RYTHM, Inc 10-K, filed Apr 2, 2021

RYTHM, Inc. (RYM)

10-K 2021-04-02 For: 2020-12-31

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Added on April 11, 2026

About this 10-K

RYTHM, Inc filed this 10-K on April 2, 2021, covering the fiscal year ended December 31, 2020.

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(Title of Class)		Trading Symbol (s)		(Name of exchange on which registered)
Common Stock, par value $0.001 per share		AGFY		NASDAQ Capital Market

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

		Page #
PART I

Item 1.	Business	1
Item 1A.	Risk Factors	31
Item 1B	Unresolved Staff Comments	47
Item 2.	Properties	47
Item 3.	Legal Proceedings	47
Item 4.	Mine Safety Disclosures	47

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	48
Item 6.	Selected Financial Data	50
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	66
Item 8.	Financial Statements and Supplementary Data	66
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	66
Item 9A.	Controls and Procedures	66
Item 9B.	Other Information	67

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	68
Item 11.	Executive Compensation	73
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	78
Item 13.	Certain Relationships and Related Transactions, and Director Independence	79
Item 14.	Principal Accounting Fees and Services	81

PART IV
Item 15.	Exhibits and Financial Statement Schedules	83
Item 16.	Form 10-K Summary

Signatures		85

	AGRIFY		Conventional LED System		Conventional HPS System

Build-Out Cost
Estimated Facility Infrastructure & Equipment	$	12,622,960	$	12,397,550	$	6,762,300
		($280 per sq. ft. x 45,082 sq. ft.)		($275 per sq. ft. x 45,082 sq. ft.)		($150 per sq. ft. x 45,082 sq. ft.)
Cultivation Equipment	$	15,040,000	$	4,050,000	$	2,025,000
Estimated Total Build-Out Cost	$	27,662,960	$	16,447,550	$	8,787,300

Economic Analysis
Total Canopy Sq. Ft.		48,128		16,200		16,200
		(752 VFUS)		(242 Benches)		(242 Benches)
Estimated Annual Yield / Sq. Ft. (lbs.)		0.609		0.463		0.420
Estimated Total Annual Yield		29,324		7,494		6,804
Estimated Price per lb. (avg. assumption)	$	3,000	$	3,000	$	3,000
Estimated Annual Revenue	$	87,973,171	$	22,482,360	$	20,412,000
Estimated Annual OpEx	$	9,589,076	$	3,522,236	$	4,422,600
		($327 /lb.)		($470 /lb.)		($650 /lb.)
Annual Estimated EBITDA	$	78,384,096	$	18,960,124	$	15,989,400
NPV (10 years, 15% discount rate)	$	365,728,679	$	78,708,923	$	71,459,799
Payback Period		4 months		10 months		7 months

	AGRIFY		Conventional LED System		Conventional HPS System

Build-Out Cost

Estimated Facility Infrastructure & Equipment	$	5,600,000	$	12,397,550	$	6,762,300
		($280 per sq. ft. x 20,000 sq. ft.)		($275 per sq. ft. x 45,082 sq. ft.)		($150 per sq. ft. x 45,082 sq. ft.)
Cultivation Equipment	$	5,819,000	$	4,050,000	$	2,025,000
Estimated Total Build-Out Cost	$	11,419,000	$	16,447,550	$	8,787,300

Economic Analysis

Total Canopy Sq. Ft.		16,192		16,200		16,200
		(253 VFUS)		(242 Benches)		(242 Benches)
Estimated Annual Yield /Sq. Ft. (lbs.)		0.610		0.463		0.420
Estimated Total Annual Yield		9,877		7,494		6,804
Estimated Price per lb. (avg. assumption)	$	3,000	$	3,000	$	3,000
Estimated Annual Revenue	$	29,631,360	$	22,482,360	$	20,412,600
Estimated Annual OpEx	$	3,229,818	$	3,522,236	$	4,422,600
		($327 /lb.)		($470 /lb.)		($650 /lb.)
Annual Estimated EBITDA	$	26,401,542	$	18,960,124	$	15,989,400
NPV (10 years, 15% discount rate)	$	121,084,229	$	78,708,923	$	71,459,799
Payback Period		5 months		10 months		7 months

