Shares of Michigan’s Agrify Corp (NASDAQ: AGFY) were up by over 40 per cent Tuesday after the cannabis industry operator secured new capital and re-arranged its leadership roster. Headquartered in the city of Troy, the company provides agricultural solutions and grow tech to cultivators.
Agrify has secured a US$20-million-dollar investment from the renowned market player Green Thumb Industries Inc (OTCMKTS: GTBIF) by way of a convertible secured note. This type of financing is backed by collateral in the form of property or assets. Agrify will draw upon half of the sum once the deal closes.
In tandem with the new financing, Agrify’s CEO Raymond Chang and Director I-Tseng Jenny Chan have stepped down. The two sold Agrify shares they held to an unnamed Green Thumb subsidiary on their way out.
This move, combined with the fact that Green Thumb chief executive Ben Kovler will be stepping in as interim CEO for Agrify, have fuelled speculation among industry observers. Kovler will be joined by Green Thumb representatives Richard Drexler and Armon Vakil, who will join Agrify’s Board of Directors.
“This is great news for Agrify at a time when the company needed a capital infusion,” Agrify board member Krishnan Varier said in a news release.
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Agrify struggles for Nasdaq compliance; completes reverse stock split
The marijuana-agriculture and extraction specialist has been troubled in recent days. It has been struggling to maintain compliance with the Nasdaq Exchange’s criteria due to late SEC filings, accounting errors and other issues.
Agrify completed a 1-for-15 reverse stock split last month to drive up its share price. Speculation that the stock may fall below the US$1.00 minimum requirement on the exchange in the near future likely contributed to this decision.
The company also converted US$13.8 million of debt into equity in May this year to help address Nasdaq compliance issues.
“The $13.8 million debt-to-equity conversion is a very significant commitment from the management and the leading shareholders to ensure the ongoing Nasdaq listing,” Chang said at the time.
After reading the PR again and reading between the lines this feels like $GTBIF just bought a Nasdaq shell with this Agrify deal.
— Anthony Varrell (@V_arrell) November 5, 2024
Green Thumb recently opened its 20th RISE Dispensary in the state of Florida.
It will be holding a conference call about its Q3 earnings on Nov. 7.
rowan@mugglehead.com
