RYTHM, Inc 10-K for FY2022

RYTHM, Inc. (RYM)

10-K 2023-11-28 For: 2022-12-31

Added on April 11, 2026

About this 10-K

RYTHM, Inc filed this 10-K on November 28, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $58.26M; down 2.7% from $59.86M a year earlier
Net loss: $188.17M; compared with a net loss of $32.47M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

Nevada		30-0943453
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

(Title of Class)		Trading Symbol (s)		(Name of exchange on which registered)
Common Stock, par value $0.001 per share		AGFY		The 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	13
Item 1B	Unresolved Staff Comments	35
Item 2.	Properties	35
Item 3.	Legal Proceedings	35
Item 4.	Mine Safety Disclosures	35

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	36
Item 6.	[Reserved]	37
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	60
Item 8.	Financial Statements and Supplementary Data	60
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	60
Item 9A.	Controls and Procedures	60
Item 9B.	Other Information	61
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	61

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	62
Item 11.	Executive Compensation	71
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	80
Item 14.	Principal Accounting Fees and Services	83

PART IV

Item 15.	Exhibits and Financial Statement Schedules	84
Item 16.	Form 10-K Summary	87

Signatures		88

	●	the impact of COVID-19 and related risks;

	●	a prolonged economic downturn;

	●	risks related to the employment market and wages;

	●	liquidity of our common stock;

	●	financial reporting obligations and controls associated with being a public company;

	●	material weaknesses and ability to remediate them;

	●	data privacy and security concerns relating to our technology and practices;

	●	any potential failure of our information technology systems to perform adequately;

	●	evolving data privacy regulations and our ability to comply with them;

	●	risks related to trading ability of our common stock if our shares become subject to penny stock rules;

	●	the risk to our shareholders if we were to dissolve;

	●	risks related to analyst reports about us, our business or our market, or recommendations relating to our stock;

	●	as we are in the early stages of our TTK Solution offerings, the TTK Solution is currently an unproven business model;

	●	the TTK Solution offering requires a significant amount of capital and our collection of advanced amounts is subject to customer credit risk;

	Year Ended December 31,
(In thousands)	2022			2021
Revenue (including $2,417 and $31,439 from related parties, respectively)	$	58,259		$	59,859
Cost of goods sold		90,054			54,625
Gross (loss) profit		(31,795	)		5,234

General and administrative		73,354			30,807
Selling and marketing		9,338			4,163
Research and development		8,179			3,925
Change in contingent consideration		(2,156	)		1,412
Impairment of property and equipment		2,912			—
Impairment of goodwill and intangible assets		69,904			—
Total operating expenses		161,531			40,307
Loss from operations		(193,326	)		(35,073	)
Interest (expense) income, net		(8,750	)		74
Other expense, net		1,316			(31	)
Change in fair value of warrant liability		51,461			—
Gain on forgiveness of PPP Loan		—			45
(Loss) gain on extinguishment of notes payable		(38,985	)		2,685
Other income, net		5,042			2,773
Net loss before income taxes		(188,284	)		(32,300	)
Income tax expense		(23	)		(25	)
Net loss		(188,307	)		(32,325	)
(Income) loss attributable to non-controlling interests		134			(140	)
Net loss attributable to Agrify Corporation	$	(188,173	)	$	(32,465	)

(In thousands)	December 31, 2022			December 31, 2021
Net cash (used in) provided by:
Operating activities	$	(72,021	)	$	(30,149	)
Investing activities		(2,317	)		(104,740	)
Financing activities		72,781			138,792
Net increase in cash and cash equivalents	$	(1,557	)	$	3,903

Name	Age	Experience
Raymond Chang	53	Refer to “Directors” below.

David Kessler	45	Mr. Kessler has served as our Chief Science Officer since July 2022. Since 2013, he has served as owner and operator of Willowbrook Orchids LLC, a national award-winning boutique orchid nursery. From 2006 through 2016, Mr. Kessler served as a Horticulturist at Atlantic Hydroponics, where he oversaw project management. Mr. Kessler has over twenty years of cannabis cultivation experience including ten years of CEA (closed environmental agriculture) indoor farm design. Mr. Kessler’s focus on the application of technology to optimize process & workflow while reducing operational costs are a common theme throughout his prolific industry publications having written for such companies as Sunlight Supply, Maximum Yield Magazine, Botanicare, and Hawthorne Gardening Company. Mr. Kessler also regularly lectures at many cannabis industry events and appears regularly on industry podcasts. Mr. Kessler’s decades of experience with horticultural lighting have allowed him the opportunity to be a product tester for companies such as Sharp Electronics and the Horticultural Lighting Group. He has worked with independent 3rd party laboratories to provide unbiased testing data comparing product performance from a multitude of horticultural lighting manufacturers. Mr. Kessler received a Bachelor of Arts degree and undertook post graduate studies in biology at SUNY-Oswego.

