Forafric Global PLC 6-K, filed Dec 16, 2022

Forafric Global PLC (AFRI)

6-K 2022-12-16 For: 2022-12-16

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Added on April 07, 2026

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Forafric Global PLC filed this 6-K on December 16, 2022.

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Exhibit		Description
99.1		Unaudited Interim Consolidated Financial Statements as of June 30, 2022 and for the Six Months Ended June 30, 2022 and 2021
99.2		Operating and Financial Review and Prospects in Connection with the Interim Consolidated Financial Statements for the Six Months Ended June 30, 2022 and 2021
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

	Forafric Global PLC

Date: December 16, 2022	By:	/s/ Saad Bendidi
	Name:	Saad Bendidi
	Title:	Chairman and Director
		(Principal Executive Officer)

		Page(s)


Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets		3

Condensed Consolidated Statements of Operations and Comprehensive Loss		4

Condensed Consolidated Statements of Changes in Stockholders’ Equity		5

Condensed Consolidated Statements of Cash Flows		6

Notes to Condensed Consolidated Financial Statements		7-29

	June 30,			December 31,
	2022			2021
	UNAUDITED			AUDITED
ASSETS
Current assets:
Cash and cash equivalents	$	20,696		$	14,393
Restricted cash		15,600			-
Accounts receivable, net of allowance for credit losses of $14,904 and $15,737, respectively		28,770			32,313
Amount due from related parties		955			898
Other receivables		49,649			32,022
Inventories, net		55,754			37,563
Other assets, current		319			359
Total current assets		171,743			117,548
Property, plant, and equipment, net		101,075			109,476
Right-of-use assets		14,482			16,359
Goodwill		46,961			51,571
Intangible assets, net		3,667			3,975
Other assets, noncurrent		2,194			973
Total assets	$	340,122		$	299,902

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Lines of credit – working capital	$	50,843		$	79,504
Lines of credit – wheat inventories		126,506			70,361
Accounts payable		35,912			26,196
Accrued expenses		26,742			13,062
Contract liabilities		1,720			1,910
Current portion of long-term debt		6,681			10,845
Forward share purchase agreements derivative liability		5,087			-
Contingent consideration liability		1,311			-
Other liabilities, current		1,578			1,019
Total current liabilities		256,380			202,897
Long-term debt		9,616			14,129
Loan from related party		166			1,234
Stockholder loans		-			15,269
Deferred tax liabilities		17,254			18,721
Total liabilities		283,416			252,250

Stockholders’ equity:
Preferred Shares; $0.001 par value; 1,000,000 authorized, — and — issued and outstanding, at June 30, 2022 and December 31, 2021, respectively		-			-
Ordinary shares, $0.001 par value; 100,000,000 authorized; 26,811,650 and 20,910,600 issued and outstanding at June 30, 2022 and December 31, 2021, respectively		27			21
Class Z ordinary shares, $0.001 par value; 30,000,000 authorized; — and — issued and outstanding, at June 30, 2022 and December 31, 2021, respectively		-			-
Additional paid-in capital		143,909			119,979
Accumulated deficit		(91,795	)		(83,550	)
Accumulated other comprehensive (loss) income		(2,201	)		3,685
Non-controlling interest		6,766			7,517
Total Stockholders’ equity		56,706			47,652
Total liabilities and Stockholders’ equity	$	340,122		$	299,902

	Six months ended
	June 30,			June 30,
	2022			2021

Revenues	$	154,992		$	120,985
Cost of sales		139,881			104,869
Gross profit		15,111			16,116
Selling, general and administrative expenses		14,696			10,870
Total operating expenses		14,696			10,870
Operating income		415			5,246
Other expense (income):
Interest income		-			(269	)
Interest expense		4,857			3,431
Change in fair value of derivatives and contingent consideration		405			-
Foreign Exchange loss		1,913			906
Total other expense		7,175			4,068
(Loss) income before taxes		(6,760	)		1,178
Income tax expense		1,605			1,222
Net loss		(8,365	)		(44	)
Net (loss) income attributable to noncontrolling interest		(120	)		205
Net loss attributable to the Company	$	(8,245	)	$	(249	)