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted- average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(1)
	(a)		(b)		(c)
Equity compensation plans approved by security holders		3,133,109		—		1,400,623
Equity compensation plans not approved by security holder		0		—		0
Total		3,133,109		—		1,400,623

Closing Date	Principal Amount of Notes Issued
8/19/2020	$	1,000,000
9/16/2020	$	2,000,000
10/20/2020	$	1,000,000
9/23/2020	$	2,800,000
11/13/2020	$	1,000,000
11/27/2020	$	500,000
11/18/2020	$	1,000,000
11/30/2020	$	1,000,000
12/8/2020	$	100,000
12/1/2020	$	200,000
12/1/2020	$	500,000
12/1/2020	$	800,000
12/7/2020	$	100,000
12/28/2020	$	500,000
12/14/2020	$	500,000
12/31/2020	$	100,000

Components of Purchase Prices:
Obligation to invest cash in profit interest	$	1,140,000
Capital stock consideration		1,356,000
Noncontrolling Interest		207,000
Total purchase price	$	2,703,000

Allocation of Purchase Price:
Net tangible assets	$	543,000
Identifiable intangible assets:
Brand rights		930,000
Customer relationships		850,000
Total identifiable intangible assets		1,780,000
Goodwill		380,000
Total purchase price allocation	$	2,703,000

Components of Purchase Price:
Waiver of net receivable owed to Agrify	$	214,000
Total purchase price	$	214,000

Allocation of Purchase Price:
Net tangible assets (liabilities):
Cash	$	4,000
Property and Equipment		817,000
Accounts payable		(187,000	)
Accrued expenses		(23,000	)
Financing lease liabilities		(649,000	)
Net tangible (liabilities):		(38,000	)
Goodwill		252,000
Total purchase price allocation	$	214,000

	Year ended December 31,
(In thousands)	2020		2019
Revenue, net	$	12,121,000	$	3,664,000
Net loss before non-controlling interest	$	22,743,000	$	9,907,000
Loss attributable to non-controlling interest		65,000		106,000
Net loss	$	22,678,000	$	9,801,000

	Years ended December 31,
	2020			2019
Revenue, net	$	12,087,000		$	4,088,000
Cost of goods sold		11,517,000			4,333,000
Gross profit (loss)		570,000			(245,000	)
OPERATING EXPENSES
Research and development		3,354,000			109,000
Selling, general and administrative expenses		9,832,000			2,737,000
Total operating expenses		13,186,000			2,846,000
Loss from operations		(12,616,000	)		(3,091,000	)
OTHER (EXPENSE) INCOME, NET
Interest (expense) income, net		(481,000	)		49,000
Loss on extinguishment of notes payable		(5,618,000	)		—
Change in fair value of derivative liabilities		(2,924,000	)		—
Other (expense) Income, net		(9,023,000	)		49,000
Net loss before non-controlling interest		(21,639,000	)		(3,042,000	)
Loss attributable to non-controlling interest		22,000			—
Net loss attributable to Agrify Corporation.	$	(21,617,000	)	$	(3,042,000	)
Net loss per share attributable to common stockholders – basic and diluted	$	(5.32	)	$	(0.99	)
Weighted average common shares outstanding – basic and diluted		4,175,867			3,068,458

	December 31, 2020			December 31, 2019
Cash (used in) provided by:
Operating Activities	$	(14,782,000	)	$	(3,441,000	)
Investing Activities	$	(1,228,000	)	$	(184,000	)
Financing Activities	$	23,915,000		$	3,746,000

			Payments Due by Period
	Total		< 1 year		1 – 3 years		3 – 5 years		> 5 years
Notes Payable, derivative liability and long-term debt	$	20,462,930	$	19,634,000	$	784,328	$	44,602	$	—
Short term lease obligations		25,179		25,179		—		—		—
Finance lease obligations		681,888		189,870		334,830		140,920		16,268
Purchase obligations		2,118,859		2,118,859		—		—		—
Total contractual obligations	$	23,288,856	$	21,967,908	$	1,119,158	$	185,522	$	16,268

