer to Note 15 – Business Combinations, included elsewhere in the notes to the condensed consolidated financial statements. On December 31, 2021, the Company issued an aggregate of 1,202 shares of its Common Stock to the PurePressure shareholders in connection with the Company’s acquisition of PurePressure. Refer to Note 15 – Business Combinations, included elsewhere in the notes to the condensed consolidated financial statements. On February 1, 2022, the Company issued an aggregate of 1,491 shares of its Common Stock to the Lab Society shareholders in connection with the Company’s acquisition of Lab Society. Refer to Note 15 – Business Combinations, included elsewhere in the notes to the condensed consolidated financial statements. 2020 Omnibus Equity Incentive Plan On December 18, 2020, the Company’s Board of Directors, and on January 11, 2021, the Company’s stockholders, adopted and approved the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which replaced the 2019 Stock Option Plan (the “2019 Plan”). The 2020 Plan provides for the grant of stock options, SARs, performance share awards, performance unit awards, distribution equivalent right awards, restricted stock awards, restricted stock unit awards and unrestricted stock awards to non-employee directors, officers, employees and non-employee consultants of the Company or its affiliates. The aggregate number of shares of Common Stock that may be reserved and available for grant and issuance under the 2020 Plan is 22,669 shares. Shares will be deemed to have been issued under the 2020 Plan solely to the extent actually issued and delivered pursuant to an award. If any award granted under the 2019 Plan or the 2020 Plan expires, is cancelled, or terminates unexercised or is forfeited, the number of shares subject thereto is again available for grant under the 2020 Plan. The 2020 Plan shall continue in effect, unless sooner terminated, until the tenth anniversary of the date on which it is adopted by the Board of Directors. Stock-based Compensation The Company’s stock option compensation expense was $953 thousand and $2.1 million for the three months ended March 31, 2022 and 2021, respectively, and there was $3.4 million of total unrecognized compensation cost related to unvested options granted under the Company’s options plans as of March 31, 2022. This stock option expense will be recognized through 2025. The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying Common Stock, expected option life, and expected volatility in the market value of the underlying Common Stock. No stock options were granted during the three months ended March 31, 2022. The following table summarizes the Company’s assumptions used in the valuation of options granted during the year ended December 31, 2021: Volatility 40% Risk-free interest rate 1.10% – 1.63% Dividend yield 0.00% 0% Expected life (years) 10 Forfeiture rate 0.00% The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. The risk-free interest rate is based upon quoted market yields for United States Treasury debt securities with a term similar to the expected term. The expected dividend yield is based upon the Company’s history of having never issued a dividend and management’s current expectation of future action surrounding dividends. The Company calculates the expected volatility of the stock price based on the corresponding volatility of the Company’s peer group stock price for a period consistent with the underlying instrument’s expected term. The expected lives for such grants were based on the simplified method for employees and directors. In arriving at stock-based compensation expense, the Company estimates the number of stock-based awards that will be forfeited due to employee turnover. The Company’s forfeiture assumption is based primarily on its employee turnover historical experience. If the actual forfeiture rate is higher than the estimated forfeiture rate, then an adjustment will be made to increase the estimated forfeiture rate, which will result in a decrease to the expense recognized in the Company’s financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, then an adjustment will be made to lower the estimated forfeiture rate, which will result in an increase to expense recognized in the Company’s financial statements. The expense the Company recognizes in future periods will be affected by changes in the estimated forfeiture rate and may differ significantly from amounts recognized in the current period. Stock Option Activity As of March 31, 2022, there were 2,580 shares of Common Stock available to be granted under the Company’s 2020 Plan. The following table presents option activity under the Company’s stock option plans for the three months ended March 31, 2022 and 2021: (In thousands, except share and per share data) Number of Weighted-Average Aggregate Options outstanding at January 1, 2021 15,666 $ 702.00 $ — Granted 6,005 2,558.00 Exercised (871 ) 502.00 Forfeited (1,384 ) 734.00 Expired (21 ) 456.00 Options outstanding at March 31, 2021 19,395 $ 1,284.00 $ — Options outstanding at January 1, 2022 17,821 1,436.00 $ 62.64 Granted — — Exercised (21 ) 460.00 Forfeited (758 ) 1,370.00 Expired (267 ) 3,546.00 Options outstanding at March 31, 2022 16,775 $ 1,406.00 $ 12.23 Options vested and exercisable as of March 31, 2022 10,562 $ 1,108.00 Options vested and expected to vest as of March 31, 2022 15,967 $ 1,380.00 The following table summarizes information about options vested and exercisable at March 31, 2022: Options Vested and Exercisable Price ($) Number of Weighted-Average Weighted-Average Exercise Price $ 456.00 4,210 8.14 $ 456.00 $ 972.00 4,174 8.57 $ 972.00 $ 1,536.00-$2,898.00 2,178 8.82 $ 2,624.00 The following table summarizes information about options expected to vest after March 31, 2022: Options Vested and Expected to Vest Price ($) Number of Weighted-Average Weighted-Average Exercise Price $ 456.00 5,073 8.14 $ 456.00 $ 972.00 5,375 8.57 $ 972.00 $ 1,536.00-$2,898.00 5,519 8.82 $ 2,628.00 Warrants As of March 31, 2022, warrants to purchase 50,780 shares of Common Stock were outstanding. The following table presents the Company’s warrant activity for the three months ended March 31, 2022 and 2021: Number Weighted-Average Exercise Price Warrants outstanding at December 31, 2020 4,140 $ 4.00 Granted 1,890 4.00 Exercised (4,672 ) 4.00 Warrants outstanding at March 31, 2021 1,358 $ 4.00 Warrants outstanding at December 31, 2021 1,358 $ 4.00 Granted 57,339 1,204.00 Exercised (7,917 ) 0.00 Warrants outstanding at March 31, 2022 50,780 $ 1,360.00 The Company received proceeds from the exercise of warrants of less than $1 thousand and $5 thousand during the three months ended March 31, 2022 and March 31, 2021, respectively. |
Employee Benefit Plan
Employee Benefit Plan | 3 Months Ended |
Mar. 31, 2022 | |
Employee Benefit Plan [Abstract] | |
Employee Benefit Plan | Note 19 — Employee Benefit Plan The Company maintains an employee’s savings and retirement plan under Section 401(k) of the Internal Revenue Code (the “401k Plan”). All full-time U.S. employees become eligible to participate in the 401k Plan. The Company’s contribution to the 401k Plan is discretionary. During the three months ended March 31, 2022 and 2021, the Company did not contribute to the 401k Plan. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | Note 20 — Income Taxes The Company’s effective income tax rate was 2.0% and 0.0% for the three months ended March 31, 2022 and 2021, respectively. The provision for (benefit from) income taxes was approximately $(200) thousand and $0 for the three months ended March 31, 2022 and 2021, respectively. The difference between the Company’s effective tax rates for the 2022 and 2021 periods and the U.S. statutory tax rate of 21% was primarily due a valuation allowance recorded against certain deferred tax assets. The change in the provision for (benefit from) income taxes for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was primarily due to a discrete income tax benefit of approximately $(200) thousand recorded during the first quarter of 2022, which is attributable to a non-recurring partial release of the Company’s U.S. valuation allowance as a result of the Lab Society acquisition. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Net Loss Per Share [Abstract] | |
Net Income (Loss) Per Share | Note 21 — Net Income (Loss) Per Share Net income (loss) per share calculations for all periods have been adjusted to reflect the Company’s Reverse Stock Split. Net income (loss) per share was calculated based on the weighted-average number of its Common Stock then outstanding. Basic net income (loss) per share is calculated using the weighted-average number of Common Stock outstanding during the periods. Net income (loss) per share, assuming dilution, is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including Common Stock equivalents and convertible securities. For periods during which the Company recorded a net income (loss), diluted net income (loss) per share is equal to basic net income (loss) per share because the effect of dilutive securities outstanding during the periods, including options and warrants computed using the treasury stock method, is anti-dilutive. The components of basic and diluted net income (loss) per share were as follows: Three Months ended (In thousands, except share and per share data) 2022 2021 Numerator: Net income (loss) attributable to Agrify Corporation $ 1,780 $ (3,810 ) Accrued dividend attributable to Preferred A Stockholders — (61 ) Net income (loss) available for common shareholders $ 1,780 $ (3,871 ) Denominator: Weighted-average common shares outstanding – basic (1) 122,946 57,841 Effect of dilutive securities Options outstanding 4,807 — Warrants outstanding 1,292 — Weighted-average common shares outstanding – diluted (1) 129,045 57,841 Net income (loss) per share attributable to Common Stockholders – basic (1) $ 14.48 $ (65.87 ) Net income (loss) per share attributable to Common Stockholders – diluted (1) $ 13.79 $ (65.87 ) (1) Periods presented have been adjusted to reflect the 1-for-10 reverse stock split on October 18, 2022 and the 1-for-20 reverse stock split on July 5, 2023. Additional information regarding the reverse stock splits may be found in Note 1 – , included elsewhere in the notes to the condensed consolidated financial statements. As of March 31, 2021, the Company excluded the following securities from net loss per share as the effect of including them would have been anti-dilutive. The shares shown represent the number of shares of Common Stock which would be issued upon conversion in the period shown below: March 31, Options outstanding 19,395 Warrants outstanding 4,830 24,225 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 22 — Commitments and Contingencies Leases The determination if any arrangement contained a lease at its inception was done based on whether or not the Company has the right to control the asset during the contract period. The lease term was determined assuming the exercise of options that were reasonably certain to occur. Leases with a lease term of 12 months or less at inception were not reflected in the Company’s balance sheet and those lease costs are expensed on a straight-line basis over the respective term. Leases with a term greater than 12 months were reflected as non-current right-of-use assets and current and non-current lease liabilities in the Company’s condensed consolidated balance sheets. As the implicit interest rate in its leases was generally not known, the Company’s used its incremental borrowing rate as the discount rate for purposes of determining the present value of its lease liabilities. At March 31, 2022, the Company’s weighted-average discount rate utilized for its leases was 7.32%. When a contract contained lease and non-lease elements, both were accounted as a single lease component. The Company had several non-cancellable finance leases for machinery and equipment. The Company’s finance leases have remaining lease terms of one five The Company had several non-cancellable operating leases for corporate offices, warehouses, showrooms, research and development facilities and vehicles. The Company’s leases have remaining lease terms of one five Additional information on the Company’s lease activity, for the three months ended March 31, 2022 and 2021, is as follows: Three Months ended (In thousands) 2022 2021 Operating lease cost $ 254 $ 14 Finance lease cost: Amortization of right-of-use assets 48 45 Interest on lease liabilities 9 12 Short-term lease cost — — Total lease cost $ 311 $ 71 March 31, March 31, Weighted-average remaining lease term – operating leases 2.27 years 1.81 years Weighted-average remaining lease term – finance leases 2.78 years 3.73 years Weighted-average discount rate – operating leases 6.63 % 8.13 % Weighted-average discount rate – finance leases 8.01 % 8.10 % (In thousands) March 31, December 31, Right-of-use assets, net $ 1,962 $ 1,859 Operating lease liabilities, current 911 814 Operating lease liabilities, non-current 689 704 Total operating lease liabilities $ 1,600 $ 1,518 Finance lease liabilities, current $ 182 $ 156 Finance lease liabilities, non-current 275 293 Total finance lease liabilities $ 457 $ 449 Maturities of operating and finance lease liabilities as of March 31, 2022 are as follows: Years ending December 31 (In thousands), Operating Finance Remaining 2022 $ 705 $ 163 2023 606 194 2024 250 92 2025 107 50 2026 63 16 Total minimum lease payments 1,731 515 Less imputed interest (131 ) (58 ) Total lease liabilities $ 1,600 $ 457 Legal Proceedings On January 5, 2021, the Company received a demand letter from Nicholas Cooper and Richard Weinstein, (two of the Company’s former employees), and one of Mr. Cooper’s affiliated entities, asserting that Messrs. Cooper and Weinstein were entitled to compensation arising out of their employment by the Company, and their partial ownership of TriGrow Systems, LLC which had been acquired by the Company. The demand letter asserts that Messrs. Cooper and Weinstein are due certain sales commissions under their applicable bonus plan, equity earn-outs based on certain sales targets, and various equity purchases through the Company’s employee stock ownership plan. The demand letter also asserts various employment claims, including but not limited to, statutory wage withholding violations, wrongful termination, breach of contract, breach of the duty of good faith and fair dealing, fraud in the inducement, promissory estoppel, minority shareholder oppression, breach of fiduciary duty, unjust enrichment, and violations of state and federal securities laws. On January 19, 2021, Messrs. Cooper and Weinstein filed a lawsuit against the Company in the United States District Court for the Western District of Washington, alleging the same claims made in their demand letter based on the facts disclosed above. The plaintiffs are seeking relief in the form of monetary damages in an amount to be determined. Messrs. Cooper and Weinstein are also seeking relief in the form of reinstatement and Mr. Weinstein is seeking rescission of his previously executed Release of Claims Agreement. On March 10, 2021, the Company moved to dismiss all Messrs. Cooper and Weinstein’s claims, asserting that the claims failed to allege legal grounds for relief. On May 12, 2021, a Magistrate issued a preliminary Report and Recommendation, which recommended dismissal of certain of Messrs. Cooper and Weinstein’s claims, and recommended others for additional factual discovery. On July 27, 2021, a District Judge entered an order partially adopting the Report and Recommendation, dismissing one claim with prejudice, dismissing a second claim with leave to amend, and permitting the remaining claims to proceed. Additionally, on July 29, 2021, the Company filed a separate arbitration in Boston, Massachusetts against Messrs. Cooper and Weinstein, in which the Company alleges that Messrs. Cooper and Weinstein were liable for certain conduct during the time they were TriGrow employees, including breach of fiduciary duty, unjust enrichment, usurpation of corporate opportunity, conversion, fraudulent concealment, and false representation. Also on July 29, 2021, the Company submitted a claim for indemnification to certain legacy TriGrow Systems, LLC. shareholders. The claim for indemnification relates to conduct by Messrs. Cooper and Weinstein during the time they were TriGrow employees. The Company does not believe these claims have any merit and intends to vigorously defend its position. Supply Agreement with Mack Molding Co. In December 2020, the Company entered into a five-year supply agreement with Mack Molding Co. (“Mack”) pursuant to which Mack will become a key supplier of VFUs. In February 2021, the Company placed a purchase order with Mack amounting to approximately $5.2 million towards initial production of VFUs during 2021. In September 2021, the Company increased the purchase order with Mack to approximately $11.5 million towards production of VFUs during 2021 and 2022. The Company believes the supply agreement with Mack will provide the Company with increased scaling capabilities and the ability to more efficiently meet the potential future demand of its customers. The supply agreement contemplates that, following an introductory period, the Company will negotiate a minimum percentage of the VFU requirements that the Company will purchase from Mack each year based on the agreed-upon pricing formula. The introductory period is not time-based but rather refers to the production of an initial number of units after which the parties have rights to adjust pricing and negotiate a certain minimum requirements percentage. The Company believes this approach will result in both parties making a more informed decision with respect to the pricing and other terms of the supply agreement with Mack. Distribution Agreements with Related Party On September 7, 2019, the Company entered into a distribution agreement with Bluezone Products, Inc. (“Bluezone”) for distribution rights to the Bluezone products with certain exclusivity rights. The agreement requires minimum purchases amounting to $480 thousand and $600 thousand for the first and second contract anniversary years. The agreement auto renews for successive one-year periods unless earlier terminated. In March 2021, the Company notified Bluezone of non-renewal of the agreement which means it ended on May 31, 2021. The Company exceeded the minimum purchase amount for the first year and purchased approximately $309 thousand of the committed $660 thousand second year purchases through December 31, 2021. Bluezone is a related party to the Company. Committed Purchase Agreement with Greenstone Holdings On December 29, 2021, Greenstone Holdings purchased 239 VFUs from the Company of which 60 VFUs were already in Greenstone Holdings possession under a lease agreement. Under the lease agreement, Greenstone Holdings owed Agrify a production service fee of $300 per pound of flower produced and contained an option to purchase the equipment within the lease agreement. The term of this agreement was for ten years, but it was terminated upon signing the purchase agreement for the 239 VFUs. There is no remaining obligation under the lease agreement. The remaining 179 VFUs were shipped to Greenstone Holdings storage facility on December 30, 2021 and December 31, 2021. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2022 | |
Related Parties [Abstract] | |
Related Parties | Note 23 — Related Parties Some of the officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available. The following table describes the net purchasing (sales) activity with entities identified as related parties to the Company: Three Months ended (In thousands) 2022 2021 Bluezone $ 5 $ — 4D Bios (1) — 447 Cannae Policy Group 25 — Topline Performance Group 32 — NEIA (634 ) (5,460 ) Greenstone Holdings (637 ) — Valiant Americas, LLC 4,951 1,077 Living Greens Farm — (58 ) (1) Purchases from 4D Bios for the three months ended March 31, 2021 include $384 thousand for a down payment on inventory orders. The following table summarizes net related party (payable) receivable as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Cannae Policy Group $ — $ (8 ) Cannaquip (21 ) (21 ) Greenstone Holdings 12,446 11,177 Living Greens Farm 34 34 NEIA 1,344 3,500 Valiant Americas, LLC — (922 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 24 — Subsequent Events Bud & Mary’s Litigation On September 15, 2022, the Company provided a notice of default to Bud & Mary’s and certain related parties notifying such parties that Bud & Mary’s was in default of its obligations under the Bud & Mary TTK Agreement. On October 5, 2022, Bud & Mary’s filed a complaint in the Superior Court of Massachusetts in Suffolk County naming the Company as defendant. Bud & Mary’s is seeking, among other relief, monetary damages in connection with alleged unfair or deceptive trade practices, breach of contract and conversion arising from the Agreement. While the Company believes the claim is without merit and will continue to vigorously defend itself against Bud & Mary’s allegations, litigation is inherently unpredictable and there can be no assurance that the Company will prevail in this matter. During the third quarter of 2022, the Company deemed it necessary to fully reserve for the outstanding $14.7 million note receivable balance outstanding due to the current litigation and the uncertainty of the customer’s ability to repay the outstanding balance. The $14.7 million represents the amount of the contingent loss that the Company has determined to be reasonably possible and estimable. The actual cost of resolving this matter may be higher or lower than the amount the Company has reserved. In addition, $5.3 million of the notes receivable balance for work performed during the third quarter of 2022 has been recorded as an unbilled note receivable and deferred the revenue to a future period. The Company has recognized the expenses associated with the work completed in the current period due to the uncertainty of the Company’s ability to recover the funds owed by the customer and its obligations to the vendors that have performed this work. The Company determined that it will only recognize unbilled notes receivable revenue if cash is collected from the customer in a future period. Approval of Issuance of Shares Upon Exercise of Warrants On October 14, 2022, the Company received approval for the issuance of up to 105,544 shares of Common Stock upon the exercise of the in connection with the issuance of a senior secured note and the exchange of previously issued warrants in August 2022, and the reduction of the exercise price of certain of those warrants under certain circumstances, was approved. Note 10 – Debt, included elsewhere in the notes to the consolidated financial statements. At The Marketing Offering In October 2022, the Company entered into the ATM Program with the Agent. The ATM Program allows the Company to sell shares of Common Stock pursuant to specific parameters defined by the Company as well as those defined by the SEC and the ATM Program agreement. Subsequent to the quarter ended September 30, 2022, as of November 7, 2022, the Company sold 306,628 shares of Common Stock, under the ATM at an average price of $50.80 per share, resulting in gross proceeds to the Company of $15.6 million, and net proceeds of $15.1 million after commissions and fees to the Agent totaling $468 thousand. $3.1 million of the proceeds under the ATM Program were used to repay amounts due to the Investor under the Exchange Note. The ATM allows for quick and agile sales of Common Stock to interested investors and provides an opportunity to raise additional capital for working capital requirements or to fund strategic opportunities that may present themselves from time to time. The Company has used, and intends to continue to use, the net proceeds generated from the ATM Program for working capital and general corporate purposes, including repayment of indebtedness, funding its transformation initiatives and product category expansion efforts and capital expenditures. Nasdaq Deficiency Notices On October 4, 2022, the Company received a deficiency letter (the “Notice”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the bid price for the Company’s Common Stock had closed below $1.00 per share, which is the minimum closing price required to maintain a continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company had 180 calendar days to regain compliance with the Minimum Bid Requirement. To regain compliance with the Minimum Bid Requirement, the closing bid price of the Company’s Common Stock must be at least $1.00 per share for a minimum of 10 consecutive trading days during this 180-day compliance period, unless the Staff exercises its discretion to extend the minimum trading day period pursuant to Nasdaq Listing Rule 5810(c)(3)(G). On October 28, 2022, the Staff notified the Company that the closing bid price for its Common Stock was more than $1.00 for 10 consecutive trading days, and that the Company therefore regained compliance with the Minimum Bid Requirement. On April 18, 2023, the Company received a notice from Nasdaq stating that because the Company had not yet filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, the Company is no longer in compliance with Nasdaq Listing Rule 5250(c)(1). Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission. As disclosed by the Company on Form 8-K filed on April 17, 2023, the Company’s audit committee concluded that, as a result of inadvertent errors in the accounting for warrants previously issued by the Company, it was appropriate to restate the Company’s previously issued unaudited condensed consolidated interim financial statements as of and for the quarterly periods ended March 31, 2022, June 30, 2022 and September 30, 2022. Given the scope of the process for preparing the Amended 10-Qs, the Company was unable to complete and file the Form 10-K by the required due date of March 31, 2023. The Notice states that the Company has 60 calendar days from April 18, 2023, or until June 20, 2023, to regain compliance by filing the Form 10-K or to submit to Nasdaq a plan to regain compliance with the Nasdaq Listing Rules. On May 17, 2023, the Company received a second notice from Nasdaq that the Company remains noncompliant with the Nasdaq Listing Rule 5250(c)(1) as a result of its failure to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 with the SEC by the required due date. This notice requires the Company to submit a plan to regain compliance with the continued listing requirements by June 20, 2023. If Nasdaq accepts the Company’s plan, then Nasdaq may, in its discretion, grant the Company up to 180 days from the prescribed due date for filing the Form 10-K, or until October 16, 2023, to regain compliance. On August 16, 2023, the Company received a third notice from Nasdaq that the Company remains noncompliant with the Nasdaq Listing Rule 5250(c)(1) as a result of its failure to file its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 with the SEC by the required filing date. This notice noted that Nasdaq has previously granted the Company an exception until September 30, 2023, to file its Form 10-K and First Quarter Form 10-Q. This notice also requires the Company to update its original plan to regain compliance with the filing requirement, including the Company’s plans to file the Second Quarter Form 10-Q, and indicate the progress the Company has made towards implementing the plan submitted in connection with the Initial Delinquent Filing. Agrify-Valiant On October 27, 2022, the Company provided notice to Valiant-America, LLC that the Company intended to begin the winding up of Agrify-Valiant. Appointment of Raymond Chang as principal financial and accounting officer and Resignation of Timothy Oakes and Chief Financial Officer On January 6, 2023, Timothy Oakes, the Chief Financial Officer of Agrify Corporation (the “Company”), resigned effective February 28, 2023. In connection with Mr. Oakes’ resignation, the Company has engaged WilliamsMarston LLC to assist with accounting and internal control matters and is continuing its process to identify a replacement Chief Financial Officer. Further, Raymond Chang, the Company’s Chief Executive Officer, will serve as the Company’s principal financial and accounting officer. Bowdoin Litigation On February 22, 2023, Bowdoin Construction Corp. (“Bowdoin”) filed a complaint in the Superior Court of Massachusetts in Norfolk County naming the Company, Bud & Mary’s and certain related parties as defendants. The Bowdoin Complaint relates to a construction contract between Bowdoin and Agrify relating to the property that is the subject of the Bud & Mary’s Complaint and alleges breach of contract by Bud & Mary’s and by Agrify due to nonpayment of approximately $7.0 million due under the contract and related indemnification claims and mechanics’ liens. While the Company believes the claim is without merit and will continue to vigorously defend itself against Bowdoin’s allegations, litigation is inherently unpredictable and there can be no assurance that the Company will prevail in this matter. Amendments to Articles of Incorporation On March 1, 2023, the Company filed Articles of Amendment (the “Charter Amendment”) to its Articles of Incorporation with the Secretary of State for the State of Nevada. The Charter Amendment increased the number of authorized shares of the Company’s Common Stock from 100,000,000 to 200,000,000, and correspondingly increased the total authorized shares of stock from 103,000,000 to 203,000,000. The Charter Amendment was approved by the Company’s stockholders at the Special Meeting on February 28, 2023 and became effective upon filing. Securities Exchange Agreement On March 8, 2023, the Company entered into a new Securities Exchange Agreement (the “Exchange Agreement”) with an accredited lender. Pursuant to the Exchange Agreement, at closing the Company will prepay approximately $10.3 million in principal amount under the Exchange Note and exchange $10.0 in principal amount of the remaining balance of the Exchange Note for a new senior secured convertible note (the “Convertible Note”) with an original principal amount of $10.0 million. The Convertible Note will be a senior secured obligation of the Company and will rank senior to all indebtedness of the Company. The Convertible Note will mature on August 19, 2025 and will contain a 9.0% annualized interest rate, with interest to be paid monthly, in cash, beginning April 1, 2023. Concurrently with the closing under the Exchange Agreement, the Company and the Lender will enter into an Amendment to the Exchange Note (the “Note Amendment”). Pursuant to the Note Amendment, the Exchange Note will be amended to, among other changes, remove covenants that require the Company not to exceed maximum levels of allowable cash spend while the Exchange Note is outstanding and require the Company to maintain minimum amounts of cash on hand. On April 26, 2023, the Company entered into a letter agreement with the above referenced accredited lender (the “Letter Agreement”), pursuant to which the Company and the lender agreed to exchange $2.0 million of the remaining outstanding principal amount under the Exchange Note for 8,903,927 shares of common stock of the Company, subject to a Beneficial Ownership Limitation of 4.99% of the Company’s Common Stock. Issuance of Unsecured Promissory Note On July 12, 2023, the Board of Directors of the Company approved the issuance of an unsecured promissory note in favor of GIC Acquisition, LLC (the “Investor”), an entity that is owned and managed by Raymond Chang, the Company’s Chairman and Chief Executive Officer. Pursuant to the Note, the Investor will lend up to $500,000 to the Company. The Note bears interest at a rate of 10% per annum, will mature in full on August 6, 2023, and may be prepaid without any fee or penalty. The Note ranks junior to all existing secured indebtedness of the Company. Leases As of March 31, 2023, the Company extended its lease by three years until March 31, 2026, for the premises located at 2468 Industrial Row Dr., Troy, Michigan 48084. As of May 23, 2023, the Company extended its lease by three years until July 31, 2026, for the premises located at 2625 S. Santa Fe Dr., Bldg. 1, Units 1H and 1IJ. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Preparation of Condensed Consolidated Financial Statements | Preparation of Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and filed with the SEC (“Form 10-K”), except for the recently adopted accounting pronouncements described below. The condensed consolidated financial statements included herein reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company’s condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2022 and 2021, and the condensed consolidated cash flows for the three months ended March 31, 2022 and 2021. The condensed consolidated balance sheet as of December 31, 2021 is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 31, 2022. The results for interim periods are not necessarily indicative of a full year’s results. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Accounting for Wholly-Owned Subsidiaries The accompanying condensed consolidated financial statements have been prepared in accordance with GAAP and include the accounts of Agrify Corporation and its wholly-owned subsidiaries, as described above in Note 1 – Nature of Business and Basis of Presentation, in accordance with the provisions required by the Consolidation Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The Company includes results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated. Accounting for Less Than Wholly-Owned Subsidiaries For the Company’s less than wholly-owned subsidiaries, which include TPI, Agrify-Valiant, and Agrify Brands, the Company first analyzes whether these entities are a variable interest entity (a “VIE”) in accordance with ASC Topic 810 Consolidation (“ASC 810”), and if so, whether the Company is the primary beneficiary requiring consolidation. A VIE is an entity that has (i) insufficient equity to permit it to finance its activities without additional subordinated financial support or (ii) equity holders that lack the characteristics of a controlling financial interest. The financial results of a VIE are consolidated by the primary beneficiary, which is the entity that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that potentially could be significant to the entity. Variable interests in a VIE are contractual, ownership or other financial interests in a VIE that change with changes in the fair value of the VIE’s net assets. The Company continuously re-assesses (i) whether the joint venture is a VIE, and (ii) if the Company is the primary beneficiary of the VIE. If it is determined that the joint venture qualifies as a VIE and the Company is the primary beneficiary, the Company’s financial interest in the VIE is consolidated. Based on the Company’s analysis for these entities, the Company has determined that Agrify-Valiant, LLC and Agrify Brands, LLC are each a VIE, and that the Company is the primary beneficiary. While the Company owns 60% of Agrify-Valiant, LLC’s equity interests and 75% of Agrify Brands, LLC’s equity interests, the remaining equity interests in Agrify-Valiant, LLC and Agrify Brands, LLC are owned by unrelated third parties, and the agreement with these third parties provides the Company with greater voting rights. Accordingly, the Company consolidates its interest in the financial statements of Agrify-Valiant, LLC and Agrify Brands, LLC under the VIE rules, and reflects the third parties’ interests in the condensed consolidated financial statements as a non-controlling interest. The Company records this non-controlling interest at its initial fair value, adjusting the basis prospectively for the third parties’ share of the respective consolidated investments’ net income or loss or equity contributions and distributions. These non-controlling interests are not redeemable by the equity holders and are presented as part of permanent equity. Income and losses are allocated to the non-controlling interest holders based on its economic ownership percentage. The investment in 50% of the shares of TPI is treated as an equity investment as the Company cannot exercise significant influence. |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of expenses. The Company bases its estimates on historical experience, known trends and other market-specific, other relevant factors that it believes to be reasonable under the circumstances and management’s judgement. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual financial results could differ from those estimates. |
Fiscal Year | Fiscal Year The Company, and its Subsidiaries, fiscal year ends on December 31, each year. |
Emerging Growth Company | Emerging Growth Company The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act. As a result, the Company is permitted to, and intends to, rely on exemptions from certain disclosure requirements that are applicable to companies that are not emerging growth companies. In addition, the JOBS Act provides that an “emerging growth company” can use the extended transition period for complying with new or revised accounting standards. The Company will remain an “emerging growth company” until the earliest to occur of: ● reporting $1.0 billion or more in annual gross revenues; ● the issuance, in a three-year period, of more than $1.0 billion in non-convertible debt; ● the end of the fiscal year in which the market value of Common Stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; or ● December 31, 2026. |
Reclassifications | Reclassifications Certain amounts in the Company’s prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. In this Form 10-Q, the Company has reclassified selling, general and administrative expenses to two separate line items in the accompanying condensed consolidated statement of operations as general and administrative expenses and selling and marketing expenses for the three months ended March 31, 2022 and 2021. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents consist principally of cash and deposits with maturities of three months or less as of March 31, 2022 and December 31, 2021. All cash equivalents are carried at cost, which approximates fair value. Restricted cash represents cash required to be held as collateral for the Company’s senior secured promissory note (the “SPA Note”). Accordingly, these balances contain restrictions as to their availability and usage and are classified as restricted cash in the condensed consolidated balance sheets. Refer to Note 16 – Debt, included elsewhere in the notes to the condensed consolidated financial statements. Cash deposits with financial institutions, including restricted cash and restricted marketable securities, generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts. Balances held in a brokerage account are disclosed on the balance sheet as restricted cash. |
Marketable Securities | Marketable Securities The Company’s marketable security investments primarily include investments held in mutual funds, municipal bonds, and corporate bonds. The mutual funds are recorded at fair value in the accompanying condensed consolidated balance sheets as part of cash and cash equivalents. The municipal and corporate bonds are considered to be held-to-maturity securities and are recorded at amortized cost in the accompanying condensed consolidated balance sheets. The fair value of these investments were estimated using recently executed transactions and market price quotations. The Company considers current assets to be those investments which will mature within the next 12 months, including interest receivable on the long-term bonds. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net, primarily consists of amounts for goods and services that are billed and currently due from customers. Accounts receivable balances are presented net of an allowance for credit losses, which is an estimate of billed amounts that may not be collectible. In determining the amount of the allowance at each reporting date, management makes judgments about general economic conditions, historical write-off experience, and any specific risks identified in customer collection matters, including the aging of unpaid accounts receivable and changes in customer financial conditions. Accounts receivable balances are written off after all means of collection are exhausted and the potential for non-recovery is determined to be probable. Adjustments to the allowance for credit losses are recorded as general and administrative expenses in the condensed consolidated statements of operations. |
Concentration of Credit Risk and Significant Customer | Concentration of Credit Risk and Significant Customer Financial instruments that potentially subject the Company to a concentration of credit risk primarily consist of cash and accounts receivable. The Company places its cash with financial institutions in the United States. The cash balances are insured by the FDIC up to $250 thousand per depositor with unlimited insurance for funds in noninterest-bearing transaction accounts through March 31, 2022. At times, the amounts in these accounts may exceed the federally insured limits. The Company has certain customers from whom revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represent 10% or more of the Company’s total accounts receivable. Refer to the following tables below. Revenue For the three months ended March 31, 2022 and 2021, the Company’s customers that accounted for 10% or more of the total revenue were as follows: Three Months ended Three Months ended (In thousands) Amount % of Total Amount % of Total New England Innovation Academy (“NEIA”) – Related Party * * $ 5,460 77.9 % Customer C $ 3,793 14.6 % * * Customer D $ 4,697 18.1 % * * * Customer revenue, as a percentage of total revenue was less than 10% Accounts Receivable, Net As of March 31, 2022 and December 31, 2021, the Company’s customers that accounted for 10% or more of the total accounts receivable, net, were as follows: As of As of (In thousands) Amount % of Total Amount % of Total NEIA – Related Party $ 1,344 15.7 % $ 3,498 48.4 % Customer B $ 1,541 18.0 % $ 1,541 21.3 % Customer E $ 1,217 14.2 % * * * Customer accounts receivable balance, as a percentage of total accounts receivable balance, was less than 10% |
Inventories | Inventories The Company values all of its inventories, which consist primarily of significant raw material hardware components, at the lower of cost or net realizable value, with cost principally determined by the weighted-average cost method on a First-In, First-Out basis. Write-offs of potentially slow moving or damaged inventory are recorded through specific identification of obsolete or damaged material. The company takes physical inventory at least once annually at all inventory locations. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Useful Life Computer and office equipment 2 to 3 Furniture and fixtures 2 Software 3 Vehicles 5 Research and development laboratory equipment 5 Machinery and equipment 3 to 5 Leased equipment at customer 5 to 13 Trade show assets 3 to 5 Leasehold improvements Lower of estimated useful life or remaining lease term The estimated useful lives of the Company’s property and equipment are periodically assessed to determine if changes are appropriate. The Company charges maintenance and repairs to expense as incurred. When the Company retires or disposes assets, the carrying cost of these assets and related accumulated depreciation or amortization are eliminated from the condensed consolidated balance sheet and any resulting gain or loss are included in the condensed consolidated statement of operations in the period of retirement or disposal. Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service. |
Goodwill | Goodwill Goodwill is defined as the excess of cost over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is tested for impairment annually, and more frequently if events and circumstances indicate that the asset might be impaired. The Company has determined that it is a single reporting unit for the purpose of conducting the goodwill impairment assessment. A goodwill impairment charge is recorded if the amount by which the Company’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Factors that could lead to a future impairment include material uncertainties such as a significant reduction in projected revenues, a deterioration of projected financial performance, future acquisitions and/or mergers, and/or a decline in the Company’s market value as a result of a significant decline in the Company’s stock price. Based upon the Company’s 2021 annual impairment testing analyses, including the consideration of reasonably likely adverse changes in assumptions described above, the Company determined that there are no goodwill impairments to date. |
Intangible Assets | Intangible Assets The Company initially records intangible assets at their estimated fair values and reviews these assets periodically for impairment. Identifiable intangible assets, which consist principally of acquired customer related acquired assets, acquired and/or developed technology, non-compete agreements, and trade names, are reported net of accumulated amortization, and are being amortized over their estimated useful lives at amortization rates that are proportional to each asset’s estimated economic benefit. The Company’s intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The Company reviews the carrying value of these intangible assets annually, or more frequently if indicators of impairment are present. The finite-lived useful lives are as follows: Trade names 5 to 7 years Acquired developed technology 5 to 8 years Non-compete agreements 5 years Customer relationships 5 to 8 years Capitalized website costs 3 to 5 years In performing the review of the recoverability of intangible assets, the Company considers several factors, including whether there have been significant changes in legal factors or the overall business climate that could affect the underlying value of an asset. The Company also considers whether there is an expectation that the asset will be sold or disposed of before the end of its remaining estimated useful life. If, as the result of examining any of these factors, the Company concludes that the carrying value of intangible asset exceeds its estimated fair value, the Company recognizes an impairment charge and reduces the carrying value of the asset to its estimated fair value. |
Distinguishing Liabilities from Equity | Convertible Notes Payable The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with ASC Topic 815 Derivatives and Hedging (“ASC815”). The accounting treatment of derivative financial instruments requires that the Company identify and record certain embedded conversion options (“ECOs”), certain variable-share settlement features, and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. Bifurcated embedded conversion options, variable-share settlement features and any related freestanding instruments are recorded as a discount to the host instrument which is amortized to interest expense over the life of the respective note using the effective interest method. If the Company determines that an instrument is not a derivative liability, it then evaluates whether there is a beneficial conversion feature (“BCF”), by comparing the commitment date fair value to the effective current conversion price of the instrument. The Company records a BCF as debt discount which is amortized to interest expense over the life of the respective note using the effective interest method. BCFs that are contingent upon the occurrence of a future event are recognized when the contingency is resolved. |