Brian Towns	37	Mr. Towns has served as the Executive Vice President and General Manager of the Extraction Division since May 2023, and previously served as Vice President of Operations from October 2021 through May 2023. Prior to that role, Mr. Towns served as Operations Manager of Precision Extraction from October 2016 through January 2019, at which time, Mr. Towns was appointed as the Director of Operations role at Precision Extraction in January 2019 until the acquisition by Agrify in October 2021. In these roles, with increasing responsibility, he oversaw multiple critical functions, including supply chain management, manufacturing, compliance, engineering, customer support, and field service teams. Mr. Town’s visionary approach and commitment to maintaining the highest standards ensured that Precision Extraction delivered top-notch products and services to its customers. The acquisition of Precision Extraction by Agrify in October of 2021 and the addition of industry leading equipment providers Pure Pressure, Lab Society, and Cascade Sciences put Mr. Towns in the position to lead the extraction businesses. At Agrify, Mr. Town’s expertise and innovative mindset continue to drive the extraction division’s success. With 7 years of experience in the cannabis extraction industry, Mr. Towns helps spearhead the development and implementation of cutting-edge extraction technologies, ensuring Agrify remains at the forefront of the market. Before joining Agrify, Mr. Towns honed his skills in executive protection, ensuring the safety and security of high-profile individuals from January 2012 through September 2014 as an account executive. Mr. Town’s early career led him to regional management in the wireless retail business from August 2014 to October 2016, where he demonstrated exceptional leadership and strategic acumen. Mr. Towns received his formal education in Michigan.

Director	Nominating and Corporate Governance	Compensation	Audit	Mergers and Acquisitions
Max Holtzman	X (Chair)	X		X
Timothy Mahoney	X	X (Chair)	X	X
Leonard J. Sokolow		X	X
Krishnan Varier	X		X (Chair)	X (Chair)

Name and Principal Position	Year		Salary		Stock Awards⁽¹⁾		Option Awards⁽¹⁾		Non-Equity Incentive Plan Compensation⁽²⁾		Non-qualified Deferred Compensation Earnings		All Other Compensation⁽³⁾		Total
Raymond Chang		2022	$	350,479	$	471,000	$	—	$	175,000	$	—	$	33,099	$	1,029,578
Chairman and Chief Executive Officer		2021		290,000		—		4,559,100		325,000		—		31,951		5,206,051
David Kessler		2022		220,233		177,550		—		50,000		—		32,164		479,947
Chief Science Officer		2021		210,750		—		350,700		80,000		—		29,919		671,369
Thomas Massie⁽⁴⁾		2022		655,605		384,000		—		117,033		—		33,033		1,189,671
Former President and Chief Operating Officer		2021		70,686		—		828,137		42,033		—		2,663		943,519
Timothy Oakes⁽⁵⁾		2022		264,454		247,625		—		78,022		—		19,626		609,727
Former Chief Financial Officer		2021		63,667		—		350,700		28,022		—		—		442,389

