EX-99.2 4 ea022680201ex99-2_agrify.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Exhibit 99.2

 

Agrify Corporation

Pro Forma Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share amounts)

 

   Year Ended December 31, 2023 
   Historical
Agrify
(as reported)		   Discontinued
Operations
of
Cultivation
Business
(F)		   Pro Forma
Adjustments
(G)		   Notes  Pro Forma
Agrify		 
                    
Revenue  $16,868   $(1,726)   -      $15,142 
Cost of goods sold   11,590    (466)   -       11,124 
Gross profit   5,278    (1,260)   -       4,018 
                        
Selling, general and administrative, and research and development   25,434    (7,082)   362   (J)   18,714 
Change in contingent consideration   (1,322)   -    -       (1,322)
Gain on disposal of property and equipment   144    (132)   -       12 
Total operating expenses   24,256    (7,214)   362       17,404 
Loss from operations   (18,978)   5,954    (362)      (13,386)
Interest expense, net   (1,853)   (292)   2,159   (H)   14 
Change in fair value of warrant liabilities   4,695    -    -       4,695 
Loss on extinguishment of long-term debt, net   (4,311)   -    -       (4,311)
Other income, net   1,799    (441)   -       1,358 
Total other income, net   330    (733)   2,159       1,756 
Net loss before income taxes   (18,648)   5,221    1,797       (11,630)
Income tax expense   (2)   -    -       (2)
Net loss   (18,650)   5,221    1,797       (11,632)
Income attributable to non-controlling interest   1    -    -       1 
Net loss attributable to Agrify Corporation  $(18,649)  $5,221    1,797      $(11,631)
                        
Net loss per common share                       
                        
Basic and Diluted earnings per common share  $(187.63)            (I)  $(117.02)
                        
Weighted average shares outstanding                       
                        
Basic and Diluted weighted average common shares outstanding   99,391             (I)   99,391 

 

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

 

 

 

 

Agrify Corporation

Pro Forma Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share amounts)

 

   Nine Months Ended September 30, 2024 
   Historical
Agrify
(as reported)		   Discontinued
Operations
of
Cultivation
Business
(F)		   Pro Forma
Adjustments
(G)		   Notes  Pro Forma
Agrify		 
Revenue  $7,526   $(188)   -      $7,338 
Cost of goods sold   6,009    (1,106)   -       4,903 
Gross profit   1,517    918    -       2,435 
                        
Selling, general and administrative, and research and development   11,558    (3,179)   -       8,379 
Gain on settlement of contingent liabilities   (5,935)   5,935    -       - 
Gain on early termination of lease   (39)   39    -       - 
Loss on disposal of property and equipment   1    -    -       1 
Change in contingent consideration   (2,180)   -    -       (2,180)
Total operating expenses   3,405    2,795    -       6,200 
Operating loss   (1,888)   (1,877)   -       (3,765)
                        
Interest expense, net   (166)   (47)   200   (H)   (13)
Change in fair value of warrant liabilities   (15,502)   -    -       (15,502)
Other income   169    (150)   -       19 
Total other income (expense), net   (15,499)   (197)   200       (15,496)
Net loss   (17,387)   (2,074)   200       (19,261)
Loss attributable to non-controlling interest   -    -    -       - 
Net loss attributable to Agrify Corporation  $(17,387)  $(2,074)   200      $(19,261)
                        
Net loss per common share                       
                        
Basic and Diluted earnings per common share  $(16.82)            (I)  $(18.63)
                        
Weighted average shares outstanding                       
                        
Basic and Diluted weighted average common shares outstanding   1,033,582             (I)   1,033,582 

 

See accompanying notes to unaudited pro forma consolidated combined financial statements.

 

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Agrify Corporation

Pro Forma Condensed Consolidated Balance Sheet

(Unaudited)

(In thousands, except share amounts)

 

   As of September 30, 2024 
   Historical
Agrify
(as reported)		   Sale of
Cultivation
Business
(A)		   Notes  Pro Forma
Adjustments
(C)		   Notes  Pro Forma
Agrify		 
                       
Assets                      
Current assets:                      
Cash and cash equivalents  $263   $-      $(177)  (B)  $86 
Marketable securities   4    -       -       4 
Accounts receivable, net   328    (95)      -       233 
Inventories, net   18,085    (13,541)      -       4,544 
Loans receivable, current   1,680    (1,680)      -       - 
Prepaid expenses and other current assets   410    -       -       410 
Total current assets   20,770    (15,316)      (177)     $5,277 
Loans receivable, net of allowance for credit losses   9,903    (9,903)      -       - 
Property and equipment, net   6,596    (6,314)      -       282 
Operating lease right-of-use assets   1,573    (846)      -       727 
Other non-current assets   110    (70)      -       40 
Total assets  $38,952   $(32,449)     $(177)     $6,326 
                           