Debt Issue Costs and Debt Discount | Debt Issue Costs and Debt Discount The Company may record debt issuance costs and/or debt discounts in connection with issuing of debt. The Company may cover these costs by paying cash or issuing or equity (such as warrants). These costs are amortized to interest expense over the expected life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Original Issue Discount | Original Issue Discount For certain convertible debt issued by the Company, it may provide the debt holder with an original issue discount. The Company would record the original issue discount to debt discount, reducing the face amount of the note, and is then amortized to interest expense over the life of the debt. |
Distinguishing Liabilities from Equity | Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet (“temporary equity”). The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. Initial Measurement The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. Subsequent Measurement – Financial instruments classified as liabilities The Company records the fair value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial instruments classified as liabilities are recorded as other income, net. |
Leases | Leases The Company determines at the inception of a right-of-use asset contract if such arrangement is or contains a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company classifies leases at the lease commencement date as operating or finance leases and records a right-of-use asset and a lease liability on its condensed consolidated balance sheet for all leases with an initial lease term of greater than 12 months. A lease with an initial term of 12 months or less is not recorded on the balance sheet, but related payments are recognized as expense on a straight-line basis over the lease term. The Company’s right-of-use asset contracts may contain both lease and non-lease components. Non-lease components may include maintenance, utilities, and other operating costs. The Company combines the lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, such as utilities or maintenance costs, are not included in the measurement of right-of-use assets and lease liabilities, but rather are expensed when the event determining the amount of variable consideration to be paid occurs. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of future lease payments over the expected lease term. The Company determines the present value of future lease payments by using its estimated secured incremental borrowing rate for that lease term as the interest rate implicit in the lease is not readily determinable. The Company estimates its secured incremental borrowing rate for each lease based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. Certain of the Company’s right-of-use asset leases include options to extend or terminate the lease. The amounts determined for the Company’s right-of-use assets and lease liabilities generally do not assume that renewal options or early-termination provisions, if any, are exercised, unless it is reasonably certain that the Company will exercise such options. |
Deferred Revenue | Deferred Revenue Deferred revenue includes amounts collected or billed in excess of revenue that it can recognize. The Company recognizes deferred revenue as revenue as the related performance obligation is satisfied. The Company records deferred revenue that will be recognized during the succeeding twelve-month period as a current liability on the condensed consolidated balance sheet. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash, accounts receivable, warrants, accounts payable and accrued expenses. The estimated fair value of the accounts receivable and accounts payable approximates their carrying value due to the short-term nature of these instruments. |
Stock-Based Compensation | Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. Historically, the Company has issued stock options to employees, directors and consultants with only service-based vesting conditions and records the expense for these awards using the straight-line method. The Company classifies stock-based compensation expense in its condensed consolidated statements of operations and comprehensive loss in the same manner in which the award’s recipient’s payroll costs are classified. The Company estimates the fair value of each stock option grant on the date of grant using the Black-Scholes option-pricing model. Before the IPO, the Company was a private company and therefore lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of similar publicly-traded companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. |
Business Combinations | Business Combinations The Company accounts for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed. The Company’s management exercises significant judgments in determining the fair value of assets acquired and liabilities assumed, as well as intangibles and their estimated useful lives. Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company’s current and future operating results. Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to the fair value of assets and liabilities made after the end of the measurement period are recorded within the Company’s operating results. For contingent consideration arrangements, the Company recognizes a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in operations. Additional information regarding the Company’s contingent consideration arrangements may be found in Note 6 – Fair Value Measures, included elsewhere in the notes to the condensed consolidated financial statements. |
Revenue Recognition | Revenue Recognition Overview The Company generates revenue from the following sources: (1) equipment sales, (2) providing services and (3) construction contracts. In accordance with ASC 606 “Revenue Recognition”, the Company recognizes revenue from contracts with customers using a five-step model, which is described below: ● identify the customer contract; ● identify performance obligations that are distinct; ● determine the transaction price; ● allocate the transaction price to the distinct performance obligations; and ● recognize revenue as the performance obligations are satisfied. Identify the customer contract A customer contract is generally identified when there is approval and commitment from both the Company and its customer, the rights have been identified, payment terms are identified, the contract has commercial substance and collectability, and consideration is probable. Specifically, the Company obtains written/electronic signatures on contracts and a purchase order, if said purchase orders are issued in the normal course of business by the customer. Identify performance obligations that are distinct A performance obligation is a promise by the Company to provide a distinct good or service or a series of distinct goods or services. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determine the transaction price The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding sales taxes that are collected on behalf of government agencies. Allocate the transaction price to distinct performance obligations The transaction price is allocated to each performance obligation based on the relative standalone selling prices (“SSP”) of the goods or services being provided to the customer. The Company’s contracts typically contain multiple performance obligations, for which the Company accounts for individual performance obligations separately, if they are distinct. The standalone selling price reflects the price the Company would charge for a specific piece of equipment or service if it was sold separately in similar circumstances and to similar customers. Recognize revenue as the performance obligations are satisfied Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer. Significant Judgments The Company enters into contracts that may include various combinations of equipment, services and construction, which are generally capable of being distinct and accounted for as separate performance obligations. Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Once the Company determines the performance obligations, it determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. The Company then allocates the transaction price to each performance obligation in the contract based on the SSP. The corresponding revenue is recognized as the related performance obligations are satisfied. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP based on the price at which the performance obligation is sold separately and the methods of estimating SSP under the guidance of ASC 606-10-32-33. If the SSP is not observable through past transactions, the Company estimates the SSP, taking into account available information such as market conditions, expected margins, and internally approved pricing guidelines related to the performance obligations. The Company licenses its software as a SaaS type subscription license, whereby the customer only has a right to access the software over a specified time period. The full value of the contract is recognized ratably over the contractual term of the SaaS subscription, adjusted monthly if tiered pricing is relevant. The Company typically satisfies its performance obligations for equipment sales when equipment is made available for shipment to the customer; for services sales as services are rendered to the customer and for construction contracts both as services are rendered and when contract is completed. The Company utilizes the cost-plus margin method to determine the SSP for equipment and build-out services. This method is based on the cost of the services from third parties, plus a reasonable markup that the Company believes is reflective of a market-based reseller margin. The Company determines the SSP for services in time and materials contracts by observable prices in standalone services arrangements. The Company estimates variable consideration in the form of royalties, revenue share, monthly fees, and service credits at contract inception and updated at the end of each reporting period if additional information becomes available. Variable consideration is typically not subject to constraint. Changes to variable consideration were not material for the periods presented. If a contract has payment terms that differ from the timing of revenue recognition, the Company will assess whether the transaction price for those contracts include a significant financing component. The Company has elected the practical expedient that permits an entity to not adjust for the effects of a significant financing component if the Company expects that at the contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service, will be one year or less. For those contracts in which the period exceeds the one-year threshold, this assessment, as well as the quantitative estimate of the financing component and its relative significance, requires judgment. Accordingly, the Company imputes interest on such contracts at an agreed upon interest rate and will present the financing components separately as financial income. For the three months ended March 31, 2022 and 2021, the Company did not have any such financial income. Payment terms with customers typically require payment 30 days from the invoice date. The Company’s agreements with its customers do not provide for any refunds for services or products and therefore no specific reserve for such is maintained. In the infrequent instances where customers raise a concern over delivered products or services, the Company has endeavored to remedy the concern and all costs related to such matters have been insignificant in all periods presented. The Company has elected to treat shipping and handling activities after the customer obtains control of the goods as a fulfillment cost and not as a promised good or service. Accordingly, the Company will accrue all fulfillment costs related to the shipping and handling of consumer goods at the time of shipment. The Company has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money. Sales, value add, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company receives payment from customers based on specified terms that are generally less than 30 days from the satisfaction of performance obligations. There are no contract assets related to performance under the contract. The difference in the opening and closing balances of the Company’s deferred revenue primarily results from the timing difference between the Company’s performance and the customer’s payment. The Company fulfills obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. Accounts receivables are recorded when the customer has been billed or the right to consideration is unconditional. The Company recognizes deferred revenue when consideration has been received or an amount of consideration is due from the customer, and the Company has a future obligation to transfer certain proprietary products. In accordance with ASC 606-10-50-13, the Company is required to include disclosure on its remaining performance obligations as of the end of the current reporting period. Due to the nature of the Company’s contracts, these reporting requirements are not applicable. The majority of the Company’s remaining contracts meet certain exemptions as defined in ASC 606-10-50-14 through 606-10-50-14A, including (i) performance obligation is part of a contract that has an original expected duration of one year or less and (ii) the right to invoice practical expedient. The Company generally provides a one-year warranty on its products for materials and workmanship but may provide multiple-year warranties as negotiated, and will pass on the warranties from its vendors, if any, which generally covers this one-year period. In accordance with ASC 450-20-25, the Company accrues for product warranties when the loss is probable and can be reasonably estimated. The reserve for warranty returns is included in accrued expenses and other current liabilities in the Company’s condensed consolidated balance sheets. |
Research and Development Costs | Research and Development Costs The Company expenses research and development costs as incurred. Research and development expenses include payroll, employee benefits and other expenses associated with product development. The Company incurs research and development costs associated with the development and enhancement of both hardware and software products associated with its cultivation and extraction equipment, as well as its SaaS-based software offering, Agrify Insights software. |
Capitalization of Internal Software Development Costs | Capitalization of Internal Software Development Costs The Company capitalizes certain software engineering efforts related to the continued development of Agrify Insights software under ASC 985-20. Costs incurred during the application development phase are only capitalized once technical feasibility has been established and the work performed will result in new or additional functionality. The types of costs capitalized during the application development phase include employee compensation, as well as consulting fees for third-party software developers working on these projects. Costs related to the research and development are expensed as incurred until technical feasibility is established as well as post-implementation activities. Internal-use software is amortized on a straight-line basis over the estimated useful life of the asset, which ranges from two to five years. |
Shipping and Handling Charges | Shipping and Handling Charges The Company incurs costs related to shipping and handling of its manufactured products. These costs are expensed as incurred as a component of cost of goods sold. Shipping and handling charges related to the receipt of raw materials are also incurred, which are recorded as a cost of the related inventory. |
Equity Method Investments | Equity Method Investments Investments in affiliates which are 50% or less owned by the Company for which the Company exercises significant influence but does not have control are accounted for using the equity method. The Company has investments in equity investments without readily determinable fair values, which represents investments in entities where the Company does not have the ability to significantly influence the operations of the entities. An assessment of whether or not the Company (as a holder of 50% of TPI) has the power to direct activities that most significantly impact TPI’s economic performance and to identify the party that obtains the majority of the benefits of the investment was performed as of March 31, 2022 and December 31, 2021 and will be performed as of each subsequent reporting date. After each of these assessments, the Company concluded that the activities that most significantly impact TPI’s economic performance are the growth, marketing, sale, and distribution of products using TPI’s technology and IP, each of which are solely directed by TPI. Based on our consideration of these assessments, the Company concluded that the Company’s investment in TPI should be accounted for under the equity method. The carrying value of the Company’s investment in TPI was $0 as of March 31, 2022 and December 31, 2021. The Company did not recognize revenue from TPI for the three months ended March 31, 2022 and March 31, 2021. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC Topic 740, “Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provisions of ASC 740-10-25-5, “Basic Recognition Threshold.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10-25-6, the benefit of a tax position is recognized in the condensed consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of March 31, 2022, tax years 2016 through 2021 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years. The Company recognizes the benefit of a tax position when it is effectively settled. ASC 740-10-25-10, “Basic Recognition Threshold” provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. ASC 740-10-25-10 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority. For tax positions considered effectively settled, the Company recognizes the full amount of the tax benefit. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company presents basic and diluted net income (loss) per share attributable to Common Stockholders in conformity with the two-class method required for participating securities. We compute basic income (loss) per share by dividing net income (loss) available to Common Stockholders by the weighted-average number of common shares outstanding. Net income (loss) available to Common Stockholders represents net income (loss) attributable to Common Stockholders reduced by the allocation of earnings to participating securities. Diluted income per share adjusts basic income per share for the potentially dilutive impact of stock options and warrants. For periods during which the Company recorded a net loss, diluted net loss per share is equal to basic net loss per share because the effect of dilutive securities outstanding is anti-dilutive. Net income (loss) per share calculations for all periods have been adjusted to reflect the Reverse Stock Split effected on January 12, 2021. Net income (loss) per share was calculated based on the weighted-average number of Common Stock outstanding. |
Restatement of Current Period (
Restatement of Current Period (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Restatement of Current Period [Abstract] | |
Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Balance Sheet | The following is a summary of the impact of the restatement and reclassifications on the Company’s condensed consolidated balance sheet: March 31, 2022 Adjustments Previously Warrants Reverse Debt Restated Assets Current assets Cash and cash equivalents $ 25,205 — — — $ 25,205 Restricted cash 30,000 — — — 30,000 Marketable securities 38,211 — — — 38,211 Accounts receivable, net of allowance for doubtful accounts of $1,415 8,571 — — — 8,571 Inventory, net of reserves of $942 38,989 — — — 38,989 Prepaid and refundable taxes 194 — — — 194 Prepaid expenses and other current assets 6,373 — — 75 6,448 Total current assets 147,543 147,618 Non-Current Assets Loan receivable 34,738 — — — 34,738 Property and equipment, net 7,055 — — — 7,055 Right-of-use assets, net 1,554 — — — 1,554 Goodwill 54,544 — — — 54,544 Intangible assets, net 15,861 — — — 15,861 Other non-current assets 3,180 — — (75 ) 3,105 Total Assets $ 264,475 $ 264,475 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 3,683 — — — $ 3,683 Accrued expenses and other current liabilities 30,112 — — — 30,112 Operating lease liabilities, current 911 — — — 911 Long-term debt, current 2,970 (689 ) — — 2,281 Deferred revenue 4,182 — — — 4,182 Total current liabilities 41,858 41,169 Non-current liabilities Warrant liabilities — 29,711 — — 29,711 Other non-current liabilities 275 — — — 275 Operating lease liabilities, non-current 689 — — — 689 Deferred tax liabilities, net 62 — — — 62 Long-term debt 51,154 (15,457 ) — — 35,697 Total liabilities 94,038 107,603 Commitments and contingencies (Note 22) Stockholders’ equity Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 shares issued and outstanding 25 — (25 ) — 0 Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding — — — — — Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding — — — — — Additional paid-in capital 237,903 (24,227 ) 25 — 213,701 Accumulated deficit (67,857 ) 10,662 — — (57,195 ) Total stockholders’ equity attributable to Agrify 170,071 156,506 Non-controlling interests 366 — — — 366 Total liabilities and stockholders’ equity $ 264,475 $ 264,475 |
Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Operations | The following is a summary of the impact of the restatement and reclassifications on the Company’s condensed consolidated statement of operations: Three Months ended March 31, 2022 Adjustment Previously Warrants Reverse Restated Revenue (including $1,271 from related parties) $ 26,021 — — $ 26,021 Cost of goods sold 21,851 — — 21,851 Gross profit 4,170 4,170 General and administrative 9,759 — — 9,759 Research and development 2,084 2,084 Selling and marketing 2,090 — — 2,090 Total operating expenses 13,933 13,933 Loss from operations (9,763 ) (9,763 ) Interest income, net 682 (123 ) — 559 Change in fair value of warrant liabilities — 10,785 — 10,785 Gain on extinguishment of notes payable — — — — Other income, net 682 10,662 — 11,344 Net (loss) income before income taxes (9,081 ) 10,662 — 1,581 Income tax benefit (200 ) — — (200 ) Net (loss) income (8,881 ) 10,662 — 1,781 Income attributable to non-controlling interest 1 — — 1 Net (loss) income attributable to Agrify Corporation $ (8,882 ) $ 10,662 $ 1,780 Net (loss) income per share attributable to Common Stockholders – basic $ (0.36 ) $ 0.43 $ 14.41 $ 14.48 Net (loss) income per share attributable to Common Stockholders -- diluted $ (0.36 ) $ 0.43 $ 13.72 $ 13.79 Weighted-average common shares outstanding – basic 24,589,113 — (24,466,167 ) 122,946 Weighted-average common shares outstanding – diluted 24,589,113 — (24,460,068 ) 129,045 |
Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Cash Flows | The following is a summary of the impact of the restatement and reclassifications on the Company’s condensed consolidated statement of cash flows: Three Months ended March 31, 2022 Previously Adjustment Cash flows from operating activities Reported Warrants Restated Net income (loss) attributable to Agrify Corporation $ (8,882 ) 10,662 $ 1,780 Adjustments to reconcile net loss (income) attributable to Agrify Corporation to net cash used in operating activities: Depreciation and amortization 1,052 — 1,052 Amortization of premium on investment securities 224 — 224 Amortization of debt discount 20 203 223 Amortization of issuance costs — 143 143 Interest on investment securities (248 ) — (248 ) Debt issuance costs 2,700 (2,700 ) — Deferred income taxes (200 ) — (200 ) Compensation in connection with the issuance of stock options 953 — 953 Non-cash interest (income) (406 ) — (406 ) Change in fair value of warrant liabilities — (10,785 ) (10,785 ) Gain on extinguishment of notes payable, net — — — Early termination of lease 26 — 26 Income attributable to non-controlling interests 1 — 1 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable (838 ) — (838 ) Inventory (16,361 ) — (16,361 ) Prepaid expenses and other current assets (3,033 ) 2,143 (890 ) Right of use assets, net (20 ) — (20 ) Other non-current assets (1,867 ) 1,867 — Accounts payable (2,765 ) (73 ) (2,838 ) Accrued expenses and other current liabilities (2,120 ) — (2,120 ) Deferred (expense), net (2,407 ) 1,836 (571 ) Net cash used in operating activities (34,171 ) 3,296 (30,875 ) Cash flows from investing activities Purchases of property and equipment (3,728 ) — (3,728 ) Purchase of securities (76,097 ) — (76,097 ) Proceeds from the sale of securities 82,460 — 82,460 Issuance of loan receivable (12,487 ) — (12,487 ) Cash paid for business combinations, net of cash acquired (3,513 ) — (3,513 ) Net cash used in investing activities (13,365 ) — (13,365 ) Cash flows from financing activities Proceeds from issuance of debt and warrants in private placement, net 65,000 (2,595 ) 62,405 Proceeds from issuance of Common Stock and warrants in private placement, net of fees 25,797 — 25,797 Proceeds from IPO, net of fees — — — Proceeds from Secondary public offering, net of fees — — — Proceeds from exercise of options 10 — 10 Proceeds from exercise of warrants 1 — 1 Payments on other financing loans — (273 ) (273 ) Payments on insurance financing loan — (428 ) (428 ) Payments of financing leases (81 ) — (81 ) Net cash provided by financing activities 90,727 (3,296 ) 87,431 Net increase in cash, cash equivalents, and restricted cash 43,191 — 43,191 Cash, cash equivalents, and restricted cash at the beginning of period 12,014 — 12,014 Cash, cash equivalents, and restricted cash at the end of period $ 55,205 $ 55,205 Cash, cash equivalents, and restricted cash at end of period Cash and cash equivalents $ 25,205 — $ 25,205 Restricted cash 30,000 — 30,000 Total cash, cash equivalents, and restricted cash at the end of period $ 55,205 $ 55,205 Supplemental disclosures of non-cash flow information Initial fair value of warrants — 40,496 $ 40,496 Financing of prepaid insurance — 1,928 $ 1,928 |
Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity | The following is a summary of the impact of the restatement and reclassifications on the Company’s condensed consolidated statement of stockholders’ equity as of March 31, 2022: Common Stock Common Stock Additional Additional Accumulated Accumulated Total Total Non-Controlling Non-Controlling Total Total Shares Amount Shares Amount Balance at January 1, 2022 22,207,103 $ 21 111,035 — $ 196,013 $ 196,034 $ (58,975 ) $ (58,975 ) $ 137,059 $ 137,059 $ 365 $ 365 $ 137,424 $ 137,424 Stock-based compensation — — — — 953 953 — — 953 953 — — 953 953 Issuance of Common Stock and warrants in private placement 2,450,350 2 12,252 — 25,795 14,800 — — 25,797 14,800 — — 25,797 14,800 Issuance of debt and warrants in private placement — — — — 13,230 — — — 13,230 — — — 13,230 — Acquisition of Lab Society 297,929 — 1,490 — 1,903 1,903 — — 1,903 1,903 — — 1,903 1,903 Exercise of options 4,220 — 21 — 10 10 — — 10 10 — — 10 10 Exercise of warrants 1,583,288 2 7,916 — (1 ) 1 — — 1 1 — — 1 1 Net income — — — — — — (8,882 ) 1,780 (8,882 ) 1,780 1 1 (8,881 ) 1,781 Balance at March 31, 2022 26,542,890 $ 25 132,714 — $ 237,903 $ 213,701 $ (67,857 ) $ (57,195 ) $ 170,071 $ 156,506 $ 366 $ 366 $ 170,437 $ 156,872 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of Total Revenue | For the three months ended March 31, 2022 and 2021, the Company’s customers that accounted for 10% or more of the total revenue were as follows: Three Months ended Three Months ended (In thousands) Amount % of Total Amount % of Total New England Innovation Academy (“NEIA”) – Related Party * * $ 5,460 77.9 % Customer C $ 3,793 14.6 % * * Customer D $ 4,697 18.1 % * * * Customer revenue, as a percentage of total revenue was less than 10% |
Schedule of Total Accounts Receivable, Net | As of March 31, 2022 and December 31, 2021, the Company’s customers that accounted for 10% or more of the total accounts receivable, net, were as follows: As of As of (In thousands) Amount % of Total Amount % of Total NEIA – Related Party $ 1,344 15.7 % $ 3,498 48.4 % Customer B $ 1,541 18.0 % $ 1,541 21.3 % Customer E $ 1,217 14.2 % * * * Customer accounts receivable balance, as a percentage of total accounts receivable balance, was less than 10% |
Schedule of Property and Equipment | Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Useful Life Computer and office equipment 2 to 3 Furniture and fixtures 2 Software 3 Vehicles 5 Research and development laboratory equipment 5 Machinery and equipment 3 to 5 Leased equipment at customer 5 to 13 Trade show assets 3 to 5 Leasehold improvements Lower of estimated useful life or remaining lease term |
Schedule of Finite-Lived Useful Lives | The finite-lived useful lives are as follows: Trade names 5 to 7 years Acquired developed technology 5 to 8 years Non-compete agreements 5 years Customer relationships 5 to 8 years Capitalized website costs 3 to 5 years |
Revenue and Deferred Revenue (T
Revenue and Deferred Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue and Deferred Revenue [Abstract] | |
Schedule of Revenue Disaggregated by Timing of Revenue Recognition | The following table provides the Company’s revenue disaggregated by timing of revenue recognition: Three Months ended (In thousands) 2022 2021 Transferred at a point in time $ 12,774 $ 6,828 Transferred over time 13,247 180 Total revenue $ 26,021 $ 7,008 |
Schedule of Current Deferred Revenue | Changes in the Company’s current deferred revenue balance for the three months ended March 31, 2022 and the year ended December 31, 2021 were as follows: (In thousands) Three Months Year ended Deferred revenue – beginning of period $ 3,772 $ 152 Additions 5,089 3,758 Interest income on deferred revenue — 4 Recognized (4,679 ) (142 ) Deferred revenue – end of period $ 4,182 $ 3,772 |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities at Fair Value on a Recurring Basis | At March 31, 2022 and December 31, 2021, the Company’s assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2022 December 31, 2021 Fair Value Measurements Using Input Types Fair Value Measurements Using Input Types (In thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Mutual funds (included in cash and cash equivalents) $ 43,528 $ - $ - $ 43,528 $ 178 $ - $ - $ 178 Municipal bonds 19,306 - - 19,306 9,961 - - 9,961 Corporate bonds 18,905 - - 18,905 34,589 - - 34,589 Total assets $ 81,739 $ - $ - $ 81,739 $ 44,728 $ - $ - $ 44,728 Liabilities: Contingent consideration $ - $ - $ 7,557 $ 7,557 $ - $ - $ 6,137 $ 6,137 Warrant liabilities - - 29,711 29,711 - - - - Total liabilities $ - $ - $ 37,268 $ 37,268 $ - $ - $ 6,137 $ 6,137 |
Schedule of Marketable Securities | The composition of the Company’s marketable securities are as follows: (In thousands) March 31, December 31, Current marketable securities: Municipal bonds $ 19,306 $ 9,961 Corporate bonds 18,905 34,589 $ 38,211 $ 44,550 |
Schedule of Amortized Cost and Estimated Fair Value of Maturity Securities | The amortized cost and estimated fair value of marketable securities as of March 31, 2022, are as follows: (In thousands) Amortized Unrealized Estimated Current marketable securities: Municipal bonds $ 19,306 $ (26 ) $ 19,280 Corporate bonds 18,905 (140 ) 18,765 $ 38,211 $ (166 ) $ 38,045 |
Schedule of Changes in the Fair Value of the Level 3 Warrant Liabilities | During the three months ended March 31, 2022, the Company accrued $1.4 million relating to the Lab Society acquisition for contingent consideration recorded from the initial purchase price accounting. (In thousands) Three Months ended Year ended Contingent consideration – beginning of period $ 6,137 $ — Accrued contingent consideration 1,420 4,725 Change in estimated fair value — 1,412 Contingent consideration – end of period $ 7,557 $ 6,137 |
Schedule of Fair Value of the PIPE Warrants and the SPA Warrants | The grant date fair value of the PIPE Warrants and the SPA Warrants issued during the three months ended March 31, 2022 was calculated using a Black-Scholes model and was determined to be $40.5 million using the following inputs: PIPE SPA Warrants Warrants Stock price $ 1,100.00 $ 1,228.00 Exercise price $ 1,496.00 $ 1,350.00 Expected term (in years) 5.5 5.5 Annualized volatility 87.53 % 87.57 % Annual rate of quarterly dividends 0.0 % 0.0 % Discount rate -bond equivalent yield 1.65 % 2.12 % PIPE SPA Warrants Warrants Stock price $ 926.00 $ 926.00 Exercise price $ 1,496.00 $ 1,350.00 Expected term (in years) 5.3 5.4 Annualized volatility 87.68 % 87.79 % Annual rate of quarterly dividends 0.0 % 0.0 % Discount rate -bond equivalent yield 2.42 % 2.42 % |
Schedule of Changes in the Fair Value of the Level 3 Warrant Liabilities | (In thousands) Three Months Warrant liabilities – beginning of period $ — Initial fair value of warrant liabilities 40,496 Change in estimated fair value (10,785 ) Warrant liabilities – end of period $ 29,711 |
Loan Receivable (Tables)
Loan Receivable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Loan Receivable [Abstract] | |
Schedule of Breakdown of Loans Receivable by Company | The breakdown of loans receivable by Company as of March 31, 2022 and December 31, 2021 is as follows: (In thousands) March 31, December 31, Company A – Agrify TTK Solution $ 9,579 $ 5,542 Greenstone Holdings – TTK Solution – Related Party 12,446 11,177 Company C – Agrify TTK Solution 7,479 2,439 Company D – Agrify TTK Solution 3,338 1,105 Company E – Agrify TTK Solution 46 46 Company F – Non-TTK Solution (1) 1,538 1,946 Other – Non-TTK Solutions 312 — Total loan receivable $ 34,738 $ 22,255 (1) Current portion of loan receivable are included within Note 10 – Prepaid Expenses and Other Current Receivables, included elsewhere in the notes to the condensed consolidated financial statements. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounts Receivable [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Accounts receivable, gross $ 9,986 $ 8,637 Less allowance for doubtful accounts (1,415 ) (1,415 ) Accounts receivable, net $ 8,571 $ 7,222 |
Schedule of Allowance for Doubtful Accounts | The changes in the allowance for doubtful accounts consisted of the following: (In thousands) Three Months ended Year ended Allowance for doubtful accounts - beginning of period $ 1,415 $ 54 Provision for doubtful accounts — 1,187 Other adjustments — 174 Allowance for doubtful accounts - end of period $ 1,415 $ 1,415 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Raw materials $ 7,211 $ 6,393 Prepaid inventory 10,745 2,237 Finished goods 21,975 12,810 Inventory, gross 39,931 21,440 Inventory reserves (942 ) (942 ) Total inventory, net $ 38,989 $ 20,498 |
Schedule of Establishes Inventory Reserves for Obsolete, Slow Moving and Defective Items | Changes in the Company’s inventory reserve are as follows: (In thousands) Three Months ended Year ended Inventory reserves – beginning of period $ 942 $ — Increase in inventory reserves — 942 Inventory write-offs — — Inventory reserves – end of period $ 942 $ 942 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Prepaid Expenses and Other Receivables [Abstract] | |
Schedule of prepaid expenses and other receivables | March 31, December 31, (In thousands) 2022 2021 Prepaid insurance $ 2,353 $ 492 Prepaid software 151 173 Prepaid expenses, other 1,828 541 Deferred costs 492 353 Other note receivables (1) 1,240 807 Other receivables, other 384 86 Total prepaid expenses and other current assets $ 6,448 $ 2,452 (1) Other note receivables relate to the current portion of one of our TTK Solutions loan receivable balances. |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property and Equipment, Net [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Computer and office equipment $ 519 $ 473 Furniture and fixtures 458 385 Leasehold improvements 993 841 Machinery and equipment 990 898 Software 210 174 Vehicles 143 143 Research and development laboratory equipment 205 163 Leased equipment at customer 690 619 Trade show assets 80 80 Total property and equipment, gross 4,288 3,776 Accumulated depreciation (1,156 ) (780 ) Construction in progress 3,923 3,236 Total property and equipment, net $ 7,055 $ 6,232 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Intangible Assets and Goodwill [Abstract] | |
Schedule of Intangible Assets | Intangible assets, net as of March 31, 2022 was as follows: Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net (In thousands) January 1, Additions March 31, January 1, Expense March 31, January 1, March 31, Trade names $ 2,418 $ 317 $ 2,735 $ (227 ) $ (91 ) $ (318 ) $ 2,191 $ 2,417 Customer Relationships 6,176 713 6,889 (302 ) (247 ) (549 ) 5,874 6,340 Acquired developed Technology 4,911 1,432 6,343 (191 ) (255 ) (446 ) 4,720 5,897 Non-compete 1,202 — 1,202 (60 ) (60 ) (120 ) 1,142 1,082 Capitalized website costs 245 — 245 (100 ) (20 ) (120 ) 145 125 Total $ 14,952 $ 2,462 $ 17,414 $ (880 ) $ (673 ) $ (1,553 ) $ 14,072 $ 15,861 Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net (In thousands) January 1, Additions December 31, January 1, Expense December 31, January 1, December 31, Trade names $ 930 $ 1,488 $ 2,418 $ (88 ) $ (139 ) $ (227 ) $ 842 $ 2,191 Customer Relationships 850 5,326 6,176 (89 ) (213 ) (302 ) 761 5,874 Acquired developed Technology — 4,911 4,911 — (191 ) (191 ) — 4,720 Non-compete — 1,202 1,202 — (60 ) (60 ) — 1,142 Capitalized website costs 139 106 245 (48 ) (52 ) (100 ) 91 145 Total $ 1,919 $ 13,033 $ 14,952 $ (225 ) $ (655 ) $ (880 ) $ 1,694 $ 14,072 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for the remainder of 2022 and subsequent years for acquired intangible assets: Years ending December 31 (In thousands), Amount Remaining 2022 $ 2,103 2023 2,772 2024 2,763 2025 2,737 2026 2,486 2027 and thereafter 3,000 Total $ 15,861 |
Schedule of Goodwill Consist | Goodwill consisted of the following: (In thousands) Three Months ended Year ended Goodwill - beginning of period $ 50,090 $ 632 Goodwill acquired during period 4,368 49,458 Goodwill purchase accounting adjustment 86 — Goodwill - end of period $ 54,544 $ 50,090 |
Other Non-Current Assets (Table
Other Non-Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Non-Current Assets [Abstract] | |
Schedule of Other Non-Current Assets | Other non-current assets consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, (In thousands) 2022 2021 Long-term deferred commissions expense $ 3,008 $ 1,101 Security deposits 97 83 Total other non-current assets $ 3,105 $ 1,184 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Accrued acquisition liability (1) $ 11,179 $ 9,198 Sales tax payable (2) 5,520 5,290 Accrued construction costs 8,542 8,803 Compensation related fees 3,232 3,491 Accrued professional fees 466 1,104 Accrued warranty expenses 398 398 Accrued consulting fees — 75 Accrued inventory purchases 536 201 Financing lease liabilities 182 156 Accrued non-income taxes 57 48 Total accrued expenses and other current liabilities $ 30,112 $ 28,764 (1) Accrued acquisition liabilities includes both the contingent consideration and the value of held back Common Stock associated with the 2022 acquisition of Lab Society and the 2021 acquisitions of Precision, Cascade and PurePressure. (2) Sales tax payable primarily represents identified sales and use tax liabilities arising from our acquisition of Precision and Cascade. These amounts are included as part of our initial purchase price allocations and are the subject matter of an indemnification claim under the Precision and Cascade acquisition agreement. |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
PurePressure [Member] | |
Business Combination (Tables) [Line Items] | |
Schedule of Components and the Allocation of the Purchase Price | The following table sets forth the components and the allocation of the purchase price for the business combination: (In thousands) Purchase price consideration: Estimated closing proceeds $ 4,002 Transaction expenses 80 Closing buyer shares 1,904 Holdback buyer shares 816 Earn-out consideration 1,420 Estimated working capital adjustment (255 ) Fair value of total consideration transferred 7,967 Total purchase price, net of cash acquired $ 7,402 Fair value allocation of purchase price: Cash and cash equivalents $ 565 Accounts receivable 511 Inventory 2,130 Prepaid expenses and other current receivables 55 Right of use assets, net 304 Property and equipment, net 177 Prepaid and refundable taxes 194 Accounts payable, accrued expenses, and other current liabilities (1,224 ) Deferred revenue (963 ) Deferred tax liability (237 ) Finance lease liabilities, current (36 ) Finance lease liabilities, noncurrent (35 ) Operating lease liabilities, current (112 ) Operating lease liabilities, noncurrent (192 ) Acquired intangible assets 2,462 Goodwill 4,368 Total purchase price $ 7,967 The following table sets forth the components and the allocation of the purchase price for the business combination: (In thousands) Purchase price consideration: Cash paid to Sinclair Members at close $ 23,000 Cash contributed to escrow accounts at close 7,000 Cash paid for excess net working capital 1,430 Stock issued at close 14,535 Fair value of contingent consideration to be achieved 3,953 Fair value of total consideration transferred 49,918 Total purchase price, net of cash acquired $ 48,630 Fair value allocation of purchase price: Cash and cash equivalents $ 1,288 Accounts receivable 897 Inventory 6,761 Prepaid expenses and other current receivables 1,736 Property and equipment, net 970 Right of use assets, net 730 Capitalized web costs, net 2 Accounts payable and accrued expenses (9,223 ) Deferred revenue (5,419 ) Long-term debt (1,961 ) Operating lease liabilities, current (392 ) Operating lease liabilities, noncurrent (362 ) Acquired intangible assets 9,889 Goodwill 45,002 Total purchase price $ 49,918 (In thousands) Purchase price consideration: Estimated closing proceeds $ 3,613 Indebtedness paid 320 Transaction expenses 115 Closing buyer shares 2,211 Holdback buyer shares 654 Earn-out consideration 707 Estimated working capital adjustments 330 Fair value of total consideration transferred 7,950 Total purchase price, net of cash acquired $ 7,647 Fair value allocation of purchase price: Cash and cash equivalents $ 303 Accounts receivable, net 48 Inventory 1,537 Property and equipment, net 219 Right of use assets, net 191 Prepaid expenses and other current receivables 61 Other non-current assets 16 Accounts payable and accrued expenses (765 ) Deferred revenue (762 ) Operating lease liabilities, current (117 ) Operating lease liabilities, noncurrent (74 ) Finance lease liabilities, current (4 ) Finance lease liabilities, noncurrent (10 ) Notes payable, current (260 ) Notes payable, noncurrent (12 ) Acquired intangible assets 3,037 Goodwill 4,542 Total purchase price $ 7,950 |
Precision and Cascade [Member] | |
Business Combination (Tables) [Line Items] | |
Schedule of Intangible Assets Consist of Trade Names, Technology, Non-Compete Agreements, and Customer Relationships | Identified intangible assets consist of trade names, technology, and customer relationships. The fair value of intangible assets and the determination of their respective useful lives were made in accordance with ASC 805 and are outlined in the table below: (In thousands) Asset Useful Life Identified intangible assets: Trade names $ 317 5 years Acquired developed technology 1,432 8 years Customer relationships 713 6 years Total identified intangible assets $ 2,462 (In thousands) Asset Useful Life Identified intangible assets: Trade names $ 1,260 6 to 7 years Acquired developed technology 3,818 5 years Non-compete agreements 1,202 5 years Customer relationships 3,609 7 to 8 years Total identified intangible assets $ 9,889 (In thousands) Asset Useful Life Identified intangible assets: Trade name $ 227 5 years Acquired developed technology 1,093 8 years Customer relationships 1,717 5 years Total identified intangible assets $ 3,037 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt [Abstract] | |
Schedule of Debt | The Company’s debt consisted of: March 31, December 31, Note payable – SPA Note $ 65,000 $ — PPP Loan 794 804 Other notes payable (1) 1,487 297 Total debt 67,281 1,101 Less: unamortized debt discount (29,303 ) — Total debt, net of debt discount 37,978 1,101 Less: current portion, net of current unamortized debt discount (2,281 ) (1,089 ) Long-term debt $ 35,697 $ 12 (1) Other notes payable relates to one-year insurance premium that was financed over nine-months. |
Schedule of Breakdown of the Note Payable Balance | The following table provides a breakdown of the note payable balances as of March 31, 2022: (In thousands) Balance at Additions Payments Amortization Balance at Accrued interest expense $ — (98 ) — — $ (98 ) Principal $ — $ 65,000 $ — $ — $ 65,000 Notes payable, discount — (29,527 ) — 224 (29,303 ) Net carrying amount $ — $ 35,473 $ — $ 224 $ 35,697 |
Schedule of Short-Term and Long-Term Portion of Debt | The following table summarizes short-term and long-term portion of the SPA Note as of March 31, 2022: (In thousands) Short-Term Long-Term Notes Principal $ 5,200 $ 59,800 $ 65,000 Unamortized discount (5,200 ) (24,103 ) (29,303 ) Net carrying amount $ — $ 35,697 $ 35,697 |
Schedule of Future Minimum Payments | As of March 31, 2022, future minimum payments were as follows: Years ending December 31 (In thousands), Remaining 2022 $ — 2023 28,600 2024 31,200 2025 5,200 Total future payments $ 65,000 |
Capital Structure (Tables)
Capital Structure (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Capital Structure [Abstract] | |
Schedule of Valuation of Options Granted | The following table summarizes the Company’s assumptions used in the valuation of options granted during the year ended December 31, 2021: Volatility 40% Risk-free interest rate 1.10% – 1.63% Dividend yield 0.00% 0% Expected life (years) 10 Forfeiture rate 0.00% |
Schedule of Option Activity Under the Company's Stock Option Plans | The following table presents option activity under the Company’s stock option plans for the three months ended March 31, 2022 and 2021: (In thousands, except share and per share data) Number of Weighted-Average Aggregate Options outstanding at January 1, 2021 15,666 $ 702.00 $ — Granted 6,005 2,558.00 Exercised (871 ) 502.00 Forfeited (1,384 ) 734.00 Expired (21 ) 456.00 Options outstanding at March 31, 2021 19,395 $ 1,284.00 $ — Options outstanding at January 1, 2022 17,821 1,436.00 $ 62.64 Granted — — Exercised (21 ) 460.00 Forfeited (758 ) 1,370.00 Expired (267 ) 3,546.00 Options outstanding at March 31, 2022 16,775 $ 1,406.00 $ 12.23 Options vested and exercisable as of March 31, 2022 10,562 $ 1,108.00 Options vested and expected to vest as of March 31, 2022 15,967 $ 1,380.00 |
Schedule of Options Vested and Exercisable | The following table summarizes information about options vested and exercisable at March 31, 2022: Options Vested and Exercisable Price ($) Number of Weighted-Average Weighted-Average Exercise Price $ 456.00 4,210 8.14 $ 456.00 $ 972.00 4,174 8.57 $ 972.00 $ 1,536.00-$2,898.00 2,178 8.82 $ 2,624.00 |
Schedule of Options Expected to Vest | The following table summarizes information about options expected to vest after March 31, 2022: Options Vested and Expected to Vest Price ($) Number of Weighted-Average Weighted-Average Exercise Price $ 456.00 5,073 8.14 $ 456.00 $ 972.00 5,375 8.57 $ 972.00 $ 1,536.00-$2,898.00 5,519 8.82 $ 2,628.00 |