	Option Awards										Stock Awards
	Grant	Vesting	Number of Securities Underlying Unexercised Options				Option Exercise		Option Expiration		Number of Shares of Stock That Have		Market Value of Shares of Stock That Have
Name	Date	Period	Exercisable		Unexercisable		Price		Date		Not Vested		Not Vested
Raymond Chang	5/6/20	⁽¹⁾		1,689		—	$	456.00		5/6/30		—	$	—
	7/20/20	⁽²⁾		71		—		456.00		7/20/30		—		—
	10/19/20	⁽²⁾		1,324		—		972.00		10/19/30		—		—
	2/17/21	⁽³⁾		1,986		1,264		2,768.00		2/17/31		—		—
	8/8/22	⁽⁵⁾		—		—		—		—		1,500		9,990
David Kessler	5/6/20	⁽¹⁾		168		—		456.00		5/6/30		—		—
	7/20/20	⁽²⁾		159		—		456.00		7/20/30		—		—
	10/19/20	⁽²⁾		241		—		972.00		10/19/30		—		—
	2/17/21	⁽³⁾		134		86		2,768.00		2/17/31		—		—
	8/8/22	⁽⁵⁾		—		—		—		—		500		3,330
	9/30/22	⁽⁵⁾		—		—		—		—		250		1,665
Timothy Oakes	10/19/20	⁽²⁾		206		—		972.00		10/19/30		—		—
	2/17/21	⁽³⁾		153		97		2,768.00		2/17/31		—		—
	8/8/22	⁽⁵⁾		—		—		—		—		625		4,163
	8/8/22	⁽⁶⁾		—		—		—		—		417		2,777
Thomas Massie	5/6/20	⁽⁷⁾		92		—		456.00		5/6/30		—		—
	8/10/20	⁽⁷⁾		66		—		456.00		7/20/30		—		—
	10/19/20	⁽⁷⁾		185		—		972.00		10/19/30		—		—
	12/21/20	⁽⁷⁾		111		—		972.00		12/21/30		—		—
	2/17/21	⁽⁷⁾		250		—		2,768.00		2/17/31		—		—
	11/10/21	⁽⁷⁾		—		—		—		—		—		—

(1)	Options granted replaced previous options awards issued on December 27, 2019, which were cancelled in May 2020. A portion of the May 6, 2020 option awards re-issued were partially vest at the time of re-issuance, with the remaining unvested portion of the stock options vesting between 24 and 48 months. 50% of the options vested upon the initial public offering.
(2)	25% of options granted will vest 12 months from the date of grant with the balance vesting in 36 equal monthly installments thereafter. 50% of the options vested upon the initial public offering.
(3)	Options granted will vest in 36 equal monthly installments from the date of grant.
(4)	33% of options granted will vest 12 months from the date of grant with the balance vesting in 24 equal monthly installments thereafter.
(5)	33% of the restricted stock units vest on each of the 1-year, 2-year and 3-year anniversaries of grant.

	Potential Termination Payments
	Without Cause or for Good Reason⁽¹⁾								Change of Control⁽²⁾
									Termination				Other		Total
Name	Salary and Bonus		Benefits⁽³⁾		Option Award Acceleration⁽⁴⁾		Total		Salary and Bonus		Benefits		Option Award Acceleration		Total
Raymond Chang	$	1,050,000	$	35,858	$	8,598	$	1,094,456	$	1,050,000	$	35,858	$	8,598	$	1,094,456
Timothy Oakes		525,000		19,626		661		545,287		525,000		19,626		661		545,287

Director	Fees Earned or Paid In Cash⁽¹⁾		Stock Awards⁽²⁾⁽³⁾		Option Awards ⁽⁴⁾		Non-Equity Incentive Plan Compensation		Change In Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation		Total
Guichao Hua	$	25,500	$	366	$	—	$	—	$	—	$	—	$	25,866
Max Holtzman		18,000		422		—		—		—		—		18,422
Timothy Mahoney		42,393		422		—		—		—		—		42,815
Leonard J. Sokolow		34,583		422		—		—		—		—		35,005
Krishnan Varier		37,667		422		—		—		—		—		38,089
Stuart Wilcox ⁽⁵⁾		13,500		1,580		—		—		—		—		15,080

	Beneficial Ownership
	Number of Shares		Percent of Total ⁽¹⁾
Principal Stockholders
Alyeska Investment Group, L.P. (2)		161,701		9.23	%
77 West Wacker Drive, 7^th Floor Chicago, IL 60601
Directors and Executive Officers ⁽³⁾⁽⁵⁾
Raymond Chang ⁽⁴⁾		356,772		9.99	%
Stuart Wilcox		650		*
David Kessler		1,020		*
Guichao Hua		3,822		*
Max Holtzman		89		*
Timothy Mahoney		524		*
Krishnan Varier		521		*
Leonard J. Sokolow		249		*
Timothy Oakes		208		*
Thomas Massie		2,057		*
All Directors and Executive Officers as a Group (10 persons)		365,912		10.54	%

Plan Category	(A) Number of Shares to be Issued upon Exercise of Outstanding Stock Options		(B) Weighted-Average Exercise Price of Outstanding Stock Options		(C) Number of Shares Remaining Available for Issuance under Equity Compensation Plans (Excluding Shares Reflected in Column (A))
2022 Omnibus Plan		—	$	—		9,354
2020 Omnibus Plan		—		2,768		—
TOTAL		—		2,768		9,354