Loss per common shares outstanding – basic and diluted	$	(0.39	)	$	(0.00	)

Weighted average number of shares outstanding - basic and diluted		21,566,289			20,910,600

Net loss		(8,365	)		(44	)
Other comprehensive loss net of tax:
Foreign currency translation adjustments		(6,517	)		(240	)
Total other comprehensive loss		(6,517	)		(240	)
Comprehensive loss		(14,882	)		(284	)
less: Comprehensive (loss) income attributable to non-controlling interest		(751	)		157
Comprehensive loss attributable to the Company	$	(14,131	)	$	(441	)

													Accumulated
							Additional						Other			Non-			Total
	Common Stock						paid-in			Accumulated			Comprehensive			Controlling			Stockholders’
	Shares			Amount			capital			Deficit			Income (Loss)			Interest			Equity

Balance, December 31, 2020		120,000,000		$	120,000		$	-		$	(74,397	)	$	6,309		$	82		$	51,994
Retroactive adjustment to reflect recapitalization		(99,089,400	)		(119,979	)		119,979			-			-			-			-
Balance, December 31, 2020 - adjusted		20,910,600		$	21		$	119,979		$	(74,397	)	$	6,309		$	82		$	51,994
Net (loss) income		-			-			-			(249	)		-			205			(44	)
Foreign exchange loss		-			-			-			-			(192	)		(48	)		(240	)
Consolidation of variable interest entities		-			-			-			-			-			4,037			4,037
Balance, June 30, 2021		20,910,600			21			119,979			(74,646	)		6,117			4,276			55,747

Balance, December 31, 2021		120,000,000		$	120,000		$	-		$	(83,550	)	$	3,685		$	7,517		$	47,652
Retroactive adjustment to reflect recapitalization		(99,089,400	)	$	(119,979	)	$	119,979			-			-			-			-
Balance, December 31, 2021 - adjusted		20,910,600		$	21		$	119,979		$	(83,550	)	$	3,685		$	7,517		$	47,652
Merger and recapitalization		1,445,160			2			6,125			-			-			-			6,127
Derivative liability for forward purchase agreement		-			-			(4,685	)		-			-			-			(4,685	)
Issuance of ordinary shares upon exercise of warrants		1,887,460			2			19,439			-			-			-			19,441
Shares issued in PIPE		1,320,000			1			13,861			-			-			-			13,862
Shares issued on convertible bonds		1,248,430			1			11,796			-			-			-			11,797
Consideration payable to selling stockholders		-			-			(20,000	)		-			-			-			(20,000	)
Transaction costs		-			-			(2,606	)		-			-			-			(2,606	)
Net loss		-			-			-			(8,245	)		-			(120	)		(8,365	)
Foreign exchange loss		-			-			-			-			(5,886	)		(631	)		(6,517	)
Balance, June 30, 2022		26,811,650			27			143,909			(91,795	)		(2,201	)		6,766			56,706

FAHL existing shares at closing date			120,000,000
FAHL existing shares at closing date - converted			20,910,600

Issuance of common stock upon exercise of warrants			1,887,460
Shares issued in PIPE			1,320,000
Shares issued on convertible bonds			1,248,430
Conversion of shareholders loans			1,445,160
Total recapitalization			5,901,050
Total shares outstanding as of June 30, 2022			26,811,650

Amount in Globis trust account at closing	$	118,450
Cash paid to redeeming shareholders		(99,009	)
Amount available after paying redeeming stockholders		19,441
Cash to escrow for Forward Share Purchase Agreements		(16,200	)
Transfer of cash not redeemed		(3,241	)
Remaining balance	$	-