Name	Age	Position
Raymond Chang	50	Chief Executive Officer; Chairman of the Board of Directors
Niv Krikov	50	Chief Financial Officer
Robert Harrison	49	Chief Operating Officer
Guichao Hua	55	Director
Thomas Massie	57	Independent Director
Krishnan Varier	41	Independent Director
Timothy Mahoney	64	Independent Director
Timothy Oakes	52	Independent Director
Stuart Wilcox	60	Independent Director

Name and Principal Position	Year	Salary ($)			Bonus ($)		Stock Awards ($)		Option Awards ($)⁽¹⁾		Non-Equity Incentive Plan Compensation ($)		Non-qualified Deferred Compensation Earnings ($)		All Other Compensation ($)			Total ($)
Raymond Chang,	2020		153,800			—		—		740,485		—		—		34,472	⁽²⁾		928,757
Chief Executive Officer and Chairman of the Board	2019		86,345			—		—		320,297		—		—		13,848	⁽²⁾		420,490
Matthew Liotta,	2020		161,774	⁽³⁾		—		—		135,007		—		—		34,472	⁽⁴⁾		331,253
Former Chief Technology Officer⁽³⁾	2019		87,019			—		—		115,041		—		—		140,514	⁽⁵⁾		342,574
Niv Krikov,	2020		133,712			—		—		373,130		—		—		31,599	⁽⁴⁾		538,441
Chief Financial Officer	2019		—			—		—		—		—		—		—			—
Robert Harrison,	2020		94,112	⁽³⁾		—		—		186,444		—		—		24,418	⁽⁴⁾		304,974
Chief Operating Officer	2019		—			—		—		—		—		—		—			—

	Option Awards									Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock that Have Not Vested (#)		Market Value of Shares or Units of Stock that Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)
Raymond Chang⁽¹⁾		108,017		229,698		—		2.28	May 6, 2030		—		—		—		—
		—		14,267		—		2.28	July 20, 2030		—		—		—		—
		—		264,823		—		4.86	October 19, 2030		—		—		—		—

Niv Krikov⁽²⁾		—		147,410		—		2.28	May 6, 2030		—		—		—		—
		—		23,282		—		2.28	July 20, 2030		—		—		—		—
		—		137,711		—		4.86	October 19, 2030		—		—		—		—

Robert Harrison⁽³⁾		—		13,401		—		2.28	May 6, 2030		—		—		—		—
		—		71,944		—		2.28	July 20, 2030		—		—		—		—
		—		68,856		—		4.86	October 19, 2030		—		—		—		—

Matthew Liotta⁽⁴⁾		54,011		141,651		—		2.51	May 6, 2030		—		—		—		—

Name and Address of Beneficial Owner⁽¹⁾	Shares Beneficially Owned			Percentage Total Voting Power
Officers and Directors:
Raymond Chang		2,035,107	⁽²⁾		5.6	%
Guichao Hua		750,669	⁽³⁾		3.4	%
Niv Krikov		378,996	⁽⁴⁾		*
Thomas Massie		161,254	⁽⁵⁾		*
Robert Harrison		154,201	⁽⁶⁾		*
Krishnan Varier		91,120	⁽⁶⁾		*
Timothy Oakes		91,120	⁽⁶⁾		*
Timothy Mahoney		91,120	⁽⁶⁾		*
Stuart A. Wilcox		50,000	⁽⁶⁾		*
All directors and executive officers as a group (9 persons)		3,803,587			10.7	%

5% stockholders:
Li Chen		1,052,207	⁽⁷⁾		5.2	%

(3)	Includes (i) 116,913 shares of common stock, (ii) 542,636 shares of common stock held by Inventronics, of which Mr. Hua shares voting and dispositive control, and (iii) options to purchase 91,120 shares of common stock.

(4)	Includes (i) 20,593 shares of common stock and (ii) options to purchase 358,403 shares of common stock.

