Agrify Corp. (Nasdaq: AGFY) announced Wednesday that it converted $13.8 million in debt to equity in and effort to regain compliance with a Nasdaq minimum shareholders’ equity requirement.
The debt conversion comes just days after Agrify and Nature’s Miracle (NASDAQ: NMHI) mutually agreed to terminate their previously announced merger plan that would have given Agrify shareholders ownership of about 30% of the combined company.
Agrify said entities affiliated with CEO Raymond Chang converted $11.5 million of a senior convertible note and $2.29 million of a junior secured note into pre-funded warrants exercisable for millions of Agrify shares.
The conversion involves CP Acquisitions LLC, which is controlled by Chang and board member I-Tseng Jenny Chan, and GIC Acquisitions LLC, and netted pre-funded warrants for up to 8,561,644 shares and 3,225,807 shares, respectively.
In a statement, Chang said the “substantial” debt conversion “shows the management and the shareholders’ commitment to the future of Agrify.” He said it gives the firm “a cleaner and positive balance sheet to fuel our future growth.”
Michigan-based Agrify said it now believes its shareholders’ equity exceeds the $2.5 million minimum under Nasdaq’s Listing Rule 5550(b)(1) for continued listing after facing a delisting notice last October. The provisions allow for adjustments if the company conducts equity financing in the next year, subject to shareholder approval.
Yesterday, Agrify posted a net loss of just $38,000 in the first quarter, as cuts in areas like administration and marketing offset a 55% revenue slide to $2.6 million.
The company led by Chang has been restructuring since 2022 after heavy losses. It ended 2023 with an accumulated deficit of around $265.8 million.
The post Agrify converts $13.8M debt to equity to regain Nasdaq compliance appeared first on Green Market Report.
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