Types of Fees	2022		2021
Audit Fees	$	418,695	$	241,535
Audit-Related Fees		31,003		123,085
Tax Fees		23,433		15,450
Total Fees	$	473,131	$	380,070

Exhibit No.		Description
2.1±		Plan of Merger and Equity Purchase Agreement, dated as of September 29, 2021, among the Registrant, Sinclair Scientific, LLC, Mass2Media, LLC dba PX2 Holdings, LLC, and each of the equity holders of Sinclair Scientific, LLC named therein (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2021
2.2		Amendment to Plan of Merger and Equity Purchase Agreement, dated as of October 1, 2021, between the Registrant and Sinclair Scientific, LLC (incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2021
2.3±		Membership Interest Purchase Agreement, dated as of December 31, 2021, among the Registrant, PurePressure, LLC, Benjamin Britton as Member Representative, and each of the equity holders of PurePressure, LLC named therein (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2022)
2.4±		Merger Agreement, dated as of February 1, 2022, among the Registrant, LS Holdings Corp., Lab Society NewCo, LLC, Michael S. Maibach Jr. as Owner Representative, and each of the Owners named therein (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2022)
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)
3.4		Certificate of Amendment to the Articles of Incorporation of the Registrant, filed July 11, 2022 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2022).
3.5		Certificate of Amendment to the Articles of Incorporation of the Registrant, filed October 17, 2022 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2022).
3.6		Certificate of Amendment to the Articles of Incorporation of the Registrant, filed March 1, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report filed with the Securities and Exchange Commission on March 3, 2023.

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 (incorporated by reference to Exhibit 4.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 2, 2021)
4.6		Form of Common Stock Purchase Warrant dated January 28, 2022 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2022)
4.7		Form of Senior Secured Note (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).
4.8		Form of Warrant Exchange Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).
4.9		Form of Note Exchange Warrant (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).
4.10		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2022)
4.11		Form of Common Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2022)
4.12		Form of Senior Secured Convertible Note (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2023)
4.13		Amendment to Senior Secured Note (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2023)
4.14		Exchange Warrant, dated October 27, 2023 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.15		Abeyance Warrant, dated October 27, 2023 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.16		Common Stock Purchase Warrant, dated October 27, 2023 (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.17		Amended and Restated Junior Secured Promissory Note (incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.18		Junior Secured Promissory Note (incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
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 Registrant 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 Registrant 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 28, 2020 between the Registrant 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 dated as of January 4, 2021 between the Registrant and Raymond Chang (incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 2, 2021)
10.6†		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)
10.7		Intellectual Property Assignment and Transfer Agreement by and among the Registrant, 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)
10.8		Supply Agreement by and among the Registrant 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)
10.9		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)
10.10		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)
10.11†		Employment Agreement, dated as of November 10, 2021, between the Registrant and Timothy Oakes † (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 15, 2021)
10.12±		Form of Securities Purchase Agreement, dated as of January 25, 2022, between the Registrant and the Purchasers party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2022
10.13±		Form of Securities Purchase Agreement, dated as of March 14, 2022, between the Registrant and High Trail Special Situations LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2022)
10.14†		Agrify Corporation 2022 Omnibus Equity Incentive Plan (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 29, 2022)
10.15†		Agrify Corporation 2022 Employee Stock Purchase Plan (incorporated by reference to Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 29, 2022)
10.16†		Separation Agreement of Thomas Massie, dated as of July 8, 2022 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2022).
10.17†		Employment Agreement, dated as of July 14, 2022, between the Registrant and Stuart Wilcox (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2022).
10.18±		Exchange Agreement, dated as of August 18, 2022, between the Registrant and High Trail Special Situations LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).
10.19±		Equity Distribution Agreement, dated as of October 18, 2022, between the Registrant and Canaccord Genuity 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 October 18, 2022).
10.20†		Employment Agreement, dated as of July 25, 2022, between the Registrant and Timothy Hayden (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 24, 2023)
10.21±		Exchange Agreement, dated as of March 8, 2023, between the Registrant and High Trail Special Situations LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2023)
10.22		Company and Investor Acknowledgment, dated as of October 27, 2023, between the Registrant and CP acquisitions LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)

10.23		Letter Agreement, dated as of October 27, 2023, between the Registrant and High Trail Special Situations LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
10.24±		Modification Agreement, effective as of October 18, 2023, between the Registrant and Mack Molding Company (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
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
23.1*		Consent of Independent Registered Public Accounting Firm
31.1*		Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

	±	Certain information has been omitted from this exhibit in reliance upon Item 601(a)(5) of Regulation S-K.
	†	Indicates a management contract, compensatory plan, or arrangement.