Fees	2020		2019

Audit Fees	$	227,270	$	181,985
Audit-Related Fees		104,159		—
Tax Fees
All Other Fees
Total	$	331,429	$	181,985

Exhibit No.		Description
1.1		Underwriting Agreement dated as of February 16, 2021 between the Registrant and Maxim Group, LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2021)
1.2		Underwriting Agreement dated as of January 27, 2021 between the Registrant and Maxim Group, LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2021)
2.1		Agreement and Plan of Merger dated January 22, 2020 between the Company and TriGrow Systems, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
3.1		Articles of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021)
3.2		Third Amended and Restated Certificate of Designations of the Series A Convertible Preferred Stock of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021)
3.3		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)
4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)
4.2		Form of Representative’s Warrant dated February 19, 2021 (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 11, 2021)
4.3		Form of Representative’s Warrant dated January 27, 2021 (incorporated by reference to Exhibit 4.2 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)
4.4		Form of Warrant issued to Noteholders (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
4.5*		Description of Registrant’s Securities
10.1		Operating Agreement of Agrify-Valiant, LLC dated December 8, 2019 (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.2		Distribution Agreement dated June 7, 2019 between the Company and Bluezone Products, Inc.± (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.3		Distribution Agreement dated March 9, 2020 between the Company and Enozo Technologies Inc.± (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.4		Purchase Agreement dated as of July 10, 2020 between the Company and 4D Bios Inc.± (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)

10.5*		Employment Agreement of Raymond Chang †
10.6		Employment Agreement of Former Chief Technology Officer, Matthew Liotta † (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.7		Separation Agreement dated August 5, 2020 between the Company and Matthew Liotta † (incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.8		Profits Interest Agreement dated January 21, 2020 between the Company and CCI Finance, LLC (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.9		Form of Registration Rights Agreement between the Company and the Series A Preferred stockholders (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.10		Form of Series A Subscription Agreement between the Company and the Series A Preferred stockholders (incorporated by reference to Exhibit 10.10 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021)
10.11		2020 Omnibus Equity Incentive Plan † (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.12		Form of Note and Warrant Purchase Agreement (incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.13		Form of Convertible Promissory Note (incorporated by reference to Exhibit 10.13 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021)
10.14		Intellectual Property Assignment and Transfer Agreement by and among the Company, Agrify Brands, LLC and The Holden Company effective as of January 1, 2020 (incorporated by reference to Exhibit 10.16 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.15		Supply Agreement by and among the Company and Mack Molding Co. dated December 7, 2020 ± (incorporated by reference to Exhibit 10.15 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021)
10.16		Amended and Restated Operating Agreement of Agrify Brands, LLC effective as of August 12, 2020 (incorporated by reference to Exhibit 10.18 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.17		Employment Agreement of Niv Krikov † (incorporated by reference to Exhibit 10.17 to the Registrant’s Amendment No. 3 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)
10.18		Form of Indemnification Agreement with directors and executive officers (incorporated by reference to Exhibit 10.18 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 11, 2021)
14.1		Code of Ethics of Agrify Corporation Applicable To Directors, Officers And Employees (incorporated by reference to Exhibit 14.1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
21.1		Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021)
31.1*		Certification of CEO as required by Rule 13a-14(a)/15d-14, filed herewith.
31.2*		Certification of CFO as required by Rule 13a-14(a)/15d-14, filed herewith.
32.1**		Certification of CEO as required by Rule 13a-14(a) and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code, filed herewith.
32.2**		Certification of CFO as required by Rule 13a-14(a) and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code, filed herewith.

	AGRIFY CORPORATION

Date: April 2, 2021	By:	/s/ Raymond Chang
		By: Raymond Chang
		Title: Chief Executive Officer (principal executive officer)

Signature	Title	Date
/s/ Raymond Chang	Chief Executive Officer and Director	April 2, 2021
Raymond Chang	(principal executive officer)
/s/ Niv Krikov	Chief Financial Officer	April 2, 2021
Niv Krikov	(principal financial and accounting officer)
/s/ Thomas Massie	Director	April 2, 2021
Thomas Massie
/s/ Guichao Hua	Director	April 2, 2021
Guichao Hua
/s/ Krishnan Varier	Director	April 2, 2021
Krishnan Varier
/s/ Timothy Oakes	Director	April 2, 2021
Timothy Oakes
/s/ Timothy Mahoney	Director	April 2, 2021
Timothy Mahoney
/s/ Stuart Wilcox	Director	April 2, 2021
Stuart Wilcox