	-	Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

	-	Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

	-	Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

	Balance Sheet	June 30,		December 31,
	Classification	2022		2021
		(in thousands)
Assets
Operating leases	Right-of-use assets	$	1,659	$	2,077
Finance leases	Right-of-use assets		12,823		14,282
Total assets		$	14,482	$	16,359

Liabilities
Current liabilities
Operating leases	Current portion of long-term debt	$	650	$	685
Finance leases	Current portion of long-term debt		2,117		2,318
Total current liabilities			2,767		3,003
Noncurrent liabilities
Operating leases	Long-term debt		1,108		1,529
Finance leases	Long-term debt		1,639		2,923
Total noncurrent liabilities			2,747		4,452
Total liabilities		$	5,514	$	7,455

	June 30,	December 31,
	2022	2021
Operating leases	6.4 years	6.6 years
Finance leases	1.5 years	2.0 years

	Allowance for
	Accounts Receivable
	(in thousands)
Balance at December 31, 2020		(13,532	)
Current period provision for expected credit losses		(2,794	)
Foreign currency exchange adjustments		589
Balance at December 31, 2021	$	(15,737	)
Current period provision for expected credit losses		(616	)
Foreign currency exchange adjustments		1,449
Balance at June 30, 2022	$	(14,904	)

	-	Tria Group and Maymouna Food Group acquired in 2015,
	-	Sanabil SA, MDS Burkina and MDS Mali acquired in 2021.

	Soft			Durum			Couscous
	Wheat			Wheat			and Pasta			Total
	(in thousands)
Balance at December 31, 2020	$	31,058		$	7,641		$	9,373		$	48,072
Business combinations		5,607			-			-			5,607
Foreign currency exchange adjustments		(1,471	)		(286	)		(351	)		(2,108	)
Balance at December 31, 2021	$	35,194		$	7,355		$	9,022		$	51,571
Foreign currency exchange adjustments		(3,132	)		(664	)		(814	)		(4,610	)
Balance at June 30, 2022	$	32,062		$	6,691		$	8,208		$	46,961

	Intangible
	Assets
	(in thousands)
Balance at December 31, 2020	$	363
Acquisitions		3,915
Amortization		(111	)
Foreign currency exchange adjustments		(192	)
Balance at December 31, 2021	$	3,975
Acquisitions		118
Amortization		(55	)
Foreign currency exchange adjustments		(371	)
Balance at June 30, 2022	$	3,667

	Operating Leases			Finance Leases
	(in thousands)
Remainder of 2022	$	399		$	1,241
2023		690			2,205
2024		203			456
2025		91			-
2026		71			-
Thereafter		637			-
Total lease payments		2,091			3,902
Less: Interest		(333	)		(146	)
Present value of lease liabilities	$	1,758		$	3,756

	June 30,		December 31,
	2022		2021
	(in thousands)
Government subsidies	$	35,997	$	18,824
Value-added tax receivable		3,394		3,916
Advances to suppliers		3,049		1,362
Prepaid expenses		3,877		2,712
Other receivables		3,332		5,208
Total	$	49,649	$	32,022

	June 30,			December 31,
	2022			2021
	(in thousands)
Merchandise	$	20,934		$	9,244
Raw materials and consumable supplies		28,851			24,409
Finished products		6,982			5,024
Inventory reserve		(1,013	)		(1,114	)
Total	$	55,754		$	37,563

	June 30,			December 31,
	2022			2021
	(in thousands)
Land	$	22,793		$	25,139
Buildings		55,174			60,384
Machinery and equipment		51,452			56,275
Construction in progress		7,944			5,417
Others		9,965			10,863
Total		147,328			158,078
Less accumulated depreciation		(46,366	)		(44,645	)
Foreign exchange difference		113			(3,957	)
Total	$	101,075		$	109,476

	(in thousands)
Remainder of 2022	$	5,332
2023		4,451
2024		2,506
2025		1,131
2026		1,170
Thereafter		1,707
Total outstanding debt	$	16,297