	AGRIFY CORPORATION

Date: November 27, 2023	By:	/s/ Raymond Chang
		By: Raymond Chang
		Chief Executive Officer (Principal Executive Officer and Principal Financial and Accounting Officer)

Signature	Title	Date

/s/ Raymond Chang	Chief Executive Officer and Director	November 27, 2023
Raymond Chang	(Principal Executive Officer and Principal Financial and Accounting Officer)

/s/ Guichao Hua	Director	November 27, 2023
Guichao Hua

/s/ Krishnan Varier	Director	November 27, 2023
Krishnan Varier

/s/ Timothy Mahoney	Director	November 27, 2023
Timothy Mahoney

/s/ Max Holtzman	Director	November 27, 2023
Max Holtzman

/s/ Leonard Sokolow	Director	November 27, 2023
Leonard Sokolow

Fiscal Years Ended December 31, 2022 and 2021:

Independent Auditors’ Report (PCAOB ID # 688)		F-2
Consolidated Financial Statements
Consolidated Balance Sheets		F-3
Consolidated Statements of Operations		F-4
Consolidated Statements of Stockholders’ Equity		F-5
Consolidated Statements of Cash Flows		F-7
Notes to Consolidated Financial Statements		F-8 – F-61

	As of December 31,
	2022			2021

Assets
Current assets:
Cash and cash equivalents	$	10,457		$	12,014
Restricted cash		10,000			—
Marketable securities		460			44,550
Accounts receivable, net of allowance for doubtful accounts of $4,605 and $1,415 at December 31, 2022 and 2021, respectively		1,070			7,222
Inventory, net of reserves of $32,422 and $942 at December 31, 2022 and 2021, respectively		21,396			20,498
Prepaid expenses and other current assets		1,510			2,452
Total current assets		44,893			86,736
Loans receivable, net of allowance for doubtful accounts of $33,050 and $0 at December 31, 2022 and 2021, respectively		12,214			22,255
Property and equipment, net		10,044			6,232
Operating lease right-of-use assets		2,210			1,479
Goodwill		—			50,090
Intangible assets, net		—			14,072
Other non-current assets		326			1,184
Total assets	$	69,687		$	182,048
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	20,543		$	9,151
Accrued expenses and other current liabilities		16,380			28,764
Operating lease liabilities, current		734			814
Long-term debt, current		28,833			1,089
Deferred revenue		4,112			3,772
Total current liabilities		70,602			43,590
Warrant liabilities		5,985			—
Operating lease liabilities, net of current		1,587			704
Long-term debt, net of current		407			12
Other non-current liabilities		147			318
Total liabilities		78,728			44,624
Commitments and contingencies (Note 17)
Stockholders’ (deficit) equity:
Common Stock, $0.001 par value per share, 5,000,000 and 2,500,000 shares authorized at December 31, 2022 and 2021, respectively, 1,038,298 and 111,035 shares issued and outstanding at December 31, 2022 and 2021, respectively ⁽¹⁾		1			—
Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding		—			—
Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding		—			—
Additional paid-in capital		237,875			196,034
Accumulated deficit		(247,148	)		(58,975	)
Total stockholders’ (deficit) equity attributable to Agrify		(9,272	)		137,059
Non-controlling interests		231			365
Total liabilities and stockholders’ equity	$	69,687		$	182,048