Fiscal Years Ended December 31, 2020 and 2019:

Independent Auditors’ Report		F-2
Consolidated Financial Statements
Consolidated Balance Sheets		F-3
Consolidated Statements of Operations		F-4
Consolidated Statements of Stockholders’ Equity Deficit		F-5
Consolidated Statements of Cash Flows		F-6
Notes to Consolidated Financial Statements		F-7 – F-29

	As of December 31,
	2020			2019
Assets:
Cash and cash equivalents	$	8,111		$	206
Accounts receivable, net of allowance for doubtful accounts of $54 and $0, as of December 31, 2020 and December 31, 2019, respectively.		4,014			—
Inventory		5,170			2,481
Deferred IPO costs		981			—
Prepaid expenses and other receivables		364			366
Total current assets		18,640			3,053

Property Plant and Equipment, net		873			38
Goodwill		632			—
Intangible assets acquired through business combination, net		1,603			—
Capitalized website costs, net		91			136
Total Assets	$	21,839		$	3,227

Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	693		$	870
Accrued expenses and other current liabilities		6,550			355
Notes payable, net of debt discount of $4,777 and $0 as of December 31, 2020 and December 31, 2019, respectively		12,493			—
Derivative liabilities		7,141			—
Deferred revenue		152			2,807
Total current liabilities		27,029			4,032

Other non-current liabilities		435			—
Long-term debt		829			—
Total Liabilities	$	28,293		$	4,032

Commitments and contingencies (Note 19)

Stockholders’ Equity (Deficit)
Common stock, 50,000,000 and 6,500,000 shares, $0.001 par value authorized as of December 31, 2020 and December 31, 2019, respectively; 4,211,677 and 3,616,125 shares issued at December 31, 2020 and 2019, respectively		4			4
Preferred stock 2,895,000 and 0 shares, $0.001 par value authorized as of December 31, 2020 and 2019, respectively; 0 shares issued as of December 31, 2020 and 2019		—			—
Preferred A stock 105,000 and 0 shares, $0.001 par value authorized as of December 31, 2020 and 2019, respectively; 100,000 and 0 shares issued at December 31, 2020 and 2019, respectively		—			—
Additional paid in capital		19,827			4,124
Subscription receivable		—			(40	)
Accumulated deficit		(26,510	)		(4,893	)
Total Stockholders’ Equity (Deficit)		(6,679	)		(805	)
Non-controlling Interests		225			—
Total Liabilities and Stockholders’ Equity	$	21,839		$	3,227

	Common Stock				Preferred A Stock				Additional Paid-In		Subscription			Accumulated			Total Stockholders’ Equity attributable			Non- controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Receivable			Deficit			to Agrify			Interests			Equity
Balance, January 1, 2019		2,326,458	$	2		—	$	—	$	91	$	—		$	(1,851	)	$	(1,758	)	$	—		$	(1,758	)
Issuance of common stock		1,289,667		2		—		—		3,924		—			—			3,926			—			3,926
Issuance of common stock		—		—		—		—		—		(40	)		—			(40	)		—			(40	)
Stock based compensation										109								109						109
Net loss		—		—		—		—		—		—			(3,042	)		(3,042	)		—			(3,042	)
Balance, January 1, 2020		3,616,125		4		—		—		4,124		(40	)		(4,893	)		(805	)		—			(805	)
Stock based compensation		—		—		—		—		1,921		—			—			1,921			—			1,921
Stock subscription		—		—		—		—		—		40			—			40			—			40
Issuance of Preferred A Stock		—		—		100,000		—		10,000		—			—			10,000			—			10,000
Investment in Agrify Valiant		—		—		—		—		—		—			—						40			40
Acquisition of TriGrow Systems		595,552		—		—		—		1,356		—			—			1,356			207			1,563
Warrants issued and recorded as debt discount in connection with notes payable issuances		—		—		—		—		2,426		—			—			2,426			—			2,426
Net loss		—		—		—		—		—		—			(21,617	)		(21,617	)		(22	)		(21,639	)
Balance December 31, 2020		4,211,677	$	4		100,000	$	—	$	19,827	$	—		$	(26,510	)	$	(6,679	)	$	225		$	(6,454	)