Liabilities and stockholders’ equity (deficit)                          
Current Liabilities:                          
Accounts payable   12,034    (8,195)      -       3,839 
Accrued expenses and other liabilities   7,473    (1,749)      1,685   (B)   7,409 
Operating lease liabilities, current   666    (327)      -       339 
Long-term debt, current   525    -       -       525 
Related party debt, current   2,344    -       (2,344)  (D)   - 
Contract liabilities   4,724    (916)      -       3,808 
Total current liabilities   27,766    (11,187)      (659)      15,920 
Warrant liabilities   277    -       -       277 
Operating lease liabilities, net of current   1,090    (656)      -       434 
Related party debt, net of current   4,360    -       (4,360)  (D)   - 
Long-term debt, net of current   2    -       -       2 
Total liabilities   33,495    (11,843)      (5,019)      16,633 
                           
Commitments and contingencies                          
                           
Stockholders’ equity (deficit)                          
Common Stock, $0.001 par value per share, 35,000,000 shares authorized and 1,331,823 shares issued and outstanding at September 30, 2024   1    -       -       1 
Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized and no shares issued or outstanding at September 30, 2024   -    -       -       - 
Preferred A Stock, $0.001 par value per share, 105,000 authorized and no shares issued or outstanding   -    -       -       - 
Additional paid-in-capital   288,410    (133)      (1,554)  (E)   286,723 
Accumulated deficit   (283,184)   (20,473)  (C)   6,396       (297,261)
Total stockholder’s equity (deficit) attributable to Agrify   5,227    (20,606)              (10,537)
Non-controlling interests   230                    230 
Total stockholders’ equity (deficit)   5,457    (20,606)      4,842       (10,307)
                           
Total liabilities and stockholders’ equity (deficit)  $38,952   $(32,449)     $(177)     $6,326 

 

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

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Agrify Corporation

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

(In thousands)

 

The unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2024, and the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024 and for the years ended December 31, 2023 and December 31, 2022, include the following adjustments:

 

(A)Reflects the sale of the Cultivation Business pursuant to the Asset Purchase Agreement, inclusive of liabilities transferred as if the transaction had occurred on September 30, 2024.

 

(B)Pursuant to the Cultivation Business Asset Purchase Agreement, the Company was required to fund certain obligations at closing while no cash consideration was received from the sale.

 

(C)Estimated loss on the sale of the Cultivation Business, assuming Agrify completed the sale as of September 30, 2024, is as follows:

 

Forgiveness of debt  $6,704 
Litigation reserve and other cash funding obligations   (1,862)
Net assets sold (inclusive of liabilities assumed)   (20,606)
Pre-tax loss on sale   (15,764)
Estimated tax expense   - 
Estimated after-tax loss on sale   (15,764)

 

For purposes of the unaudited pro forma condensed consolidated balance sheet, the estimated loss recognized in accumulated deficit is based on net carrying value of the Cultivation business as of September 30, 2024 rather than as of the Closing Date of the transaction. As a result, the estimated loss reflected herein may differ materially from the actual loss on the sale of the Cultivation Business as of the Closing Date because of the difference in the carrying value of assets and liabilities at the Closing Date.

 

(D)Debt held by Buyer and forgiven as consideration for the purchase of the Cultivation Business.

 

(E)Warrants cancelled in conjunction with the Transaction.

 

(F)Reflects the reclassification of the operations of the Cultivation Business as a discontinued operation in accordance with ASC 205-20. The Cultivation Business results were adjusted to include costs directly attributed to and the estimated portion of shared expenses related to the Cultivation Business for each period.

 

(G)Reflects additional Pro Forma adjustments which show how the Cultivation Business Sale may have affected Agrify’s historical consolidated statements of operations as if it occurred January 1, 2023.

 

(H)Interest expense on Debt held by Buyer and forgiven as consideration for the purchase of the Cultivation Business.

 

(I)Periods presented have been adjusted to retroactively reflect the 1-for-20 reverse stock split on July 5, 2023, and for the 1-for-15 reverse stock split on October 8, 2024. Additional information regarding reverse stock splits may be found in Note 1 – Overview, Basis of Presentation, and Significant Accounting Policies of the Company’s Form 10-Q for the quarterly period ended September 30, 2024 filed with the SEC on November 14, 2024.

 

(J)Expenses incurred as a result of the Transaction, inclusive of severance, lease settlement and fairness opinion.

 

 

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