Agrify Corporation

Nature’s Miracle, Agrify call off $6.4M merger deal

Published

7 months ago

May 20, 2024

For cash-strapped Agrify, the merger had been seen as providing a potential lifeline.

Nature’s Miracle Holding Inc. (NASDAQ: NMHI) and Agrify Corporation (Nasdaq: AGFY) have mutually agreed to terminate their previously announced merger plan, the companies said Monday, citing unfriendly market conditions.

The all-stock deal would have seen Ontario, Calif.-based Nature’s Miracle acquire its smaller rival Agrify at an equity valuation of roughly $6.4 million. The terminations won’t result in any fees for either party.

In a statement, Nature’s Miracle Chairman and CEO James Li said the decision to scrap the merger was made in the best interest of shareholders and the “long-term value” of the business given the “current unfavorable market environment.” The companies have executed termination agreements with respect to the merger deal and purchase of outstanding debt, with no cancellation fees for either party.

“At Nature’s Miracle, we will continue to focus on our core indoor growing products including grow light, dehumidifier and container growing systems where we are seeing strong momentum,” Li said.

The called-off deal comes just a week after the companies had nailed down plans to join forces, hoping to unite their complementary controlled-environment agriculture offerings. Nature’s Miracle sells products including horticultural lighting and irrigation systems, while Agrify makes vertical farming units and extraction equipment for the cannabis industry.

For struggling Agrify, which ended 2023 with an accumulated deficit of around $265.8 million, the combination had appeared to offer a potential lifeline. The now-scuttled merger agreement would have seen Agrify shareholders own about 30% of the combined company.

Li said management appreciated the cooperation from Agrify’s team in reaching the mutual decision to terminate the planned tie-up.

“Agrify continues to see strong momentum and pipeline growth quarter over quarter in both cultivation and extraction business divisions,” Agrify CEO Raymond Chang said in a separate statement. “We believe that it is in Agrify’s best interest to stay the course and continue to execute. Agrify’s management team and board are committed to continuing to explore all strategic options in order to create the highest shareholder value.”

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Author: mscannabiz.com

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Agrify Corporation

GTI’s Ben Kovler takes over Agrify following financing deal

Published

2 months ago

November 5, 2024

mscannabiz.com

The board of directors for Agrify Corp. (Nasdaq: AGFY) approved a $20 million convertible secured note, of which $10 million will be drawn upon at closing, from a wholly-owned subsidiary of Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF).

Before this financing, the Green Thumb subsidiary acquired an ownership stake in Agrify through the purchase of common stock and warrants from its outgoing Chairman and CEO Raymond Chang and outgoing Director I-Tseng Jenny Chan, the company said.

Kovler takes over

As part of the deal, Chang resigned as chairman and CEO and Chan stepped down from the board.

GTI’s CEO Benjamin Kovler, Richard Drexler and Armon Vakili were named to replace the outgoing directors, bringing the total board membership to six, the majority of whom are independent. Kovler was also appointed to the roles of Agrify’s chairman and interim CEO following Chang’s resignation.

“We believe Green Thumb’s financial investment and the new Directors’ experience can help Agrify unlock its untapped potential,” Kovler said. “… Given Green Thumb’s thoughtful and prudent approach to capital allocation, we see significant opportunity ahead to assist in the creation of value for shareholders via Agrify’s non-plant touching assets.”

Kovler recently announced that he had received an award of 750,000 shares of restricted GTI stock and a $300,000 cash bonus. The board also increased Kovler’s annual cash bonus targets from 250% of his base salary to 325%. With GTI stock trading at roughly $10.68, the stock bonus is worth approximately $8 million.

Drexler has more than 40 years of experience in corporate leadership roles as well as serving on several public company boards and audit committees. Vakili currently serves as vice president of strategic initiatives and partnerships at Green Thumb and has more than a decade of experience in corporate affairs, mergers and acquisitions, private equity and finance.

Troubled company

Agrify has been a troubled company, and as of June 30, it had approximately $100,000 of cash, cash equivalents and restricted cash. At the end of 2023, it had an accumulated deficit of approximately $265.8 million.

The company has also been fighting to retain its share listing on the Nasdaq exchange, including engaging in a 1-for-15 reverse stock split in October.

Social media chatter has speculated that GTI could be angling itself for a Nasdaq listing by engaging in this transaction. The company hinted at major stock exchange aspirations with its previous conversations around a potential deal with The Boston Beer Company (NYSE: SAMS).

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