	Common Stock				Preferred A Stock					Additional Paid-In-		Accumulated			Total Stockholders’ (Deficit) Equity attributable			Non- Controlling		Total Stockholders’ (Deficit)
	Shares		Amount		Shares			Amount		Capital		Deficit			to Agrify			Interests		Equity
Balance at January 1, 2021		21,058	$	—		100,000		$	—	$	19,831	$	(26,510	)	$	(6,679	)	$	225	$	(6,454	)
Stock-based compensation		—		—		—			—		5,552		—			5,552			—		5,552
Beneficial conversion feature associated with amended Convertible Promissory Notes		—		—		—			—		3,869		—			3,869			—		3,869
Conversion of Convertible Notes		8,485		—		—			—		13,100		—			13,100			—		13,100
Issuance of Common Stock – Initial Public Offering (“IPO”), net of fees		31,050		—		—			—		56,961		—			56,961			—		56,961
Issuance of Common Stock – Secondary public offering, net of fees		31,945		—		—			—		79,839		—			79,839			—		79,839
Issuance of Common Stock in connection with acquisition		40		—		—			—		176		—			176			—		176
Conversion of Preferred A Stock		6,865		—		(100,000	)		—		—		—			—			—		—
Acquisition of Precision and Cascade		3,332		—		—			—		12,355		—			12,355			—		12,355
Acquisition of PurePressure		1,202		—		—			—		2,211		—			2,211			—		2,211
Exercise of options		3,288		—		—			—		2,132		—			2,132			—		2,132
Exercise of warrants		3,770		—		—			—		8		—			8			—		8
Net loss		—		—		—			—		—		(32,465	)		(32,465	)		140		(32,325	)
Balance at December 31, 2021		111,035	$	—		—		$	—	$	196,034	$	(58,975	)	$	137,059		$	365	$	137,424

	Year Ended December 31, 2022					Year Ended December 31, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
New England Innovation Academy (“NEIA”) – Related Party		*		*		$	22,010		36.8	%
Greenstone Holdings (“Greenstone”) – Greenstone is a related party because one of the Company’s former Agrify Brands employees and its VP of Engineering had a minority ownership		*		*		$	9,429		15.8	%
Company Customer Number – 136	$	8,005		13.8	%		*		*
Company Customer Number – 139	$	8,761		15.0	%		*		*

	As of December 31, 2022					As of December 31, 2021
(In thousands)	Amount		% of Total Accounts Receivable			Amount		% of Total Accounts Receivable
NEIA – Related Party		*		*		$	3,498		48.4	%
Company Customer Number – 126 ⁽¹⁾		*		*		$	1,541		21.3	%
Company Customer Number – 15095	$	352		32.9	%		*		*
Company Customer Number – 10888	$	251		23.5	%		*		*
Company Customer Number – 16491	$	123		11.5	%		*		*

*	Customer accounts receivable balance, as a percentage of total accounts receivable balance, was less than 10%
(1)	The accounts receivable balance was fully reserved at December 31, 2022 due to an ongoing dispute with the customer.

		Estimated Useful Life (Years)
Computer and office equipment		2 to 3
Furniture and fixtures		2
Software		3
Vehicles		5
Research and development laboratory equipment		5
Machinery and equipment		3 to 5
Leased equipment		5 to 13
Trade show assets		3 to 5
Leasehold improvements		Lower of estimated useful life or remaining lease term

Trade names		5 to 7 years
Acquired developed technology		5 to 8 years
Non-compete agreements		5 years
Customer relationships		5 to 8 years
Capitalized website costs		3 to 5 years

	Level 1:	Observable inputs such as quoted prices for identical assets or liabilities in active markets.

	Level 2:	Other inputs that are observable directly or indirectly, such as quoted prices for similar instruments in active markets or for similar markets that are not active.

	Level 3:	Unobservable inputs for which there is little or no market data which require the Company to develop its own assumptions about how market participants would price the asset or liability.

	December 31, 2022								December 31, 2021
	Fair Value Measurements Using Input Types								Fair Value Measurements Using Input Types
(In thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Mutual funds (included in cash and cash equivalents in 2021)	$	33	$	—	$	—	$	33	$	178	$	—	$	—	$	178
Municipal bonds		—		—		—		—		9,961		—		—		9,961
Corporate bonds		427		—		—		427		34,589		—		—		34,589
Total assets	$	460	$	—	$	—	$	460	$	44,728	$	—	$	—	$	44,728
Liabilities
Contingent consideration	$	—	$	—	$	—	$	—	$	—	$	—	$	6,137	$	6,137
Warrant Liabilities – January 2022 Warrants		—		—		4		4		—		—		—		—
Warrant Liabilities – March 2022 Warrants		—		—		34		34		—		—		—		—
Warrant Liabilities – August 2022 Warrants		—		—		93		93		—		—		—		—
Warrant Liabilities – December 2022 Warrants		—		—		5,854		5,854		—		—		—		—
Total liabilities	$	—	$	—	$	5,985	$	5,985	$	—	$	—	$	6,137	$	6,137