	(in thousands)
June 9, 2022	$	4,685
Change in fair value		402
June 30, 2022	$	5,087

	June 9, 2022			June 30, 2022

Stock Price	$	9.47		$	8.23
Exercise (Strike) Price	$	10.80		$	10.80
Time to Maturity (in years)		0.25			0.19
Annual Risk Free Rate		1.30	%		1.70	%
Annualized Volatility		122.00	%		122.00	%

	(in thousands)
June 9, 2022	$	1,308
Change in fair value		3
June 30, 2022	$	1,311

Consideration paid:
Cash	$	332
Assumed debt		6,548
Noncontrolling interest		221
Total consideration paid	$	7,101

Net assets acquired:
Current assets	$	4,665
Current liabilities		(4,416	)
Property, plant and equipment		5,413
Tradename		323
Customer relationship		453
Total net assets acquired		6,438
Goodwill		663
Total consideration paid	$	7,101

Consideration paid:
Cash	$	6,153
Assumed debt		7,348
Noncontrolling interest		1,714
Total consideration paid	$	15,215

Net assets acquired:
Current assets	$	4,559
Current liabilities		(1,144	)
Property, plant and equipment		9,970
Total net assets acquired		13,385
Goodwill		1,830
Total consideration paid	$	15,215

Consideration paid:
Cash	$	9,579
Assumed debt		9,723
Noncontrolling interest		4,037
Total consideration paid	$	23,339


Net assets acquired:
Current assets	$	16,715
Current liabilities		(7,293	)
Property, plant and equipment		8,289
Tradename		734
Customer relationship		1,760
Other intangible assets		20
Total net assets acquired		20,225
Goodwill		3,114
Total consideration paid	$	23,339

	-	at any time while the warrants are exercisable;

	-	upon not less than 30 days’ prior written notice of redemption to each warrant holder;

	-	if, and only if, the reported last sale price of the Ordinary Share equals or exceeds $16.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30-day trading period ending on the third business day prior to the notice of redemption to warrant holders, and

	-	if, and only if, there is a current registration statement in effect with respect to the Ordinary Share underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

	●	Cost of freight, which is impacted by shipping availability, international demand, labor shortages, strikes, regional conflicts, inadequate or obsolete port infrastructure and other factors.

	●	Foreign exchange rates, which are continually fluctuating due to the economies and/or governmental policies of different countries.

	●	Human resources productivity, which may be impacted by the training and skills of the available workforce, the nature of tools and facilities in place and availability of financial incentives.

	●	Power consumption and costs, which may be affected by governmental policies, including green energy initiatives and the age and efficiency of existing and newly acquired facilities.

	Six months ended June 30,
In thousands of USD	2022			2021			$ Change

Revenues	$	154,992		$	120,985		$	34,007
Cost of sales		139,881			104,869			35,012
Gross profit		15,111			16,116			(1,005	)
Operating expenses:
Selling, general and administrative expenses		14,696			10,870			3,826
Total operating expenses		14,696			10,870			3,826
Operating income		415			5,246			(4,831	)
Other expense (income):
Interest income		-			(269	)		269
Interest expense		4,857			3,431			1,426
Change in fair value of derivatives and contingent consideration		405			-			405
Foreign Exchange loss		1,913			906			1,007
Total other expense		7,175			4,068			3,107
(Loss) Income before income taxes		(6,760	)		1,178			(7,938	)
Income tax expense		1,605			1,222			383
Net loss		(8,365	)		(44	)		(8,321	)

Assets		Useful Lives
Buildings		39 years

Machinery and equipment (technical installations)		30-50 years

Other assets		5-30 years

Assets		Useful Lives
Trademarks		Indefinite

Customer relationships		20 years

Patents and licenses		5-10 years

Computer software		5-10 years

Other intangible assets		3-10 years