Schedule of Warrant Activity | As of March 31, 2022, warrants to purchase 50,780 shares of Common Stock were outstanding. The following table presents the Company’s warrant activity for the three months ended March 31, 2022 and 2021: Number Weighted-Average Exercise Price Warrants outstanding at December 31, 2020 4,140 $ 4.00 Granted 1,890 4.00 Exercised (4,672 ) 4.00 Warrants outstanding at March 31, 2021 1,358 $ 4.00 Warrants outstanding at December 31, 2021 1,358 $ 4.00 Granted 57,339 1,204.00 Exercised (7,917 ) 0.00 Warrants outstanding at March 31, 2022 50,780 $ 1,360.00 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Share | The components of basic and diluted net income (loss) per share were as follows: Three Months ended (In thousands, except share and per share data) 2022 2021 Numerator: Net income (loss) attributable to Agrify Corporation $ 1,780 $ (3,810 ) Accrued dividend attributable to Preferred A Stockholders — (61 ) Net income (loss) available for common shareholders $ 1,780 $ (3,871 ) Denominator: Weighted-average common shares outstanding – basic (1) 122,946 57,841 Effect of dilutive securities Options outstanding 4,807 — Warrants outstanding 1,292 — Weighted-average common shares outstanding – diluted (1) 129,045 57,841 Net income (loss) per share attributable to Common Stockholders – basic (1) $ 14.48 $ (65.87 ) Net income (loss) per share attributable to Common Stockholders – diluted (1) $ 13.79 $ (65.87 ) (1) Periods presented have been adjusted to reflect the 1-for-10 reverse stock split on October 18, 2022 and the 1-for-20 reverse stock split on July 5, 2023. Additional information regarding the reverse stock splits may be found in Note 1 – , included elsewhere in the notes to the condensed consolidated financial statements. |
Schedule of Anti-Dilutive Shares | As of March 31, 2021, the Company excluded the following securities from net loss per share as the effect of including them would have been anti-dilutive. The shares shown represent the number of shares of Common Stock which would be issued upon conversion in the period shown below March 31, Options outstanding 19,395 Warrants outstanding 4,830 24,225 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies [Abstract] | |
Schedule of Lease Activity | Additional information on the Company’s lease activity, for the three months ended March 31, 2022 and 2021, is as follows: Three Months ended (In thousands) 2022 2021 Operating lease cost $ 254 $ 14 Finance lease cost: Amortization of right-of-use assets 48 45 Interest on lease liabilities 9 12 Short-term lease cost — — Total lease cost $ 311 $ 71 March 31, March 31, Weighted-average remaining lease term – operating leases 2.27 years 1.81 years Weighted-average remaining lease term – finance leases 2.78 years 3.73 years Weighted-average discount rate – operating leases 6.63 % 8.13 % Weighted-average discount rate – finance leases 8.01 % 8.10 % (In thousands) March 31, December 31, Right-of-use assets, net $ 1,962 $ 1,859 Operating lease liabilities, current 911 814 Operating lease liabilities, non-current 689 704 Total operating lease liabilities $ 1,600 $ 1,518 Finance lease liabilities, current $ 182 $ 156 Finance lease liabilities, non-current 275 293 Total finance lease liabilities $ 457 $ 449 |
Schedule of Maturities of Operating and Finance Lease Liabilities | Maturities of operating and finance lease liabilities as of March 31, 2022 are as follows: Years ending December 31 (In thousands), Operating Finance Remaining 2022 $ 705 $ 163 2023 606 194 2024 250 92 2025 107 50 2026 63 16 Total minimum lease payments 1,731 515 Less imputed interest (131 ) (58 ) Total lease liabilities $ 1,600 $ 457 |
Related Parties (Tables)
Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Parties [Abstract] | |
Schedule of Net Purchasing (Sales) Activity | The following table describes the net purchasing (sales) activity with entities identified as related parties to the Company: Three Months ended (In thousands) 2022 2021 Bluezone $ 5 $ — 4D Bios (1) — 447 Cannae Policy Group 25 — Topline Performance Group 32 — NEIA (634 ) (5,460 ) Greenstone Holdings (637 ) — Valiant Americas, LLC 4,951 1,077 Living Greens Farm — (58 ) (1) Purchases from 4D Bios for the three months ended March 31, 2021 include $384 thousand for a down payment on inventory orders. |
Schedule of Net Related Party (Payable) Receivable | The following table summarizes net related party (payable) receivable as of March 31, 2022 and December 31, 2021: (In thousands) March 31, December 31, Cannae Policy Group $ — $ (8 ) Cannaquip (21 ) (21 ) Greenstone Holdings 12,446 11,177 Living Greens Farm 34 34 NEIA 1,344 3,500 Valiant Americas, LLC — (922 ) |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Details) - USD ($) | 3 Months Ended | ||||
Feb. 19, 2021 | Feb. 01, 2021 | Jan. 12, 2021 | Mar. 31, 2022 | Mar. 22, 2021 | |
Nature of Business and Basis of Presentation (Details) [Line Items] | |||||
Ownership interests, description | The Company also has ownership interests in the following companies: ● Teejan Podoponics International LLC (“TPI”) (the Company has owned 50% of TPI since December 2018); ● Agrify-Valiant, LLC (“Agrify-Valiant”) (the Company owns 60% of Agrify-Valiant, which was formed in December 2019); and ● Agrify Brands, LLC (“Agrify Brands”) (formerly TriGrow Brands, LLC) (the Company owns 75% of Agrify Brands, which ownership position was created as part of the January 2020 acquisition of TriGrow). | ||||
Reverse stock split, description | the Company effected a 1-for-1.581804 reverse stock split (“Reverse Stock Split”) of its Common Stock, $0.001 par value per share (“Common Stock”). | ||||
Total gross proceeds | $ 62,100,000 | ||||
Underwriting discounts and commissions | 4,000,000 | ||||
Offering expenses | 1,000,000 | ||||
Net proceeds | $ 57,000,000 | ||||
Common stock price per share (in Dollars per share) | $ 2,700 | ||||
Offering to shares (in Shares) | 31,944 | ||||
Total net proceeds | $ 80,000,000 | ||||
Received total proceeds from the unsecured PPP Loans | $ 779,000 | ||||
IPO [Member] | |||||
Nature of Business and Basis of Presentation (Details) [Line Items] | |||||
Shares of common stock (in Shares) | 27,778 | 31,050 | |||
Offering price per share (in Dollars per share) | $ 2,000 | ||||
Over-Allotment Option [Member] | |||||
Nature of Business and Basis of Presentation (Details) [Line Items] | |||||
Shares of common stock (in Shares) | 4,050 | ||||
Sale of common stock shares | $ 4,167 | ||||
Private Placement [Member] | |||||
Nature of Business and Basis of Presentation (Details) [Line Items] | |||||
Purchase price common stock description | On February 19, 2021, the Company consummated a secondary public offering (the “February Offering”) of 27,778 shares of its Common Stock for a price of $2,700.00 per share, less certain underwriting discounts and commissions. |
Restatement of Current Period_2
Restatement of Current Period (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Restatement of Current Period (Details) [Line Items] | |
Accumulated deficit | $ 10,700 |
Fair value of warrant liabilities | 10,800 |
Prepaid expenses and other current | 800 |
Other non current assets | 800 |
SPA Warrant And PIPE Warrant [Member] | |
Restatement of Current Period (Details) [Line Items] | |
Additional paid-in capital | 24,200 |
Warrant liabilities | 29,700 |
SPA Warrant [Member] | |
Restatement of Current Period (Details) [Line Items] | |
Long-term debt | 15,500 |
Long term debt current | 700 |
Interest income | $ 123 |
Restatement of Current Period_3
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Balance Sheet $ in Thousands | Mar. 31, 2022 USD ($) |
Previously Reported [Member] | |
Current assets | |
Cash and cash equivalents | $ 25,205 |
Restricted cash | 30,000 |
Marketable securities | 38,211 |
Accounts receivable, net of allowance for doubtful accounts of $1,415 | 8,571 |
Inventory, net of reserves of $942 | 38,989 |
Prepaid and refundable taxes | 194 |
Prepaid expenses and other current assets | 6,373 |
Total current assets | 147,543 |
Non-Current Assets | |
Loan receivable | 34,738 |
Property and equipment, net | 7,055 |
Right-of-use assets, net | 1,554 |
Goodwill | 54,544 |
Intangible assets, net | 15,861 |
Other non-current assets | 3,180 |
Total Assets | 264,475 |
Current liabilities | |
Accounts payable | 3,683 |
Accrued expenses and other current liabilities | 30,112 |
Operating lease liabilities, current | 911 |
Long-term debt, current | 2,970 |
Deferred revenue | 4,182 |
Total current liabilities | 41,858 |
Non-current liabilities | |
Warrant liabilities | |
Other non-current liabilities | 275 |
Operating lease liabilities, non-current | 689 |
Deferred tax liabilities, net | 62 |
Long-term debt | 51,154 |
Total liabilities | 94,038 |
Stockholders’ equity | |
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 shares issued and outstanding | 25 |
Preferred stock, value | |
Additional paid-in capital | 237,903 |
Accumulated deficit | (67,857) |
Total stockholders’ equity attributable to Agrify | 170,071 |
Non-controlling interests | 366 |
Total liabilities and stockholders’ equity | 264,475 |
Previously Reported [Member] | Preferred A Stock | |
Stockholders’ equity | |
Preferred stock, value | |
Revision of Prior Period, Adjustment [Member] | |
Current assets | |
Cash and cash equivalents | |
Revision of Prior Period, Adjustment [Member] | Warrant [Member] | |
Current assets | |
Cash and cash equivalents | |
Restricted cash | |
Marketable securities | |
Accounts receivable, net of allowance for doubtful accounts of $1,415 | |
Inventory, net of reserves of $942 | |
Prepaid and refundable taxes | |
Prepaid expenses and other current assets | |
Non-Current Assets | |
Loan receivable | |
Property and equipment, net | |
Right-of-use assets, net | |
Goodwill | |
Intangible assets, net | |
Other non-current assets | |
Current liabilities | |
Accounts payable | |
Accrued expenses and other current liabilities | |
Operating lease liabilities, current | |
Long-term debt, current | (689) |
Deferred revenue | |
Non-current liabilities | |
Warrant liabilities | 29,711 |
Other non-current liabilities | |
Operating lease liabilities, non-current | |
Deferred tax liabilities, net | |
Long-term debt | (15,457) |
Stockholders’ equity | |
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 shares issued and outstanding | |
Preferred stock, value | |
Additional paid-in capital | (24,227) |
Accumulated deficit | 10,662 |
Non-controlling interests | |
Revision of Prior Period, Adjustment [Member] | Reverse Stock Split [Member] | |
Current assets | |
Cash and cash equivalents | |
Restricted cash | |
Marketable securities | |
Accounts receivable, net of allowance for doubtful accounts of $1,415 | |
Inventory, net of reserves of $942 | |
Prepaid and refundable taxes | |
Prepaid expenses and other current assets | |
Non-Current Assets | |
Loan receivable | |
Property and equipment, net | |
Right-of-use assets, net | |
Goodwill | |
Intangible assets, net | |
Other non-current assets | |
Current liabilities | |
Accounts payable | |
Accrued expenses and other current liabilities | |
Operating lease liabilities, current | |
Long-term debt, current | |
Deferred revenue | |
Non-current liabilities | |
Warrant liabilities | |
Other non-current liabilities | |
Operating lease liabilities, non-current | |
Deferred tax liabilities, net | |
Long-term debt | |
Stockholders’ equity | |
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 shares issued and outstanding | (25) |
Preferred stock, value | |
Additional paid-in capital | 25 |
Accumulated deficit | |
Non-controlling interests | |
Revision of Prior Period, Adjustment [Member] | Debt Issuance Costs [Member] | |
Current assets | |
Cash and cash equivalents | |
Restricted cash | |
Marketable securities | |
Accounts receivable, net of allowance for doubtful accounts of $1,415 | |
Inventory, net of reserves of $942 | |
Prepaid and refundable taxes | |
Prepaid expenses and other current assets | 75 |
Non-Current Assets | |
Loan receivable | |
Property and equipment, net | |
Right-of-use assets, net | |
Goodwill | |
Intangible assets, net | |
Other non-current assets | (75) |
Current liabilities | |
Accounts payable | |
Accrued expenses and other current liabilities | |
Operating lease liabilities, current | |
Long-term debt, current | |
Deferred revenue | |
Non-current liabilities | |
Warrant liabilities | |
Other non-current liabilities | |
Operating lease liabilities, non-current | |
Deferred tax liabilities, net | |
Long-term debt | |
Stockholders’ equity | |
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 shares issued and outstanding | |
Preferred stock, value | |
Additional paid-in capital | |
Accumulated deficit | |
Non-controlling interests | |
Total liabilities and stockholders’ equity | |
Revision of Prior Period, Adjustment [Member] | Preferred A Stock | Warrant [Member] | |
Stockholders’ equity | |
Preferred stock, value | |
Revision of Prior Period, Adjustment [Member] | Preferred A Stock | Reverse Stock Split [Member] | |
Stockholders’ equity | |
Preferred stock, value | |
Revision of Prior Period, Adjustment [Member] | Preferred A Stock | Debt Issuance Costs [Member] | |
Stockholders’ equity | |
Preferred stock, value | |
Restated [Member] | |
Current assets | |
Cash and cash equivalents | 25,205 |
Restricted cash | 30,000 |
Marketable securities | 38,211 |
Accounts receivable, net of allowance for doubtful accounts of $1,415 | 8,571 |
Inventory, net of reserves of $942 | 38,989 |
Prepaid and refundable taxes | 194 |
Prepaid expenses and other current assets | 6,448 |
Total current assets | 147,618 |
Non-Current Assets | |
Loan receivable | 34,738 |
Property and equipment, net | 7,055 |
Right-of-use assets, net | 1,554 |
Goodwill | 54,544 |
Intangible assets, net | 15,861 |
Other non-current assets | 3,105 |
Total Assets | 264,475 |
Current liabilities | |
Accounts payable | 3,683 |
Accrued expenses and other current liabilities | 30,112 |
Operating lease liabilities, current | 911 |
Long-term debt, current | 2,281 |
Deferred revenue | 4,182 |
Total current liabilities | 41,169 |
Non-current liabilities | |
Warrant liabilities | 29,711 |
Other non-current liabilities | 275 |
Operating lease liabilities, non-current | 689 |
Deferred tax liabilities, net | 62 |
Long-term debt | 35,697 |
Total liabilities | 107,603 |
Stockholders’ equity | |
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 shares issued and outstanding | 0 |
Preferred stock, value | |
Additional paid-in capital | 213,701 |
Accumulated deficit | (57,195) |
Total stockholders’ equity attributable to Agrify | 156,506 |
Non-controlling interests | 366 |
Total liabilities and stockholders’ equity | 264,475 |
Restated [Member] | Preferred A Stock | |
Stockholders’ equity | |
Preferred stock, value |
Restatement of Current Period_4
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Balance Sheet (Parentheticals) $ / shares in Units, $ in Thousands | Mar. 31, 2022 USD ($) $ / shares shares |
Previously Reported [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Allowance for doubtful accounts (in Dollars) | $ | $ 1,415 |
Inventory, net of reserves (in Dollars) | $ | $ 942 |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 250,000 |
Common stock, shares issued | 132,714 |
Common stock, shares outstanding | 132,714 |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 2,895,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Previously Reported [Member] | Preferred A Stock | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 105,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Revision of Prior Period, Adjustment [Member] | Warrant [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Allowance for doubtful accounts (in Dollars) | $ | $ 1,415 |
Inventory, net of reserves (in Dollars) | $ | $ 942 |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 250,000 |
Common stock, shares issued | 132,714 |
Common stock, shares outstanding | 132,714 |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 2,895,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Revision of Prior Period, Adjustment [Member] | Reverse Stock Split [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Allowance for doubtful accounts (in Dollars) | $ | $ 1,415 |
Inventory, net of reserves (in Dollars) | $ | $ 942 |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 250,000 |
Common stock, shares issued | 132,714 |
Common stock, shares outstanding | 132,714 |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 2,895,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Revision of Prior Period, Adjustment [Member] | Debt Issuance Costs [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Allowance for doubtful accounts (in Dollars) | $ | $ 1,415 |
Inventory, net of reserves (in Dollars) | $ | $ 942 |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 250,000 |
Common stock, shares issued | 132,714 |
Common stock, shares outstanding | 132,714 |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 2,895,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Revision of Prior Period, Adjustment [Member] | Preferred A Stock | Warrant [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 105,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Revision of Prior Period, Adjustment [Member] | Preferred A Stock | Reverse Stock Split [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 105,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Revision of Prior Period, Adjustment [Member] | Preferred A Stock | Debt Issuance Costs [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 105,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Restated [Member] | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Allowance for doubtful accounts (in Dollars) | $ | $ 1,415 |
Inventory, net of reserves (in Dollars) | $ | $ 942 |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 250,000 |
Common stock, shares issued | 132,714 |
Common stock, shares outstanding | 132,714 |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 2,895,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Restated [Member] | Preferred A Stock | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Preferred stock par value (in Dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares authorized | 105,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Restatement of Current Period_5
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Operations $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) $ / shares shares | |
Previously Reported [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Revenue (including $1,271 from related parties) | $ 26,021 |
Cost of goods sold | 21,851 |
Gross profit | 4,170 |
General and administrative | 9,759 |
Research and development | 2,084 |
Selling and marketing | 2,090 |
Total operating expenses | 13,933 |
Loss from operations | (9,763) |
Interest income, net | 682 |
Change in fair value of warrant liabilities | |
Gain on extinguishment of notes payable | |
Other income, net | 682 |
Net (loss) income before income taxes | (9,081) |
Income tax benefit | (200) |
Net (loss) income | (8,881) |
Income attributable to non-controlling interest | 1 |
Net (loss) income attributable to Agrify Corporation | $ (8,882) |
Net (loss) income per share attributable to Common Stockholders – basic (in Dollars per share) | $ / shares | $ (0.36) |
Net (loss) income per share attributable to Common Stockholders -- diluted (in Dollars per share) | $ / shares | $ (0.36) |
Weighted-average common shares outstanding – basic (in Shares) | shares | 24,589,113 |
Weighted-average common shares outstanding – diluted (in Shares) | shares | 24,589,113 |
Adjustment [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Change in fair value of warrant liabilities | $ 10,785 |
Gain on extinguishment of notes payable | |
Income attributable to non-controlling interest | |
Net (loss) income attributable to Agrify Corporation | 10,662 |
Adjustment [Member] | Warrant [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Revenue (including $1,271 from related parties) | |
Cost of goods sold | |
General and administrative | |
Selling and marketing | |
Interest income, net | (123) |
Change in fair value of warrant liabilities | 10,785 |
Gain on extinguishment of notes payable | |
Other income, net | 10,662 |
Net (loss) income before income taxes | 10,662 |
Income tax benefit | |
Net (loss) income | 10,662 |
Income attributable to non-controlling interest | |
Net (loss) income attributable to Agrify Corporation | $ 10,662 |
Net (loss) income per share attributable to Common Stockholders – basic (in Dollars per share) | $ / shares | $ 0.43 |
Net (loss) income per share attributable to Common Stockholders -- diluted (in Dollars per share) | $ / shares | $ 0.43 |
Adjustment [Member] | Reverse Stock Split [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Revenue (including $1,271 from related parties) | |
Cost of goods sold | |
General and administrative | |
Selling and marketing | |
Interest income, net | |
Change in fair value of warrant liabilities | |
Gain on extinguishment of notes payable | |
Other income, net | |
Net (loss) income before income taxes | |
Income tax benefit | |
Net (loss) income | |
Income attributable to non-controlling interest | |
Net (loss) income per share attributable to Common Stockholders – basic (in Dollars per share) | $ / shares | $ 14.41 |
Net (loss) income per share attributable to Common Stockholders -- diluted (in Dollars per share) | $ / shares | $ 13.72 |
Weighted-average common shares outstanding – basic (in Shares) | shares | (24,466,167) |
Weighted-average common shares outstanding – diluted (in Shares) | shares | (24,460,068) |
Restated [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Revenue (including $1,271 from related parties) | $ 26,021 |
Cost of goods sold | 21,851 |
Gross profit | 4,170 |
General and administrative | 9,759 |
Research and development | 2,084 |
Selling and marketing | 2,090 |
Total operating expenses | 13,933 |
Loss from operations | (9,763) |
Interest income, net | 559 |
Change in fair value of warrant liabilities | 10,785 |
Gain on extinguishment of notes payable | |
Other income, net | 11,344 |
Net (loss) income before income taxes | 1,581 |
Income tax benefit | (200) |
Net (loss) income | 1,781 |
Income attributable to non-controlling interest | 1 |
Net (loss) income attributable to Agrify Corporation | $ 1,780 |
Net (loss) income per share attributable to Common Stockholders – basic (in Dollars per share) | $ / shares | $ 14.48 |
Net (loss) income per share attributable to Common Stockholders -- diluted (in Dollars per share) | $ / shares | $ 13.79 |
Weighted-average common shares outstanding – basic (in Shares) | shares | 122,946 |
Weighted-average common shares outstanding – diluted (in Shares) | shares | 129,045 |
Restatement of Current Period_6
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Operations (Parentheticals) - Related Parties [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Previously Reported [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Revenue from related parties | $ 1,271 |
Adjustment [Member] | Warrant [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Revenue from related parties | 1,271 |
Adjustment [Member] | Reverse Stock Split [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Revenue from related parties | 1,271 |
Restated [Member] | |
Condensed Income Statements, Captions [Line Items] | |
Revenue from related parties | $ 1,271 |
Restatement of Current Period_7
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Cash Flows $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Previously Reported [Member] | |
Condensed Cash Flow Statements, Captions [Line Items] | |
Net income (loss) attributable to Agrify Corporation | $ (8,882) |
Depreciation and amortization | 1,052 |
Amortization of premium on investment securities | 224 |
Amortization of debt discount | 20 |
Amortization of issuance costs | |
Interest on investment securities | (248) |
Debt issuance costs | 2,700 |
Deferred income taxes | (200) |
Compensation in connection with the issuance of stock options | 953 |
Non-cash interest (income) | (406) |
Change in fair value of warrant liabilities | |
Gain on extinguishment of notes payable, net | |
Early termination of lease | 26 |
