The past few months have been a rather complicated period for the cannabis specialist dealing with the market crash, a lawsuit, and a notice of delisting issued by the Listing Qualification Department of The Nasdaq Stock Market, LLC.
On September 15, 2022, Agrify provided a notice of default to Bud & Mary’s Cultivation as the client was in default of its obligations under a term loan agreement between both companies. The contract goes back to 2021, when Agrify announced in a press release, the 50,000-square-foot facility project. The initial phases were to see the installation of several of Agrify’s Vertical Farming Units due to be completed by Q1 2022 and where Agrify provided senior financing of ‘up to USD 13.5M for the construction to be repaid within 24 months).
On October 5, 2022 Bud & Mary’s Cultivation, Inc filed a complaint in the Superior Court of Massachusetts seeking monetary damages in connection with alleged ‘unfair or deceptive trade practices, breach of contract, and conversion arising from the Agreement’. Agrify commented in a recent press release, about its intention to defend itself against the allegations in what it claims to be “a meritless lawsuit in an obvious attempt to avoid repayment of the credit facility”.
This lawsuit follows another investigation from Bragar Eagel & Squire, P.C., which is investigating potential claims against Agrify Corporation (NASDAQ: AGFY) on behalf of its stockholders. Investigation concerns whether Agrify has violated federal securities laws and/or engaged in other unlawful business practices.
On December 16, 2021, during trading hours, market analyst Bonitas Research published a report regarding Agrify which alleges several issues at the Company including that “[w]e believe that Agrify created artificial demand for its product by financing undisclosed Company insiders to act as independent customers.”
This week, the company also received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market, LLC notifying the company that its shares have been trading under USD 1.00 for 30 consecutive days and that, under the Minimum Bid Requirement, it had 180 calendar days to regain compliance (i.e. reaching USD 1.00 per share for 10 consecutive trading days during the 180-day compliance period).
The company intends to comply with the requirements by effecting a reverse stock split (To be voted on October 14, 2022) to authorize a reverse stock split at a ratio between 1|2 and 1|20. Moreover, yesterday the company has announced a USD 7.5M potential sale through three new projects.
More to follow…
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