NASDAQ-Traded Cannabis Co. Agrify Secures $25.9M Via Private Placement, Here's How They'll Spend It

Agrify Corporation AGFY announced Thursday that is has secured a $25.9 million non-brokered private placement.

What Happened

The company said it has entered into securities purchase agreements with institutional and accredited investors in a non-brokered private placement priced at $22.30 per share.

The placement is set to close on Thursday, Nov. 21, subject to customary closing conditions.

Benjamin Kovler, chairman and interim CEO, participated in the private placement to purchase 10,000 shares of common stock at $38.76.

The news comes on the heels of the company's board of directors having approved a $20 million convertible secured note. Of that sum $10 million will be drawn upon at closing, from a wholly-owned subsidiary of Green Thumb Industries Inc., Agrify said in a press release.

Before this, 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.

Read Also: Cannabis Cultivation Solutions Provider Agrify And California’s Nature’s Miracle Sign Definitive Merger Deal

Why It Matters

Agrify plans to use the proceeds from the private placement for general corporate purposes, including, among other things, working capital and business development. It intends to allocate capital to opportunities in the cannabis and hemp industries.

"This funding is a strong move for Agrify and our shareholders as we were able to raise approximately $26 million in a non-brokered deal (gross equals net)," Kovler said. "We plan to allocate this capital into opportunities within our circle of competence to benefit stockholders. We are excited about the opportunity set and current consumer trends in cannabis and hemp. The team continues to work hard to close the previously announced Señorita transaction, and it remains on track for closing at or around year-end."

Agrify reported its third quarter 2024 financial results on Nov. 14, revealing a $1.9 million revenue, down from $3.1 million a year ago. The company posted a net loss of $18.6 million, largely driven by a $15 million change in the fair value of warrant liabilities.

AGFY Price Action

Agrify's shares traded 25.15% lower at $29.01 per share at the time of writing on Thursday.

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