Agrify secures $135 million credit facility

Agrify

Strengthens the balance sheet and enables Agrify to continue to accelerate its growth

BILLERICA, Mass., March 14, 2022 (GLOBE NEWSWIRE) — Agrify Corporation (Nasdaq: AGFY) (“Agrify” or the “Company”), the most innovative provider of premium cultivation and extraction solutions for the cannabis and hemp industry, today announced that it has entered into a debt financing agreement of up to $135 million in a senior secured note facility (the “Note”) with an institutional lender ( the lender “). Proceeds will be used for working capital and general corporate purposes.

Initial funding of $65 million under the note will be immediately available to the company upon an initial closing, with the option for the company to draw the remaining $70 million available in two subsequent $35 million financings. each, subject to the satisfaction of certain financing conditions.

“We continue to see tremendous interest and enthusiasm for Agrify’s Turnkey Solutions (TTK) program, which is the primary driver behind us, having over $500 million in carefully vetted sales opportunities in our total qualified pipeline,” said Raymond Chang, President. and CEO of Agrify. “This credit facility further validates our TTK program and provides us with immediate balance sheet leverage to fund our continued growth. As we build additional TTK partnerships, we believe our high-margin recurring production and SaaS revenue streams will provide us with increased financial leverage, allowing us to create more meaningful, long-term value for our shareholders.

AGP/Alliance Global Partners is acting as sole placement agent for the financing, and Burns & Levinson LLP is acting as legal counsel to the Company.

Terms of trade

The Note will mature on March 1, 2026 (the “Maturity Date”) and will contain an annualized coupon of 6.75% payable quarterly, in cash, beginning February 1, 2023. After the first anniversary of the issuance of the note, the Company may, instead of paying the interest in cash, pay such interest in kind, in which case the interest on the Note will be calculated at the rate of 8.75% per annum and will be added to the principal amount of the Note. In addition, the Company will be required to make amortization payments equal to 4.0% of the original principal amount of the note on the first day of each calendar month commencing February 1, 2023 and continuing until the maturity date. .

At the time of the initial financing, the Company will issue to the Lender warrants with a term of 5.5 years, exercisable for a number of shares equal to 65% of the amount of the financing divided by the closing price of the share. the trading day preceding the date of the definitive agreement. The initial warrants will have an exercise price equal to $6.75, or 110% of the closing share price on the trading day immediately preceding the signing of the definitive agreement. For each subsequent financing, the Company will similarly issue warrants to the lender with a term of 5.5 years, exercisable for a number of shares equal to 65% of the financing amount divided by the closing price of share on the trading day preceding such subsequent financing. . Each warrant issued in a subsequent financing will have an exercise price equal to 110% of the closing price of the Company’s shares on the day preceding the date of such financing.

At any time after the first anniversary of the issue of the note, the Company may prepay the entirety of the note by redemption at a price equal to 106.75% of the principal amount then unpaid under the note, plus accrued interest but unpaid. The Lender will also have the option of requiring the Company to repay the Note if the Company experiences a Fundamental Change at a price equal to 107% of the principal amount then unpaid under the Note, plus any accrued interest thereon. this.

The Note will impose upon the Company certain customary affirmative and negative covenants. In addition, if an Event of Default under the Note occurs, the Lender may elect to repay the Note for cash equal to 115% of the then outstanding principal amount of the Note (or such lesser principal amount accelerated by the Lender) plus accrued and unpaid interest.

Until the date on which the Note is fully repaid, the Lender shall, subject to certain exceptions, be entitled to participate in up to 30% of any debt, preferred stock or equity related financing of the Company or its subsidiaries.

The securities to be issued to the lender will not be registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from these registration requirements. . The Definitive Agreement requires the Company to file resale registration statements with respect to the shares underlying the Warrants as soon as practicable and in any event within 45 days of the initial closing and any subsequent closing.

The Warrants will include a limit such that the Lender’s beneficial ownership will not exceed 4.99% of the Company’s shares outstanding at the time of exercise (which percentage may be decreased or increased by the Lender subject to the terms of the warrants, but not to exceed 9.99%).

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities that are the subject of the offer. There will be no sale of the securities described herein in any state or jurisdiction in which such offer, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About the Agrify TTK Solution

The Agrify TTK Solution is a one-of-a-kind program where Agrify partners with qualified cannabis and hemp growers in the early stages of their business plans and provides essential support over a 10-year period, which includes : access to capital, design and construction of their cultivation and extraction facilities, state-of-the-art cultivation and extraction equipment, process design, training, implementation, data analysis and consumer branding .

To date, the Company has contractual commitments for over 3,000 vertical farming units that will be powered by Agrify Insights SaaS cultivation software along with the value-added services mentioned above. Cumulatively, all 10-year agreements under Agrify’s TTK Solution program are currently expected to generate total estimated revenue of $850 million.

About Agfy (Nasdaq:AGFY)

Agrify is the most innovative provider of premium cultivation and extraction solutions for the cannabis and hemp industry. Our micro-environmentally controlled Vertical Farm Units (VFUs) enable our customers to produce the highest quality products with unparalleled consistency, yield and return on investment at scale. Agrify brings data, science and technology to its customers for unparalleled control over cultivation and extraction. For more information, please visit Agrify at http://www.agrify.com.

Forward-looking statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Agrify and other matters. All statements in this press release that do not relate to historical facts should be considered forward-looking statements, including, without limitation, statements regarding the Agrify TTK solution, expected revenues from any transaction of the Agrify TTK Solution, project timelines, Agrify’s ability to provide solutions and services, and satisfaction of closing conditions and ability to close in accordance with the Ticket Facility. In some instances, you can identify forward-looking statements by words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “could”, ” intends”, “aims”, “plans”, “intends”, “believes”, “estimates”, “predicts”, “potential” or “continues” or the negative form of these terms or other expressions The forward-looking statements contained in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections regarding future events and financial trends that we believe may affect our business, our financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to differ materially from the results, performance or such or future achievements expressed or implied by the forward-looking statements. You should carefully consider the risks and uncertainties affecting our business, including those described in our filings with the Securities and Exchange Commission (“SEC”), including under the heading “Risk Factors” in our annual report on form 10-K filed for the fiscal year ended December 31, 2020 with the SEC, which may be obtained on the SEC’s website at www.sec.gov. These forward-looking statements speak only as of the date of this communication. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are, however, advised to review any other disclosures we make on related matters in our public announcements and our filings with the SEC.

Company details

Agrify
Timothy Oakes
Financial director
[email protected]
(781) 760-7512

Investor Relations
Anna Kate Heller
RIC
[email protected]

Media
Ellen Melody
MATTIO Communications
[email protected]

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