	For the year ended December 31,
(In thousands)	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to Agrify Corporation	$	(21,617	)	$	(3,042	)
Adjustments to reconcile net loss attributable to Agrify Corporation to net cash used in operating activities:
Depreciation and amortization		407			10
Provision for doubtful accounts		54			—
Compensation in connection with the issuance of stock options		1,921			109
Non-cash interest expense		447			—
Loss on extinguishment of notes payable, net		5,618			—
Change in fair value of derivative liabilities		2,924			—
Loss from disposal of fixed assets		120			—
Loss attributable to non- controlling interests		(22	)		—
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		(3,709	)		—
Inventory		(2,941	)		(369	)
Prepaid expenses and other receivables		12			(366	)
Accounts payable		(527	)		(833	)
Accrued expenses		4,780			355
Deferred revenue		(2,249	)		695
Net cash used in operating activities		(14,782	)		(3,441	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(136	)		(41	)
Purchases of capitalized website costs		—			(143	)
Cash paid for business combination, net of cash acquired		(1,092	)		—
Net cash used in investing activities		(1,228	)		(184	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of Preferred A Stock		10,000			—
Minority interest in Valiant		40			—
Proceeds from PPP Loans		823			—
Payments of financing leases		(88	)		—
Proceeds from notes payable		13,100			—
Repayment of loan with a related party		—			(133	)
Proceeds from issuance of common stock		40			3,879
Net cash provided by financing activities		23,915			3,746
Net increase in cash		7,905			121
Cash – Beginning of the period		206			85
Cash – End of the period	$	8,111		$	206
Supplemental disclosure of non-cash investing and financing activities:
Warrants issued and recorded as debt discount in connection with notes payable issuances	$	2,426		$	—
Bifurcated embedded conversion options recorded as derivative liabilities and debt discount	$	2,769		$	—

		Estimated Useful Life (Years)
Computer equipment and software		2
Furniture and fixture		5
Vehicles and machinery		5
Leasehold improvements		Lower of estimated useful life or remaining lease term

	December 31, 2020		December 31, 2019
Other Receivables	$	168	$	176
Prepaid software		48		55
Prepaid professional fees		-		100
Prepaid expenses		148		35
	$	364	$	366

	December 31, 2020			December 31, 2019
Computer equipment	$	128		$	29
Furniture and fixture		16			2
Leasehold Improvements		10			—
Machinery		868			10
Vehicle		62			—
Total property and equipment		1,084			41
Less accumulated depreciation		(211	)		(3	)
Property and Equipment, Net	$	873		$	38

	Brand Rights			Customer Relationships			Total
December 31, 2020
Cost	$	930		$	850		$	1,780
Accumulated amortization		(88	)		(89	)		(177	)
Net	$	842		$	761		$	1,603

(in thousands) Years Ending December 31,	Amount
2021	$	187
2022		187
2023		187
2024		187
2025		187
2026 and thereafter		668
Total	$	1,603

	December 31, 2020		December 31, 2019
Accrued professional fees	$	1,135	$	91
Accrued consulting fees		97		140
Compensation related fees		225		22
Accrued construction costs		4,468		—
Financing lease liabilities		148		—
Other accrued expenses		477		102
Total accrued expenses	$	6,550	$	355

Components of Purchase Price:
Obligation to invest cash in profit interest	$	1,140
Capital stock consideration		1,356
Noncontrolling Interest		207
Total purchase price	$	2,703

Allocation of Purchase Price:
Net tangible assets, including cash acquired of $44	$	543

Identifiable intangible assets:
Brand rights		930
Customer relationships		850
Total identifiable intangible assets		1,780
Goodwill		380
Total purchase price allocation	$	2,703

	Year ended December 31,
(In thousands)	2020		2019
Revenue, net	$	12,121	$	3,664
Net loss before non-controlling interest	$	22,743	$	9,907
Loss attributable to non-controlling interest		65		106
Net loss	$	22,678	$	9,801