Income attributable to non-controlling interests | 1 |
Accounts receivable | (838) |
Inventory | (16,361) |
Prepaid expenses and other current assets | (3,033) |
Right of use assets, net | (20) |
Other non-current assets | (1,867) |
Accounts payable | (2,765) |
Accrued expenses and other current liabilities | (2,120) |
Deferred (expense), net | (2,407) |
Net cash used in operating activities | (34,171) |
Purchases of property and equipment | (3,728) |
Purchase of securities | (76,097) |
Proceeds from the sale of securities | 82,460 |
Issuance of loan receivable | (12,487) |
Cash paid for business combinations, net of cash acquired | (3,513) |
Net cash used in investing activities | (13,365) |
Proceeds from issuance of debt and warrants in private placement, net | 65,000 |
Proceeds from issuance of Common Stock and warrants in private placement, net of fees | 25,797 |
Proceeds from IPO, net of fees | |
Proceeds from Secondary public offering, net of fees | |
Proceeds from exercise of options | 10 |
Proceeds from exercise of warrants | 1 |
Payments on other financing loans | |
Payments on insurance financing loan | |
Payments of financing leases | (81) |
Net cash provided by financing activities | 90,727 |
Net increase in cash, cash equivalents, and restricted cash | 43,191 |
Cash, cash equivalents, and restricted cash at the beginning of period | 12,014 |
Cash, cash equivalents, and restricted cash at the end of period | 55,205 |
Cash, cash equivalents, and restricted cash at end of period | |
Cash and cash equivalents | 25,205 |
Restricted cash | 30,000 |
Total cash, cash equivalents, and restricted cash at the end of period | 55,205 |
Supplemental disclosures of non-cash flow information | |
Initial fair value of warrants | |
Financing of prepaid insurance | |
Adjustment Warrants [Member] | |
Condensed Cash Flow Statements, Captions [Line Items] | |
Net income (loss) attributable to Agrify Corporation | 10,662 |
Depreciation and amortization | |
Amortization of premium on investment securities | |
Amortization of debt discount | 203 |
Amortization of issuance costs | 143 |
Interest on investment securities | |
Debt issuance costs | (2,700) |
Deferred income taxes | |
Compensation in connection with the issuance of stock options | |
Non-cash interest (income) | |
Change in fair value of warrant liabilities | (10,785) |
Gain on extinguishment of notes payable, net | |
Early termination of lease | |
Income attributable to non-controlling interests | |
Changes in operating assets and liabilities, net of acquisitions: | |
Accounts receivable | |
Inventory | |
Prepaid expenses and other current assets | 2,143 |
Right of use assets, net | |
Other non-current assets | 1,867 |
Accounts payable | (73) |
Accrued expenses and other current liabilities | |
Deferred (expense), net | 1,836 |
Net cash used in operating activities | 3,296 |
Purchases of property and equipment | |
Purchase of securities | |
Proceeds from the sale of securities | |
Issuance of loan receivable | |
Cash paid for business combinations, net of cash acquired | |
Proceeds from issuance of debt and warrants in private placement, net | (2,595) |
Proceeds from IPO, net of fees | |
Proceeds from Secondary public offering, net of fees | |
Proceeds from exercise of options | |
Proceeds from exercise of warrants | |
Payments on other financing loans | (273) |
Payments on insurance financing loan | (428) |
Payments of financing leases | |
Net cash provided by financing activities | (3,296) |
Net increase in cash, cash equivalents, and restricted cash | |
Cash, cash equivalents, and restricted cash at the beginning of period | |
Cash, cash equivalents, and restricted cash at the end of period | |
Cash, cash equivalents, and restricted cash at end of period | |
Cash and cash equivalents | |
Restricted cash | |
Total cash, cash equivalents, and restricted cash at the end of period | |
Supplemental disclosures of non-cash flow information | |
Initial fair value of warrants | 40,496 |
Financing of prepaid insurance | 1,928 |
Restated [Member] | |
Condensed Cash Flow Statements, Captions [Line Items] | |
Net income (loss) attributable to Agrify Corporation | 1,780 |
Depreciation and amortization | 1,052 |
Amortization of premium on investment securities | 224 |
Amortization of debt discount | 223 |
Amortization of issuance costs | 143 |
Interest on investment securities | (248) |
Debt issuance costs | |
Deferred income taxes | (200) |
Compensation in connection with the issuance of stock options | 953 |
Non-cash interest (income) | (406) |
Change in fair value of warrant liabilities | (10,785) |
Gain on extinguishment of notes payable, net | |
Early termination of lease | 26 |
Income attributable to non-controlling interests | 1 |
Accounts receivable | (838) |
Inventory | (16,361) |
Prepaid expenses and other current assets | (890) |
Right of use assets, net | (20) |
Other non-current assets | |
Accounts payable | (2,838) |
Accrued expenses and other current liabilities | (2,120) |
Deferred (expense), net | (571) |
Net cash used in operating activities | (30,875) |
Purchases of property and equipment | (3,728) |
Purchase of securities | (76,097) |
Proceeds from the sale of securities | 82,460 |
Issuance of loan receivable | (12,487) |
Cash paid for business combinations, net of cash acquired | (3,513) |
Net cash used in investing activities | (13,365) |
Proceeds from issuance of debt and warrants in private placement, net | 62,405 |
Proceeds from issuance of Common Stock and warrants in private placement, net of fees | 25,797 |
Proceeds from IPO, net of fees | |
Proceeds from Secondary public offering, net of fees | |
Proceeds from exercise of options | 10 |
Proceeds from exercise of warrants | 1 |
Payments on other financing loans | (273) |
Payments on insurance financing loan | (428) |
Payments of financing leases | (81) |
Net cash provided by financing activities | 87,431 |
Net increase in cash, cash equivalents, and restricted cash | 43,191 |
Cash, cash equivalents, and restricted cash at the beginning of period | 12,014 |
Cash, cash equivalents, and restricted cash at the end of period | 55,205 |
Cash, cash equivalents, and restricted cash at end of period | |
Cash and cash equivalents | 25,205 |
Restricted cash | 30,000 |
Total cash, cash equivalents, and restricted cash at the end of period | 55,205 |
Supplemental disclosures of non-cash flow information | |
Initial fair value of warrants | 40,496 |
Financing of prepaid insurance | $ 1,928 |
Restatement of Current Period_8
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) shares | |
Previously Reported [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | $ 137,424 |
Stock-based compensation | 953 |
Issuance of Common Stock and warrants in private placement | 25,797 |
Issuance of debt and warrants in private placement | 13,230 |
Acquisition of Lab Society | 1,903 |
Exercise of options | 10 |
Exercise of warrants | 1 |
Net income | (8,881) |
Ending Balance | 170,437 |
Previously Reported [Member] | Common Stock [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | $ 21 |
Beginning Balance (in Shares) | shares | 22,207,103 |
Stock-based compensation | |
Issuance of Common Stock and warrants in private placement | $ 2 |
Issuance of Common Stock and warrants in private placement (in Shares) | shares | 2,450,350 |
Issuance of debt and warrants in private placement | |
Acquisition of Lab Society | |
Acquisition of Lab Society (in Shares) | shares | 297,929 |
Exercise of options | |
Exercise of options (in Shares) | shares | 4,220 |
Exercise of warrants | $ 2 |
Exercise of warrants (in Shares) | shares | 1,583,288 |
Net income | |
Ending Balance | $ 25 |
Ending Balance (in Shares) | shares | 26,542,890 |
Previously Reported [Member] | Additional Paid-in Capital [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | $ 196,013 |
Stock-based compensation | 953 |
Issuance of Common Stock and warrants in private placement | 25,795 |
Issuance of debt and warrants in private placement | 13,230 |
Acquisition of Lab Society | 1,903 |
Exercise of options | 10 |
Exercise of warrants | (1) |
Net income | |
Ending Balance | 237,903 |
Previously Reported [Member] | Accumulated Deficit [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | (58,975) |
Stock-based compensation | |
Issuance of Common Stock and warrants in private placement | |
Issuance of debt and warrants in private placement | |
Acquisition of Lab Society | |
Exercise of options | |
Exercise of warrants | |
Net income | (8,882) |
Ending Balance | (67,857) |
Previously Reported [Member] | Total Stockholders’ Equity attributable to Agrify [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | 137,059 |
Stock-based compensation | 953 |
Issuance of Common Stock and warrants in private placement | 25,797 |
Issuance of debt and warrants in private placement | 13,230 |
Acquisition of Lab Society | 1,903 |
Exercise of options | 10 |
Exercise of warrants | 1 |
Net income | (8,882) |
Ending Balance | 170,071 |
Previously Reported [Member] | Noncontrolling Interest [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | 365 |
Stock-based compensation | |
Issuance of Common Stock and warrants in private placement | |
Issuance of debt and warrants in private placement | |
Acquisition of Lab Society | |
Exercise of options | |
Exercise of warrants | |
Net income | 1 |
Ending Balance | 366 |
Restated [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | 137,424 |
Stock-based compensation | 953 |
Issuance of Common Stock and warrants in private placement | 14,800 |
Issuance of debt and warrants in private placement | |
Acquisition of Lab Society | 1,903 |
Exercise of options | 10 |
Exercise of warrants | 1 |
Net income | 1,781 |
Ending Balance | 156,872 |
Restated [Member] | Common Stock [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | |
Beginning Balance (in Shares) | shares | 111,035 |
Stock-based compensation | |
Issuance of Common Stock and warrants in private placement | |
Issuance of Common Stock and warrants in private placement (in Shares) | shares | 12,252 |
Acquisition of Lab Society | |
Acquisition of Lab Society (in Shares) | shares | 1,490 |
Exercise of options | |
Exercise of options (in Shares) | shares | 21 |
Exercise of warrants | |
Exercise of warrants (in Shares) | shares | 7,916 |
Net income | |
Ending Balance | |
Ending Balance (in Shares) | shares | 132,714 |
Restated [Member] | Additional Paid-in Capital [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | $ 196,034 |
Stock-based compensation | 953 |
Issuance of Common Stock and warrants in private placement | 14,800 |
Issuance of debt and warrants in private placement | |
Acquisition of Lab Society | 1,903 |
Exercise of options | 10 |
Exercise of warrants | 1 |
Net income | |
Ending Balance | 213,701 |
Restated [Member] | Accumulated Deficit [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | (58,975) |
Stock-based compensation | |
Issuance of Common Stock and warrants in private placement | |
Issuance of debt and warrants in private placement | |
Acquisition of Lab Society | |
Exercise of options | |
Exercise of warrants | |
Net income | 1,780 |
Ending Balance | (57,195) |
Restated [Member] | Total Stockholders’ Equity attributable to Agrify [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | 137,059 |
Stock-based compensation | 953 |
Issuance of Common Stock and warrants in private placement | 14,800 |
Issuance of debt and warrants in private placement | |
Acquisition of Lab Society | 1,903 |
Exercise of options | 10 |
Exercise of warrants | 1 |
Net income | 1,780 |
Ending Balance | 156,506 |
Restated [Member] | Noncontrolling Interest [Member] | |
Restatement of Current Period (Details) - Schedule of the Impact of the Restatement and Reclassifications on the Company’s Condensed Consolidated Statement of Stockholders’ Equity [Line Items] | |
Beginning Balance | 365 |
Stock-based compensation | |
Issuance of Common Stock and warrants in private placement | |
Issuance of debt and warrants in private placement | |
Acquisition of Lab Society | |
Exercise of options | |
Exercise of warrants | |
Net income | 1 |
Ending Balance | $ 366 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Percentage of investment | 50% | |
Transition period description | In addition, the JOBS Act provides that an “emerging growth company” can use the extended transition period for complying with new or revised accounting standards.The Company will remain an “emerging growth company” until the earliest to occur of: ● reporting $1.0 billion or more in annual gross revenues; ● the issuance, in a three-year period, of more than $1.0 billion in non-convertible debt; ● the end of the fiscal year in which the market value of Common Stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; or ● December 31, 2026. | |
FDIC insured amount (in Dollars) | $ 250,000 | |
Percentage of total revenue | 10% | |
Accounts receivable percentage | 10% | |
Percentage of holders | 50% | |
Investment amount (in Dollars) | $ 0 | |
Revenue Benchmark [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Concentration risk percentage | 10% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Concentration risk percentage | 10% | |
Accounts Receivable [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Concentration risk percentage | 10% | 10% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Concentration risk percentage | 10% | |
Agrify Valiant LLC’s [Member] | Nonconsolidated Investees, Other [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Ownership percentage | 60% | |
Agrify Brands, LLC’s [Member] | Nonconsolidated Investees, Other [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Ownership percentage | 75% | |
Teejan Podponics International LLC [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Percentage of investment | 50% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Total Revenue - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | |||
New England Innovation Academy (“NEIA”) – Related Party [Member] | ||||
Schedule of Total Revenue [Abstract] | ||||
Total revenue amount | [1] | $ 5,460 | ||
Percentage of total revenue | [1] | 77.90% | ||
Customer C [Member] | ||||
Schedule of Total Revenue [Abstract] | ||||
Total revenue amount | [1] | $ 3,793 | ||
Percentage of total revenue | [1] | 14.60% | ||
Customer D [Member] | ||||
Schedule of Total Revenue [Abstract] | ||||
Total revenue amount | [1] | $ 4,697 | ||
Percentage of total revenue | [1] | 18.10% | ||
[1] Customer revenue, as a percentage of total revenue was less than 10% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Total Accounts Receivable, Net - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | ||
NEIA – Related Party [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of Total Accounts Receivable, Net [Line Items] | |||
Total Accounts Receivable | $ 1,344 | $ 3,498 | |
Percentage of Total Accounts Receivable | 15.70% | 48.40% | |
Customer B [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of Total Accounts Receivable, Net [Line Items] | |||
Total Accounts Receivable | $ 1,541 | $ 1,541 | |
Percentage of Total Accounts Receivable | 18% | 21.30% | |
Customer E [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of Total Accounts Receivable, Net [Line Items] | |||
Total Accounts Receivable | $ 1,217 | [1] | |
Percentage of Total Accounts Receivable | 14.20% | [1] | |
[1] Customer accounts receivable balance, as a percentage of total accounts receivable balance, was less than 10% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment | Mar. 31, 2022 |
Public Utility, Property, Plant and Equipment [Line Items] | |
Leasehold improvements | Lower of estimated useful life or remaining lease term |
Computer and office equipment Member[] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 2 years |
Computer and office equipment Member[] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 3 years |
Furniture and fixtures [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 2 years |
Software [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 3 years |
Vehicles [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 5 years |
Research and development laboratory equipment [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 5 years |
Machinery and equipment [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 3 years |
Machinery and equipment [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 5 years |
Leased equipment at customer [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 5 years |
Leased equipment at customer [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 13 years |
Trade show assets [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 3 years |
Trade show assets [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated Useful Life | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of Finite-Lived Useful Lives | Mar. 31, 2022 |
Trade names [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 5 years |
Trade names [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 7 years |
Acquired developed technology [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 5 years |
Acquired developed technology [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 8 years |
Non-compete agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 5 years |
Customer relationships [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 5 years |
Customer relationships [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 8 years |
Capitalized website costs [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 3 years |
Capitalized website costs [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived useful lives | 5 years |
Revenue and Deferred Revenue (D
Revenue and Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Revenue and Deferred Revenue [Abstract] | ||
Warranty returns | $ 398 | $ 398 |
Revenue and Deferred Revenue _2
Revenue and Deferred Revenue (Details) - Schedule of Revenue Disaggregated by Timing of Revenue Recognition - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 26,021 | $ 7,008 |
Transferred At a Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 12,774 | 6,828 |
Transferred Over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 13,247 | $ 180 |
Revenue and Deferred Revenue _3
Revenue and Deferred Revenue (Details) - Schedule of Current Deferred Revenue - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Current Deferred Revenue Abstract | ||
Deferred revenue – beginning of period | $ 3,772 | $ 152 |
Additions | 5,089 | 3,758 |
Interest income on deferred revenue | 4 | |
Recognized | (4,679) | (142) |
Deferred revenue – end of period | $ 4,182 | $ 3,772 |
Fair Value Measures (Details)
Fair Value Measures (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2022 | Jan. 31, 2022 | Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |||
Contingent consideration | $ 1.4 | ||
Aggregate of common stock (in Shares) | 34,406 | 15,078 | |
Warrants exercise price (in Dollars per share) | $ 1,350 | $ 1,496 | |
Warrants issued | 40.5 | ||
Amount of remeasured and determined | $ 29.7 |
Fair Value Measures (Details) -
Fair Value Measures (Details) - Schedule of Assets and Liabilities at Fair Value on a Recurring Basis - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Total assets | $ 81,739 | $ 44,728 |
Liabilities: | ||
Total liabilities | 37,268 | 6,137 |
Contingent Consideration [Member] | ||
Liabilities: | ||
Total liabilities | 7,557 | 6,137 |
Warrant [Member] | ||
Liabilities: | ||
Total liabilities | 29,711 | |
Mutual funds (included in cash and cash equivalents) [Member] | ||
Assets: | ||
Total assets | 43,528 | 178 |
Municipal bonds [Member] | ||
Assets: | ||
Total assets | 19,306 | 9,961 |
Corporate bonds [Member] | ||
Assets: | ||
Total assets | 18,905 | 34,589 |
Level 1 [Member] | ||
Assets: | ||
Total assets | 81,739 | 44,728 |
Liabilities: | ||
Total liabilities | ||
Level 1 [Member] | Contingent Consideration [Member] | ||
Liabilities: | ||
Total liabilities | ||
Level 1 [Member] | Warrant [Member] | ||
Liabilities: | ||
Total liabilities | ||
Level 1 [Member] | Mutual funds (included in cash and cash equivalents) [Member] | ||
Assets: | ||
Total assets | 43,528 | 178 |
Level 1 [Member] | Municipal bonds [Member] | ||
Assets: | ||
Total assets | 19,306 | 9,961 |
Level 1 [Member] | Corporate bonds [Member] | ||
Assets: | ||
Total assets | 18,905 | 34,589 |
Level 2 [Member] | ||
Assets: | ||
Total assets | ||
Liabilities: | ||
Total liabilities | ||
Level 2 [Member] | Contingent Consideration [Member] | ||
Liabilities: | ||
Total liabilities | ||
Level 2 [Member] | Warrant [Member] | ||
Liabilities: | ||
Total liabilities | ||
Level 2 [Member] | Mutual funds (included in cash and cash equivalents) [Member] | ||
Assets: | ||
Total assets | ||
Level 2 [Member] | Municipal bonds [Member] | ||
Assets: | ||
Total assets | ||
Level 2 [Member] | Corporate bonds [Member] | ||
Assets: | ||
Total assets | ||
Level 3 [Member] | ||
Assets: | ||
Total assets | ||
Liabilities: | ||
Total liabilities | 37,268 | 6,137 |
Level 3 [Member] | Contingent Consideration [Member] | ||
Liabilities: | ||
Total liabilities | 7,557 | 6,137 |
Level 3 [Member] | Warrant [Member] | ||
Liabilities: | ||
Total liabilities | 29,711 | |
Level 3 [Member] | Mutual funds (included in cash and cash equivalents) [Member] | ||
Assets: | ||
Total assets | ||
Level 3 [Member] | Municipal bonds [Member] | ||
Assets: | ||
Total assets | ||
Level 3 [Member] | Corporate bonds [Member] | ||
Assets: | ||
Total assets |
Fair Value Measures (Details)_2
Fair Value Measures (Details) - Schedule of Marketable Securities - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current marketable securities: | ||
Total current marketable securities | $ 38,211 | $ 44,550 |
Municipal bonds [Member] | ||
Current marketable securities: | ||
Total current marketable securities | 19,306 | 9,961 |
Corporate bonds [Member] | ||
Current marketable securities: | ||
Total current marketable securities | $ 18,905 | $ 34,589 |
Fair Value Measures (Details)_3
Fair Value Measures (Details) - Schedule of Amortized Cost and Estimated Fair Value of Maturity Securities $ in Thousands | Dec. 31, 2022 USD ($) |
Current marketable securities: | |
Amortized cost | $ 38,211 |
Unrealized loss | (166) |
Estimated fair value | 38,045 |
Municipal bonds [Member] | |
Current marketable securities: | |
Amortized cost | 19,306 |
Unrealized loss | (26) |
Estimated fair value | 19,280 |
Corporate Bonds [Member] | |
Current marketable securities: | |
Amortized cost | 18,905 |
Unrealized loss | (140) |
Estimated fair value | $ 18,765 |
Fair Value Measures (Details)_4
Fair Value Measures (Details) - Schedule of Contingent Consideration - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Contingent Consideration Abstract | ||
Contingent consideration – beginning of period | $ 6,137 | |
Accrued contingent consideration | 1,420 | 4,725 |
Change in estimated fair value | 1,412 | |
Contingent consideration – end of period | $ 7,557 | $ 6,137 |
Fair Value Measures (Details)_5
Fair Value Measures (Details) - Schedule of Fair Value of the PIPE Warrants and the SPA Warrants | 3 Months Ended |
Mar. 31, 2022 $ / shares | |
PIPE Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Stock price (in Dollars per share) | $ 1,100 |
Exercise price (in Dollars per share) | $ 1,496 |
Expected term (in years) | 5 years 6 months |
Annualized volatility | 87.53% |
Annual rate of quarterly dividends | 0% |
Discount rate -bond equivalent yield | 1.65% |
SPA Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Stock price (in Dollars per share) | $ 1,228 |
Exercise price (in Dollars per share) | $ 1,350 |
Expected term (in years) | 5 years 6 months |
Annualized volatility | 87.57% |
Annual rate of quarterly dividends | 0% |
Discount rate -bond equivalent yield | 2.12% |
PIPE Remeasured Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Stock price (in Dollars per share) | $ 926 |
Exercise price (in Dollars per share) | $ 1,496 |
Expected term (in years) | 5 years 3 months 18 days |
Annualized volatility | 87.68% |
Annual rate of quarterly dividends | 0% |
Discount rate -bond equivalent yield | 2.42% |
(new) SPA Remeasured Warrants [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Stock price (in Dollars per share) | $ 926 |
Exercise price (in Dollars per share) | $ 1,350 |
Expected term (in years) | 5 years 4 months 24 days |
Annualized volatility | 87.79% |
Annual rate of quarterly dividends | 0% |
Discount rate -bond equivalent yield | 2.42% |
Fair Value Measures (Details)_6
Fair Value Measures (Details) - Schedule of Changes in the Fair Value of the Level 3 Warrant Liabilities $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Schedule Of Changes In The Fair Value Of The Level3 Warrant Liabilities Abstract | |
Warrant liabilities – beginning of period | |
Initial fair value of warrant liabilities | 40,496 |
Change in estimated fair value | (10,785) |
Warrant liabilities – end of period | $ 29,711 |
Loan Receivable (Details)
Loan Receivable (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Loan Receivable (Details) [Line Items] | ||
Committed amount | $ 34,738 | $ 22,255 |
Equity percentage | 36.60% | |
Minimum [Member] | ||
Loan Receivable (Details) [Line Items] | ||
Provide for loans | $ 200 | |
Maturity date | 2 years | |
Interest rates | 12% | |
Maximum [Member] | ||
Loan Receivable (Details) [Line Items] | ||
Provide for loans | $ 13,500 | |
Maturity date | 3 years | |
Interest rates | 18% | |
Agrify TTK Solution [Member] | ||
Loan Receivable (Details) [Line Items] | ||
Initial investment amount | $ 50,000 | |
Committed amount | $ 32,900 | $ 20,300 |
Number of customers | 5 | 5 |
Loan Receivable (Details) - Sch
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company [Line Items] | |||
Loan receivable | $ 34,738 | $ 22,255 | |
Company A – Agrify TTK Solution [Member] | |||
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company [Line Items] | |||
Loan receivable | 9,579 | 5,542 | |
Greenstone Holdings – TTK Solution – Related Party [Member] | |||
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company [Line Items] | |||
Loan receivable | 12,446 | 11,177 | |
Company C – Agrify TTK Solution [Member] | |||
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company [Line Items] | |||
Loan receivable | 7,479 | 2,439 | |
Company D – Agrify TTK Solution [Member] | |||
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company [Line Items] | |||
Loan receivable | 3,338 | 1,105 | |
Company E – Agrify TTK Solution [Member] | |||
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company [Line Items] | |||
Loan receivable | 46 | 46 | |
Company F – Non-TTK Solution [Member] | |||
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company [Line Items] | |||
Loan receivable | [1] | 1,538 | 1,946 |
Non-TTK Solutions [Member] | |||
Loan Receivable (Details) - Schedule of Breakdown of Loans Receivable by Company [Line Items] | |||
Loan receivable | $ 312 | ||
[1] Current portion of loan receivable are included within Note 10 – Prepaid Expenses and Other Current Receivables, included elsewhere in the notes to the condensed consolidated financial statements. |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Accounts Receivable (Details) [Line Items] | |||
Bad debt expense | $ 1,187 | ||
NEIA [Member] | |||
Accounts Receivable (Details) [Line Items] | |||
Accounts receivable, net | $ 1,300 | $ 3,500 |
Accounts Receivable (Details) -
Accounts Receivable (Details) - Schedule of Accounts Receivable - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule Of Accounts Receivable Abstract | ||
Accounts receivable, gross | $ 9,986 | $ 8,637 |
Less allowance for doubtful accounts | (1,415) | (1,415) |
Accounts receivable, net | $ 8,571 | $ 7,222 |
Accounts Receivable (Details)_2
Accounts Receivable (Details) - Schedule of Allowance for Doubtful Accounts - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Schedule Of Allowance For Doubtful Accounts Abstract | |||
Allowance for doubtful accounts - beginning of period | $ 1,415 | $ 54 | $ 54 |
Provision for doubtful accounts | 1,187 | ||
Other adjustments | 174 | ||
Allowance for doubtful accounts - end of period | $ 1,415 | $ 1,415 |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of Inventory - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule Of Inventory Abstract | |||
Raw materials | $ 7,211 | $ 6,393 | |
Prepaid inventory | 10,745 | 2,237 | |
Finished goods | 21,975 | 12,810 | |
Inventory, gross | 39,931 | 21,440 | |
Inventory reserves | (942) | (942) | |
Total inventory, net | $ 38,989 | $ 20,498 |
Inventory (Details) - Schedul_2
Inventory (Details) - Schedule of Establishes Inventory Reserves for Obsolete, Slow Moving and Defective Items - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Establishes Inventory Reserves For Obsolete Slow Moving And Defective Items Abstract | ||
Inventory reserves – beginning of period | $ 942 | |
Increase in inventory reserves | 942 | |
Inventory write-offs | ||
Inventory reserves – end of period | $ 942 | $ 942 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - Schedule of prepaid expenses and other receivables - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Prepaid Expenses And Other Receivables Abstract | |||
Prepaid insurance | $ 2,353 | $ 492 | |
Prepaid software | 151 | 173 | |
Prepaid expenses, other | 1,828 | 541 | |
Deferred costs | 492 | 353 | |
Other note receivables | [1] | 1,240 | 807 |
Other receivables, other | 384 | 86 | |
Total prepaid expenses and other current assets | $ 6,448 | $ 2,452 | |
[1] Other note receivables relate to the current portion of one of our TTK Solutions loan receivable balances. |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property and Equipment, Net [Abstract] | ||
Depreciation expense | $ 379 | $ 90 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of Property and Equipment, Net - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 4,288 | $ 3,776 |
Accumulated depreciation | (1,156) | (780) |
Construction in progress | 3,923 | 3,236 |
Total property and equipment, net | 7,055 | 6,232 |
Computer and office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 519 | 473 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 458 | 385 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 993 | 841 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 990 | 898 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 210 | 174 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 143 | 143 |
Research and development laboratory equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 205 | 163 |
Leased equipment at customer [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 690 | 619 |
Trade show assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 80 | $ 80 |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Intangible Assets and Goodwill [Abstract] | ||
Amortization expenses | $ 673 | $ 58 |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill (Details) - Schedule of Intangible Assets - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets, Net and Goodwill (Details) - Schedule of Intangible Assets [Line Items] | ||
Intangible Assets, Gross beginning | $ 14,952 | $ 1,919 |
Intangible Assets, Gross Additions and Retirements, net | 2,462 | 13,033 |
Intangible Assets, Gross ending | 17,414 | 14,952 |
Accumulated Amortization, beginning | (880) | (225) |
Accumulated Amortization Expense and Retirements, net | (673) | (655) |
Accumulated Amortization, ending | (1,553) | (880) |
Intangible Assets, Net ending | 15,861 | 14,072 |
Intangible Assets, Net beginning | 14,072 | 1,694 |
Trade names [Member] | ||
Intangible Assets, Net and Goodwill (Details) - Schedule of Intangible Assets [Line Items] | ||
Intangible Assets, Gross beginning | 2,418 | 930 |
Intangible Assets, Gross Additions and Retirements, net | 317 | 1,488 |
Intangible Assets, Gross ending | 2,735 | 2,418 |
Accumulated Amortization, beginning | (227) | (88) |
Accumulated Amortization Expense and Retirements, net | (91) | (139) |
Accumulated Amortization, ending | (318) | (227) |
Intangible Assets, Net ending | 2,417 | 2,191 |
Intangible Assets, Net beginning | 2,191 | 842 |
Customer Relationships [Member] | ||
Intangible Assets, Net and Goodwill (Details) - Schedule of Intangible Assets [Line Items] | ||
Intangible Assets, Gross beginning | 6,176 | 850 |
Intangible Assets, Gross Additions and Retirements, net | 713 | 5,326 |
Intangible Assets, Gross ending | 6,889 | 6,176 |
Accumulated Amortization, beginning | (302) | (89) |
Accumulated Amortization Expense and Retirements, net | (247) | (213) |
Accumulated Amortization, ending | (549) | (302) |
Intangible Assets, Net ending | 6,340 | 5,874 |
Intangible Assets, Net beginning | 5,874 | 761 |
Acquired developed Technology [Member[ | ||
Intangible Assets, Net and Goodwill (Details) - Schedule of Intangible Assets [Line Items] | ||
Intangible Assets, Gross beginning | 4,911 | |
Intangible Assets, Gross Additions and Retirements, net | 1,432 | 4,911 |
Intangible Assets, Gross ending | 6,343 | 4,911 |
Accumulated Amortization, beginning | (191) | |
Accumulated Amortization Expense and Retirements, net | (255) | (191) |
Accumulated Amortization, ending | (446) | (191) |
Intangible Assets, Net ending | 5,897 | 4,720 |
Intangible Assets, Net beginning | 4,720 | |
Non-compete [Member] | ||
Intangible Assets, Net and Goodwill (Details) - Schedule of Intangible Assets [Line Items] | ||
Intangible Assets, Gross beginning | 1,202 | |
Intangible Assets, Gross Additions and Retirements, net | 1,202 | |
Intangible Assets, Gross ending | 1,202 | 1,202 |
Accumulated Amortization, beginning | (60) | |
Accumulated Amortization Expense and Retirements, net | (60) | (60) |
Accumulated Amortization, ending | (120) | (60) |
Intangible Assets, Net ending | 1,082 | 1,142 |
Intangible Assets, Net beginning | 1,142 | |
Capitalized website costs [Member] | ||
Intangible Assets, Net and Goodwill (Details) - Schedule of Intangible Assets [Line Items] | ||
Intangible Assets, Gross beginning | 245 | 139 |
Intangible Assets, Gross Additions and Retirements, net | 106 | |
Intangible Assets, Gross ending | 245 | 245 |
Accumulated Amortization, beginning | (100) | (48) |
Accumulated Amortization Expense and Retirements, net | (20) | (52) |
Accumulated Amortization, ending | (120) | (100) |
Intangible Assets, Net ending | 125 | 145 |
Intangible Assets, Net beginning | $ 145 | $ 91 |
Intangible Assets, Net and Go_5
Intangible Assets, Net and Goodwill (Details) - Schedule of Estimated Amortization Expense $ in Thousands | Mar. 31, 2022 USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remaining 2022 | $ 2,103 |
2023 | 2,772 |
2024 | 2,763 |
2025 | 2,737 |
2026 | 2,486 |
2027 and thereafter | 3,000 |
Total | $ 15,861 |
Intangible Assets, Net and Go_6
Intangible Assets, Net and Goodwill (Details) - Schedule of Goodwill Consist - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Goodwill Consist Abstract | ||
Goodwill - beginning of period | $ 50,090 | $ 632 |
Goodwill - end of period | 54,544 | 50,090 |
Goodwill acquired during period | 4,368 | 49,458 |
Goodwill purchase accounting adjustment | $ 86 |
Other Non-Current Assets (Detai
Other Non-Current Assets (Details) - Schedule of Other Non-Current Assets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule Of Other Non Current Assets Abstract | ||
Long-term deferred commissions expense | $ 3,008 | $ 1,101 |
Security deposits | 97 | 83 |
Total other non-current assets | $ 3,105 | $ 1,184 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - Schedule of Accrued Expenses and Other Current Liabilities - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Accrued Expenses And Other Current Liabilities Abstract | |||
Accrued acquisition liability | [1] | $ 11,179 | $ 9,198 |
Sales tax payable | [2] | 5,520 | 5,290 |
Accrued construction costs | 8,542 | 8,803 | |
Compensation related fees | 3,232 | 3,491 | |
Accrued professional fees | 466 | 1,104 | |
Accrued warranty expenses | 398 | 398 | |
Accrued consulting fees | 75 | ||
Accrued inventory purchases | 536 | 201 | |
Financing lease liabilities | 182 | 156 | |
Accrued non-income taxes | 57 | 48 | |
Total accrued expenses and other current liabilities | $ 30,112 | $ 28,764 | |
[1] Accrued acquisition liabilities includes both the contingent consideration and the value of held back Common Stock associated with the 2022 acquisition of Lab Society and the 2021 acquisitions of Precision, Cascade and PurePressure. Sales tax payable primarily represents identified sales and use tax liabilities arising from our acquisition of Precision and Cascade. These amounts are included as part of our initial purchase price allocations and are the subject matter of an indemnification claim under the Precision and Cascade acquisition agreement. |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Business Combination (Details) [Line Items] | ||||
Business acquisition description | The aggregate consideration for the Lab Society Acquisition consisted of: (a) $4.0 million in cash, subject to certain adjustments for working capital, cash and indebtedness of Lab Society at closing; (b) 2,128 shares of Common Stock (the “Buyer Shares”); and (c) the Earn-out Consideration (as defined below), to the extent earned. | |||
Revenue | $ 26,021 | $ 7,008 | ||
Interest purchase | 30,000 | |||
Subject to adjustment, equal to the quotient | 20,000 | |||
Purchase agreement amount | $ 65,000 | |||
Fair value of the contingent earn-out consideration | $ 5,400 | |||
Buyer shares issuable to certain members (in Shares) | 444 | |||
Pure purchase agreement, description | The Pure Purchase Agreement includes customary post-closing adjustments, representations and warranties and covenants of the parties. The Members may become entitled to additional consideration with a value of up to $3.0 million based on the eligible net revenues achieved by the PurePressure business during the fiscal years ending December 31, 2022 and December 31, 2023, of which 40% will be payable in cash and the remaining 60% will be payable by issuing shares of Common Stock (collectively, the “Earn-out Consideration”). | |||
Holdback Lab Buyer Shares [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Shares issuable (in Shares) | 638 | 638 | ||
Acquisition of Lab Society [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Business acquisition description | The Owners may become entitled to additional consideration with a value of up to $3.5 million based on the eligible net revenues achieved by the Lab Society business during the fiscal years ending December 31, 2022 and December 31, 2023, of which 50% will be payable in cash and the remaining 50% will be payable by issuing shares of Common Stock. | |||
Totaled acquisition | $ 28 | $ 28 | ||
Revenue | $ 1,500 | |||
Cascade Sciences, LLC [Member] | Nonconsolidated Investees, Other [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Percentage of equity interest | 100% | 100% | ||
Business Combination [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Totaled acquisition | $ 38 | $ 38 | ||
PurePressure [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Intangible assets acquired | $ 4,000 | |||
Common stock (in Shares) | 1,646 | 1,646 | ||
Acquisition of PurePressure [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Totaled acquisition | $ 562 | $ 562 |
Business Combination (Details)
Business Combination (Details) - Schedule of Components and the Allocation of the Purchase Price $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Acquisition of Lab Society [Member] | |
Purchase price consideration: | |
Estimated closing proceeds | $ 4,002 |
Transaction expenses | 80 |
Closing buyer shares | 1,904 |
Holdback buyer shares | 816 |
Earn-out consideration | 1,420 |
Estimated working capital adjustments | (255) |
Fair value of total consideration transferred | 7,967 |
Total purchase price, net of cash acquired | 7,402 |
Fair value allocation of purchase price: | |
Cash and cash equivalents | 565 |
Accounts receivable | 511 |
Inventory | 2,130 |
Prepaid expenses and other current receivables | 55 |
Right of use assets, net | 304 |
Property and equipment, net | 177 |
Prepaid and refundable taxes | 194 |
Accounts payable, accrued expenses, and other current liabilities | (1,224) |
Deferred revenue | (963) |
Deferred tax liability | (237) |
Finance lease liabilities, current | (36) |
Finance lease liabilities, noncurrent | (35) |
Operating lease liabilities, current | (112) |
Operating lease liabilities, noncurrent | (192) |
Acquired intangible assets | 2,462 |
Goodwill | 4,368 |
Total purchase price | 7,967 |
Cascade and Precision [Member] | |
Purchase price consideration: | |
Fair value of total consideration transferred | 49,918 |
Total purchase price, net of cash acquired | 48,630 |
Fair value allocation of purchase price: | |
Cash and cash equivalents | 1,288 |
Accounts receivable | 897 |
Inventory | 6,761 |
Prepaid expenses and other current receivables | 1,736 |
Right of use assets, net | 730 |
Capitalized web costs, net | 2 |
Property and equipment, net | 970 |
Accounts payable, accrued expenses, and other current liabilities | (9,223) |
Deferred revenue | (5,419) |
Long-term debt | (1,961) |
Operating lease liabilities, current | (392) |
Operating lease liabilities, noncurrent | (362) |
Acquired intangible assets | 9,889 |
Goodwill | 45,002 |
Total purchase price | 49,918 |
Purchase price consideration: | |
Cash paid to Sinclair Members at close | 23,000 |
Cash contributed to escrow accounts at close | 7,000 |
Cash paid for excess net working capital | 1,430 |
Stock issued at close | 14,535 |
Fair value of contingent consideration to be achieved | 3,953 |
Acquisition of PurePressure [Member] | |
Purchase price consideration: | |
Estimated closing proceeds | 3,613 |
Indebtedness paid | 320 |
Transaction expenses | 115 |
Closing buyer shares | 2,211 |
Holdback buyer shares | 654 |
Earn-out consideration | 707 |
Estimated working capital adjustments | 330 |
Fair value of total consideration transferred | 7,950 |
Total purchase price, net of cash acquired | 7,647 |
Fair value allocation of purchase price: | |
Cash and cash equivalents | 303 |
Accounts receivable | 48 |
Inventory | 1,537 |
Prepaid expenses and other current receivables | 61 |
Other non-current assets | 16 |
Right of use assets, net | 191 |
Property and equipment, net | 219 |
Accounts payable, accrued expenses, and other current liabilities | (765) |
Deferred revenue | (762) |
Finance lease liabilities, current | (4) |
Finance lease liabilities, noncurrent | (10) |
Notes payable, current | (260) |
Notes payable, noncurrent | (12) |
Operating lease liabilities, current | (117) |
Operating lease liabilities, noncurrent | (74) |
Acquired intangible assets | 3,037 |
Goodwill | 4,542 |
Total purchase price | $ 7,950 |
Business Combination (Details_2
Business Combination (Details) - Schedule of Intangible Assets Consist of Trade Names, Technology, Non-Compete Agreements, and Customer Relationships $ in Thousands | Mar. 31, 2022 USD ($) |
Acquisition of Lab Society [Member] | Trade Names [Member] | |
Identified intangible assets: | |
Asset Value | $ 317 |
Useful Life | 5 years |
Acquisition of Lab Society [Member] | Acquired developed Technology [Member[ | |
Identified intangible assets: | |
Asset Value | $ 1,432 |
Useful Life | 8 years |
Acquisition of Lab Society [Member] | Customer relationships [Member] | |
Identified intangible assets: | |
Asset Value | $ 713 |
Useful Life | 6 years |
Acquisition of Lab Society [Member] | Total identified intangible assets [Member] | |
Identified intangible assets: | |
Asset Value | $ 2,462 |
Cascade and Precision [Member] | Trade Names [Member] | |
Identified intangible assets: | |
Asset Value | $ 1,260 |
Cascade and Precision [Member] | Trade Names [Member] | Minimum [Member] | |
Identified intangible assets: | |
Useful Life | 6 years |
Cascade and Precision [Member] | Trade Names [Member] | Maximum [Member] | |
Identified intangible assets: | |
Useful Life | 7 years |
Cascade and Precision [Member] | Acquired developed Technology [Member[ | |
Identified intangible assets: | |
Asset Value | $ 3,818 |
Useful Life | 5 years |
Cascade and Precision [Member] | Customer relationships [Member] | |
Identified intangible assets: | |
Asset Value | $ 3,609 |
Cascade and Precision [Member] | Customer relationships [Member] | Minimum [Member] | |
Identified intangible assets: | |
Useful Life | 7 years |
Cascade and Precision [Member] | Customer relationships [Member] | Maximum [Member] | |
Identified intangible assets: | |
Useful Life | 8 years |
Cascade and Precision [Member] | Total identified intangible assets [Member] | |
Identified intangible assets: | |
Asset Value | $ 9,889 |
Cascade and Precision [Member] | Non-compete agreements [Member] | |
Identified intangible assets: | |
Asset Value | $ 1,202 |
Useful Life | 5 years |
PurePressure [Member] | Trade Names [Member] | |
Identified intangible assets: | |
Asset Value | $ 227 |
Useful Life | 5 years |
PurePressure [Member] | Acquired developed Technology [Member[ | |
Identified intangible assets: | |
Asset Value | $ 1,093 |
Useful Life | 8 years |
PurePressure [Member] | Total identified intangible assets [Member] | |
Identified intangible assets: | |
Asset Value | $ 3,037 |
PurePressure [Member] | Non-compete agreements [Member] | |
Identified intangible assets: | |
Asset Value | $ 1,717 |
Useful Life | 5 years |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 14, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | Oct. 04, 2022 | |
Debt (Details) [Line Items] | ||||
Securities purchase agreements description | the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an accredited investor (the “Investor”), pursuant to which the Company agreed to issue and sell to the Investor, in a private placement transaction, in exchange for the payment by the Investor of $65 million, less applicable expenses, as set forth in the Securities Purchase Agreement, (i) a SPA Note in an aggregate principal amount of $65 million, and (ii) a warrant (the “SPA Warrant”) to purchase up to an aggregate of 34,406 shares of Common Stock. | |||
Original principal amount percentage | 4% | 106.75% | ||
Extending through maturity date | Mar. 01, 2026 | |||
Interest rate percentage | The SPA Note has a stated interest rate of 6.75% per year, and the Company is required to pay interest on March 1, June 1, September 1, and December 1 of each calendar year through the Maturity Date. | |||
Note calculated rate of per annum (in Dollars) | $ 8.75 | |||
Fundamental change percentage | 107% | |||
Original principal amount (in Dollars) | $ 35,000,000 | $ 10,000,000 | ||
Divided principal amount | 65% | |||
Outstanding principal amount percentage | 115% | |||
Accrues at rate per annum | 15% | |||
Participate any debt | 30% | |||
Exercise price per share (in Dollars per share) | $ 1,350 | |||
Warrant description | The SPA Warrant provides that in no event will the number of shares of Common Stock issued upon exercise of the SPA Warrant result in the Investor’s beneficial ownership exceeding 4.99% of the Company’s shares outstanding at the time of exercise (which percentage may be decreased or increased by the Investor, but to no greater than 9.99%, and provided that any increase above 4.99% will not be effective until the sixty-first day after notice of such request by the Investor to increase its beneficial ownership limit has been delivered to the Company). | |||
Total proceeds (in Dollars) | $ 159,000 | $ 779,000 | ||
PPP loan [Member] | ||||
Debt (Details) [Line Items] | ||||
Loan forgiven (in Dollars) | 779,000 | |||
Principal amount (in Dollars) | $ 779,000 |
Debt (Details) - Schedule of De
Debt (Details) - Schedule of Debt - Notes payable [Member] - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule of Debt [Abstract] | |||
Note payable – SPA Note | $ 65,000 | ||
PPP Loan | 794 | 804 | |
Other notes payable | [1] | 1,487 | 297 |
Total debt | 67,281 | 1,101 | |
Less: unamortized debt discount | (29,303) | ||
Total debt, net of debt discount | 37,978 | 1,101 | |
Less: current portion, net of current unamortized debt discount | (2,281) | (1,089) | |
Long-term debt | $ 35,697 | $ 12 | |
[1] Other notes payable relates to one-year insurance premium that was financed over nine-months. |
Debt (Details) - Schedule of Br
Debt (Details) - Schedule of Breakdown of the Note Payable Balance $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Accrued interest expense [Member] | |
Schedule of Breakdown of the Note Payable Balance [Abstract] | |
Opening balance | |
Additions | (98) |
Payments | |
Amortization of Debt Discount | |
Ending balance | (98) |
Principal [Member] | |
Schedule of Breakdown of the Note Payable Balance [Abstract] | |
Opening balance | |
Additions | 65,000 |
Payments | |
Amortization of Debt Discount | |
Ending balance | 65,000 |
Notes payable, discount [Member] | |
Schedule of Breakdown of the Note Payable Balance [Abstract] | |
Opening balance | |
Additions | (29,527) |
Payments | |
Amortization of Debt Discount | 224 |
Ending balance | (29,303) |
Net carrying amount [Member] | |
Schedule of Breakdown of the Note Payable Balance [Abstract] | |
Opening balance | |
Additions | 35,473 |
Payments | |
Amortization of Debt Discount | 224 |
Ending balance | $ 35,697 |
Debt (Details) - Schedule of Sh
Debt (Details) - Schedule of Short-Term and Long-Term Portion of Debt $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Short Term [Member] | |
Schedule of Short-Term and Long-Term Portion of Debt [Abstract] | |
Principal | $ 5,200 |
Principal | (5,200) |
Principal | |
Long Term [Member] | |
Schedule of Short-Term and Long-Term Portion of Debt [Abstract] | |
Principal | 59,800 |
Principal | (24,103) |
Principal | 35,697 |
Notes payable, net [Member] | |
Schedule of Short-Term and Long-Term Portion of Debt [Abstract] | |
Principal | 65,000 |
Principal | (29,303) |
Principal | $ 35,697 |
Debt (Details) - Schedule of Fu
Debt (Details) - Schedule of Future Minimum Payments $ in Thousands | Mar. 31, 2022 USD ($) |
Schedule of Future Minimum Payments [Abstract] | |
Remaining 2022 | $ 0 |
2023 | 28,600 |
2024 | 31,200 |
2025 | 5,200 |
Total future payments | $ 65,000 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Feb. 01, 2021 | Mar. 31, 2022 | Jan. 11, 2021 | |
Convertible Promissory Notes (Details) [Line Items] | |||
Derivative liabilities | $ 7,100 | ||
Fair value of beneficial conversion feature | 3,800 | ||
IPO [Member] | |||
Convertible Promissory Notes (Details) [Line Items] | |||
Conversion price (in Dollars per share) | $ 1,544 | ||
Aggregate principal amount | $ 13,100 | ||
Shares of common stock (in Shares) | 8,485 | ||
Convertible Notes Payable [Member] | |||
Convertible Promissory Notes (Details) [Line Items] | |||
Conversion price (in Dollars per share) | $ 1,544 | ||
Gain on extinguishment | 2,700 | ||
Extinguished debit | 19,600 | ||
Principal amount | 13,100 | ||
Debt discount | 587 | ||
Fair value of the new convertible notes | 16,900 | ||
Convertible notes principal amount | $ 13,100 |
Capital Structure (Details)
Capital Structure (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |||||||||||||
Feb. 01, 2022 | Jan. 25, 2022 | Dec. 31, 2021 | Dec. 18, 2021 | Oct. 01, 2021 | Mar. 22, 2021 | Feb. 19, 2021 | Feb. 04, 2021 | Feb. 01, 2021 | Jan. 11, 2021 | May 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | Jan. 09, 2020 | |
Capital Structure (Details) [Line Items] | |||||||||||||||
Authorized number of shares | 265,000 | ||||||||||||||
Shares of common stock | 250,000 | ||||||||||||||
Preferred stock shares | 3,000,000 | ||||||||||||||
Preferred stock shares, authorized | 2,895,000 | 2,895,000 | |||||||||||||
Additional shares of common stock | 27,778 | ||||||||||||||
Common stock price per share (in Dollars per share) | $ 2,700 | $ 2,700 | |||||||||||||
Purchase of warrants | 125 | 833 | 121 | 810 | 50,780 | ||||||||||
Exercise price per share (in Dollars per share) | $ 3,375 | ||||||||||||||
Percentage of IPO price | 125% | ||||||||||||||
Percentage of exercised | 3% | ||||||||||||||
Total net proceeds (in Dollars) | $ 80,000 | ||||||||||||||
Total net proceeds shares | 31,944 | ||||||||||||||
Purchase of aggregate shares | 7,853 | ||||||||||||||
Purchase price description | The combined purchase price for one share of Common Stock (or one Pre-Funded Warrant) and accompanying fraction of a Common Warrant was $1,360.00. | ||||||||||||||
Pre-funded warrant description | Each Pre-Funded Warrant was exercisable into one share of Common Stock at a price per share of $0.00001 (as adjusted from time to time in accordance with the terms thereof). Each Common Warrant is exercisable into one share of Common Stock at a price per share of $1,496.00 (as adjusted from time to time in accordance with the terms thereof) and will expire on the fifth anniversary of the initial exercise date. | ||||||||||||||
Aggregate shares of common stock | 1,202 | 3,332 | |||||||||||||
Share issued | 1,491 | ||||||||||||||
Stock option compensation expense (in Dollars) | $ 953,000 | $ 2,100 | |||||||||||||
Total unrecognized compensation cost (in Dollars) | 3,400 | ||||||||||||||
Exercise of warrants (in Dollars) | $ 1 | $ 5 | |||||||||||||
IPO [Member] | |||||||||||||||
Capital Structure (Details) [Line Items] | |||||||||||||||
Additional shares of common stock | 27,000 | ||||||||||||||
Common stock price per share (in Dollars per share) | $ 2,000 | $ 2,000 | |||||||||||||
Additional shares of common stock | 4,050 | ||||||||||||||
Aggregate number of shares of common stock issued percentage | 3% | ||||||||||||||
Exercise price per share (in Dollars per share) | $ 2,500 | ||||||||||||||
Percentage of IPO price | 125% | ||||||||||||||
IPO shares | 31,050 | ||||||||||||||
Total net proceeds (in Dollars) | $ 57,000 | ||||||||||||||
Over-allotment option [Member] | |||||||||||||||
Capital Structure (Details) [Line Items] | |||||||||||||||
Additional shares of common stock | 4,167 | 4,050 | |||||||||||||
Exercise price per share (in Dollars per share) | $ 3,375 | $ 2,500 | |||||||||||||
Percentage of exercised | 3% | 3% | |||||||||||||
Additional shares of common stock | 4,167 | ||||||||||||||
Private Placement [Member] | |||||||||||||||
Capital Structure (Details) [Line Items] | |||||||||||||||
Additional shares of common stock | 12,252 | ||||||||||||||
Purchase of warrants aggregate | 15,079 | ||||||||||||||
Purchase price per share (in Dollars per share) | $ 1,380 | ||||||||||||||
Gross proceeds (in Dollars) | $ 27,300 | ||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||
Capital Structure (Details) [Line Items] | |||||||||||||||
Designated shares | 100,000 | ||||||||||||||
Preferred stock shares, authorized | 3,000,000 | ||||||||||||||
Converted shares of common stock | 6,865 | ||||||||||||||
Shares of common stock | 8,485 | ||||||||||||||
Conversion price (in Dollars per share) | $ 1,544 | ||||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||||
Capital Structure (Details) [Line Items] | |||||||||||||||
Aggregate shares | 60,000 | ||||||||||||||
Aggregate purchase price (in Dollars) | $ 4,000 | $ 6,000 | |||||||||||||
Additional shares of common stock | 40,000 | ||||||||||||||
Convertible preferred stock terms of conversion | 1.the Series A Preferred Stock is convertible, at any time after issuance or immediately prior to the closing of a public transaction, into Common Stock in an amount of shares equal to (i) the product of the Series A Preferred Stock original price plus accrued but unpaid dividends on the shares being converted, multiplied by the number of shares of Series A Preferred Stock being converted, divided by (ii) a conversion price of $7.72 per share (after the reverse split taking effect); and 2.immediately prior to the consummation of a public transaction, the outstanding principal amount of the Convertible Notes together with all accrued and unpaid interest shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the quotient of (i) the outstanding principal amount of the Convertible Notes together with all accrued and unpaid interest thereunder immediately prior to such public transaction divided by (ii) a conversion price of $7.72 (after the reverse split taking effect). | ||||||||||||||
2020 Plan [Member] | |||||||||||||||
Capital Structure (Details) [Line Items] | |||||||||||||||
Issuance of shares | 22,669 | ||||||||||||||
Shares available to be granted | 2,580 |
Capital Structure (Details) - S
Capital Structure (Details) - Schedule of Valuation of Options Granted | 12 Months Ended |
Dec. 31, 2021 | |
Capital Structure (Details) - Schedule of Valuation of Options Granted [Line Items] | |
Volatility | 40% |
Dividend yield | 0% |
0% Expected life (years) | 10 years |
Forfeiture rate | 0% |
Minimum [Member] | |
Capital Structure (Details) - Schedule of Valuation of Options Granted [Line Items] | |
Risk-free interest rate | 1.10% |
Maximum [Member] | |
Capital Structure (Details) - Schedule of Valuation of Options Granted [Line Items] | |
Risk-free interest rate | 1.63% |
Capital Structure (Details) -_2
Capital Structure (Details) - Schedule of Option Activity Under the Company's Stock Option Plans - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Capital Structure (Details) - Schedule of Option Activity Under the Company's Stock Option Plans [Line Items] | ||
Number of Options, outstanding beginning | 17,821 | 15,666 |
Weighted Average Exercise Price, outstanding beginning | $ 1,436 | $ 702 |
Aggregate Intrinsic Value, outstanding beginning | $ 62,640 | |
Number of Options, Options vested and exercisable | 10,562 | |
Weighted Average Exercise Price, Options vested and exercisable | $ 1,108 | |
Number of Options, Options vested and expected to vest | 15,967 | |
Weighted Average Exercise Price, Options vested and expected to vest | $ 1,380 | |
Number of Options, Granted | 6,005 | |
Weighted Average Exercise Price, Granted | $ 2,558 | |
Number of Options, Exercised | (21) | (871) |
Weighted Average Exercise Price, Exercised | $ 460 | $ 502 |
Number of Options, Forfieted | (758) | (1,384) |
Weighted Average Exercise Price, Forfieted | $ 1,370 | $ 734 |
Number of Options, Expired | (267) | (21) |
Weighted Average Exercise Price, Expired | $ 3,546 | $ 456 |
Number of Options, outstanding ending | 16,775 | 19,395 |
Weighted Average Exercise Price, outstanding ending | $ 1,406 | $ 1,284 |
Aggregate Intrinsic Value, outstanding ending | $ 12,230 |
Capital Structure (Details) -_3
Capital Structure (Details) - Schedule of Options Vested and Exercisable | 3 Months Ended |
Mar. 31, 2022 USD ($) $ / shares shares | |
Exercise Price Range One [Member] | |
Capital Structure (Details) - Schedule of Options Vested and Exercisable [Line Items] | |
Price | $ 456,000 |
Options Vested and Exercisable, Number of Options (in Shares) | shares | 4,210 |
Options Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years) | 8 years 1 month 20 days |
Options Vested and Exercisable, Weighted-Average Exercise Price (in Dollars per share) | $ / shares | $ 456 |
Exercise Price Range Two [Member] | |
Capital Structure (Details) - Schedule of Options Vested and Exercisable [Line Items] | |
Price | $ 972,000 |
Options Vested and Exercisable, Number of Options (in Shares) | shares | 4,174 |
Options Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years) | 8 years 6 months 25 days |
Options Vested and Exercisable, Weighted-Average Exercise Price (in Dollars per share) | $ / shares | $ 972 |
Exercise Price Range Three [Member] | |
Capital Structure (Details) - Schedule of Options Vested and Exercisable [Line Items] | |
Options Vested and Exercisable, Number of Options (in Shares) | shares | 2,178 |
Options Vested and Exercisable, Weighted-Average Remaining Contractual Life (Years) | 8 years 9 months 25 days |
Options Vested and Exercisable, Weighted-Average Exercise Price (in Dollars per share) | $ / shares | $ 2,624 |
Exercise Price Range Three [Member] | Minimum [Member] | |
Capital Structure (Details) - Schedule of Options Vested and Exercisable [Line Items] | |
Price | $ 1,536,000 |
Exercise Price Range Three [Member] | Maximum [Member] | |
Capital Structure (Details) - Schedule of Options Vested and Exercisable [Line Items] | |
Price | $ 2,898,000 |
Capital Structure (Details) -_4
Capital Structure (Details) - Schedule of Options Expected to Vest | 3 Months Ended |
Mar. 31, 2022 USD ($) $ / shares shares | |
456.00 [Member] | |
Capital Structure (Details) - Schedule of Options Expected to Vest [Line Items] | |
Price | $ 456,000 |
Options Vested and Expected to Vest, Number of Options (in Shares) | shares | 5,073 |
Options Vested and Expected to Vest, Weighted-Average Remaining Contractual Life (Years) | 8 years 1 month 20 days |
Options Vested and Expected to Vest, Weighted-Average Exercise Price (in Dollars per share) | $ / shares | $ 456 |
972.00 [Member] | |
Capital Structure (Details) - Schedule of Options Expected to Vest [Line Items] | |
Price | $ 972,000 |
Options Vested and Expected to Vest, Number of Options (in Shares) | shares | 5,375 |
Options Vested and Expected to Vest, Weighted-Average Remaining Contractual Life (Years) | 8 years 6 months 25 days |
Options Vested and Expected to Vest, Weighted-Average Exercise Price (in Dollars per share) | $ / shares | $ 972 |
1,536.00-$2,898.00 [Member] | |
Capital Structure (Details) - Schedule of Options Expected to Vest [Line Items] | |
Options Vested and Expected to Vest, Number of Options (in Shares) | shares | 5,519 |
Options Vested and Expected to Vest, Weighted-Average Remaining Contractual Life (Years) | 8 years 9 months 25 days |
Options Vested and Expected to Vest, Weighted-Average Exercise Price (in Dollars per share) | $ / shares | $ 2,628 |
1,536.00-$2,898.00 [Member] | Minimum [Member] | |
Capital Structure (Details) - Schedule of Options Expected to Vest [Line Items] | |
Price | $ 1,536,000 |
1,536.00-$2,898.00 [Member] | Maximum [Member] | |
Capital Structure (Details) - Schedule of Options Expected to Vest [Line Items] | |
Price | $ 2,898,000 |
Capital Structure (Details) -_5
Capital Structure (Details) - Schedule of Warrant Activity - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 30, 2021 | |
Warrant [Member] | ||
Capital Structure (Details) - Schedule of Warrant Activity [Line Items] | ||
Number of Warrants, outstanding beginning | 1,358 | 4,140 |
Number of Warrants, Granted | 57,339 | 1,890 |
Number of Warrants, Exercised | (7,917) | (4,672) |
Number of Warrants, outstanding ending | 50,780 | 1,358 |
Weighted Average Exercise Price [Member] | ||
Capital Structure (Details) - Schedule of Warrant Activity [Line Items] | ||
Weighted-Average exercise price, outstanding beginning | $ 4 | $ 4 |
Weighted-Average Exercise Price, Granted | 1,204 | 4 |
Weighted-Average Exercise Price, Exercised | 0 | 4 |
Weighted-Average Exercise Price, outstanding ending | $ 1,360 | $ 4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Taxes [Abstract] | ||
Effective income tax rate, percentage | 2% | 0% |
Income taxes benefit | $ (200,000) | $ 0 |
Statutory tax rate, percentage | 21% | |
Income tax benefit of approximately | $ 200,000 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - Schedule of Basic and Diluted Net Income (Loss) Per Share - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Numerator: | |||
Net income (loss) attributable to Agrify Corporation (in Dollars) | $ 1,780 | $ (3,810) | |
Accrued dividend attributable to Preferred A Stockholders (in Dollars) | (61) | ||
Net income (loss) available for common shareholders (in Dollars) | $ 1,780 | $ (3,871) | |
Denominator: | |||
Weighted-average common shares outstanding – basic (1) | [1] | 122,946 | 57,841 |
Options outstanding | 4,807 | ||
Warrants outstanding | 1,292 | ||
Weighted-average common shares outstanding – diluted (1) | [1] | 129,045 | 57,841 |
Net income (loss) per share attributable to Common Stockholders – basic (1) (in Dollars per share) | [1] | $ 14.48 | $ (65.87) |
Net income (loss) per share attributable to Common Stockholders – diluted (1) (in Dollars per share) | [1] | $ 13.79 | $ (65.87) |
[1] Periods presented have been adjusted to reflect the 1-for-10 reverse stock split on October 18, 2022 and the 1-for-20 reverse stock split on July 5, 2023. Additional information regarding the reverse stock splits may be found in Note 1 – , included elsewhere in the notes to the condensed consolidated financial statements. |
Net Income (Loss) Per Share (_2
Net Income (Loss) Per Share (Details) - Schedule of Anti-Dilutive Shares | 3 Months Ended |
Mar. 31, 2022 shares | |
Schedule of Anti-Dilutive Shares [Abstract] | |
Anti-dilutive shares | 24,225 |
Options outstanding [Member] | |
Schedule of Anti-Dilutive Shares [Abstract] | |
Anti-dilutive shares | 19,395 |
Warrants outstanding [Member] | |
Schedule of Anti-Dilutive Shares [Abstract] | |
Anti-dilutive shares | 4,830 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Dec. 29, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Feb. 28, 2021 | Sep. 07, 2019 | |
Commitments and Contingencies (Details) [Line Items] | ||||||
Weighted average discount rate, percentage | 7.32% | |||||
Purchase order mack amount | $ 11,500,000 | $ 5,200,000 | ||||
Minimum purchases amount first year | $ 309,000 | $ 480,000 | ||||
Minimum purchases amount second year | $ 660,000 | $ 600,000 | ||||
Production service fee | $ 300 | |||||
Agreement term | 10 years | |||||
Minimum [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Finance leases have remaining lease terms | 1 year | |||||
Operating leases have remaining lease terms | 1 year | |||||
Maximum [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Finance leases have remaining lease terms | 5 years | |||||
Operating leases have remaining lease terms | 5 years |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of Lease Activity - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Schedule of Lease Activity [Abstract] | |||
Operating lease cost | $ 254 | $ 14 | |
Finance lease cost: | |||
Amortization of right-of-use assets | 48 | 45 | |
Interest on lease liabilities | 9 | 12 | |
Short-term lease cost | |||
Total lease cost | $ 311 | $ 71 | |
Weighted-average remaining lease term – operating leases | 2 years 3 months 7 days | 1 year 9 months 21 days | |
Weighted-average remaining lease term – finance leases | 2 years 9 months 10 days | 3 years 8 months 23 days | |
Weighted-average discount rate – operating leases | 6.63% | 8.13% | |
Weighted-average discount rate – finance leases | 8.01% | 8.10% | |
Right-of-use assets, net | $ 1,962 | $ 1,859 | |
Operating lease liabilities, current | 911 | 814 | |
Operating lease liabilities, non-current | 689 | 704 | |
Total operating lease liabilities | 1,600 | 1,518 | |
Finance lease liabilities, current | 182 | 156 | |
Finance lease liabilities, non-current | 275 | 293 | |
Total finance lease liabilities | $ 457 | $ 449 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of Maturities of Operating and Finance Lease Liabilities $ in Thousands | Mar. 31, 2022 USD ($) |
Operating lease [Member] | |
Schedule of Maturities of Operating and Finance Lease Liabilities Abstract] | |
Remaining 2022 | $ 705 |
2023 | 606 |
2024 | 250 |
2025 | 107 |
2026 | 63 |
Total minimum lease payments | 1,731 |
Less imputed interest | (131) |
Total lease liabilities | 1,600 |
Finance lease [Member] | |
Schedule of Maturities of Operating and Finance Lease Liabilities Abstract] | |
Remaining 2022 | 163 |
2023 | 194 |
2024 | 92 |
2025 | 50 |
2026 | 16 |
Total minimum lease payments | 515 |
Less imputed interest | (58) |
Total lease liabilities | $ 457 |
Related Parties (Details)
Related Parties (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Related Parties [Abstract] | |
Down payment on inventory orders | $ 384 |
Related Parties (Details) - Sch
Related Parties (Details) - Schedule of Net Purchasing (Sales) Activity - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Bluezone [Member] | |||
Related Party Transaction [Line Items] | |||
Net purchase | $ 5 | ||
4D Bios [Member] | |||
Related Party Transaction [Line Items] | |||
Net purchase | [1] | 447 | |
Cannae Policy Group [Member] | |||
Related Party Transaction [Line Items] | |||
Net purchase | 25 | ||
Topline Performance Group [Member] | |||
Related Party Transaction [Line Items] | |||
Net purchase | 32 | ||
NEIA [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | (634) | (5,460) | |
Greenstone Holdings [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | (637) | ||
Valiant Americas, LLC. [Member] | |||
Related Party Transaction [Line Items] | |||
Net purchase | 4,951 | 1,077 | |
Living Green Farm [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ (58) | ||
[1] Purchases from 4D Bios for the three months ended March 31, 2021 include $384 thousand for a down payment on inventory orders. |
Related Parties (Details) - S_2
Related Parties (Details) - Schedule of Net Related Party (Payable) Receivable - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Cannae Policy Group [Member] | ||
Related Parties (Details) - Schedule of Net Related Party (Payable) Receivable [Line Items] | ||
Related party (payable) | $ (8) | |
Cannaquip [Member] | ||
Related Parties (Details) - Schedule of Net Related Party (Payable) Receivable [Line Items] | ||
Accounts payable related parties | (21) | (21) |
Greenstone Holdings [Member] | ||
Related Parties (Details) - Schedule of Net Related Party (Payable) Receivable [Line Items] | ||
Related party (payable) | 12,446 | 11,177 |
Living Greens Farm [Member] | ||
Related Parties (Details) - Schedule of Net Related Party (Payable) Receivable [Line Items] | ||
Related party (payable) | 34 | 34 |
NEIA [Member] | ||
Related Parties (Details) - Schedule of Net Related Party (Payable) Receivable [Line Items] | ||
Related party (payable) | 1,344 | 3,500 |
Valiant Americas, LLC. [Member] | ||
Related Parties (Details) - Schedule of Net Related Party (Payable) Receivable [Line Items] | ||
Related party (payable) | $ (922) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||||
Nov. 07, 2022 | Oct. 14, 2022 | Oct. 04, 2022 | Feb. 19, 2021 | Mar. 31, 2022 | Sep. 30, 2022 | Aug. 19, 2025 | Apr. 26, 2023 | Mar. 01, 2023 | Feb. 22, 2023 | Dec. 31, 2021 | |
Subsequent Events (Details) [Line Items] | |||||||||||
Contingent loss | $ 14.7 | ||||||||||
Notes receivable | $ 5,300,000 | ||||||||||
Shares of Common Stock (in Shares) | 27,778 | ||||||||||
Net proceeds | 80,000,000 | ||||||||||
Per share (in Dollars per share) | $ 2,700 | ||||||||||
Common Stock | |||||||||||
Common stock shares (in Shares) | 8,903,927 | 200,000,000 | |||||||||
Authorized shares (in Shares) | 203,000,000 | ||||||||||
Principal amount | $ 10,300,000 | ||||||||||
Remaining principal amount | 10,000,000 | ||||||||||
Original principal amount | 10,000,000 | $ 35,000,000 | |||||||||
Outstanding principal amount | $ 2,000,000 | ||||||||||
Percentage of common stock | 4.99% | ||||||||||
Investor lend up amount | $ 500,000 | ||||||||||
Bears interest rate of percentage | 10% | ||||||||||
Description extend lease agreement | the Company extended its lease by three years until March 31, 2026, for the premises located at 2468 Industrial Row Dr., Troy, Michigan 48084.As of May 23, 2023, the Company extended its lease by three years until July 31, 2026, for the premises located at 2625 S. Santa Fe Dr., Bldg. 1, Units 1H and 1IJ. | ||||||||||
Forecast [Member] | |||||||||||
Subsequent Events (Details) [Line Items] | |||||||||||
Receivable outstanding | $ 14.7 | ||||||||||
Shares of Common Stock (in Shares) | 306,628 | 105,544 | |||||||||
Average price per share (in Dollars per share) | $ 50.8 | ||||||||||
Gross proceeds | $ 15,600,000 | ||||||||||
Net proceeds | 15,100,000 | ||||||||||
Commission fees | 468,000 | ||||||||||
Proceeds under atm program | $ 3,100,000 | ||||||||||
Per share (in Dollars per share) | $ 1 | ||||||||||
Minimum per share (in Shares) | 1 | ||||||||||
Common Stock | $ 1 | ||||||||||
Nonpayment amount | $ 7,000,000 | ||||||||||
Common stock shares (in Shares) | 100,000,000 | ||||||||||
Authorized shares (in Shares) | 103,000,000 | ||||||||||
Interest rate percentage | 9% |