View:
United States securities and exchange commission logo
November 3, 2020
Niv Krikov
Chief Financial Officer
Agrify Corporation
101 Middlesex Turnpike
Suite 6, PMB 326
Burlington, MA 01803
Re: Agrify Corp
Amendment No. 1 to
Draft Registration
Statement on Form S-1
Submitted October
20, 2020
CIK No. 0001800637
Dear Mr. Krikov:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 1 to Draft Registration Statement on Form S-1
Prospectus Summary, page 1
1. We reissue comment 2 in
that you lengthened your summary, rather than making it more
precise. Please revise
the summary to be brief, concise, and to avoid repeating detailed
information provided
later in your document. We also note you deleted all references to
container farm. Please
explain to us what constituted your container farm product and
where it fit within
your company's history or where it fits today.
Niv Krikov
FirstName LastNameNiv Krikov
Agrify Corporation
Comapany 3,
November NameAgrify
2020 Corporation
November
Page 2 3, 2020 Page 2
FirstName LastName
2. We note your response to comment 3 regarding your main customers. In
an appropriate
section of your document, identify these customers, disclose the
material terms of your
agreements with them, and file the agreements as exhibits. Refer to
Items 101(c)(vii) and
601(b)(10)(ii)(B) of Regulation S-K.
Our Competitive Strengths, page 7
3. We reissue comment 6. Provide the data that supports your explanation
of your use of the
term "market leading technology," or revise the disclosure to clarify.
In addition, we note
you removed the descriptor "leading" with respect to Valiant-America;
however, you
revised the document to now refer to your Chinese supplier,
Inventronics, Inc., as a
"leading Asian Manufacturer." Provide the basis for this statement.
4. We note your response to comment 7. As it appears you substantially
rely on your deeply
integrated relationship with Inventronics, Inc., summarize the
agreement in an appropriate
section of your document and file it as an exhibit. Refer to Items
404(a) and 601(b)(ii)(B)
of Regulation S-K.
Industry Overview, page 8
5. We reissue comment 9. Please provide the third-party market data.
Summary Financial and Other Data, page 15
6. Please revise to include cost of sales as part of your statement of
operations data.
Certain Non-GAAP EBITDA and adjusted EBITDA Financial Measurements and
Reconciliation
to GAAP, page 16
7. Please refer to prior comment 16. We note your disclosure on page 16
continues to state
that the most directly comparable measures for your non-GAAP financial
measures are
net income and diluted net income per share. However, we see no
non-GAAP measures
presented or reconciled on a per share basis and diluted net income
per share is not
provided in the filing. As previously requested, revise to only
reference measures
presented and discussed in the filing.
Capitalization, page 38
8. Please revise the table to include debt as part of your
capitalization.
Acquisition of TriGrow, page 43
9. We note your revised disclosure in response to comment 21. Revise to
clarify what you
mean by a "form of a profits interest investment," without using the
term "profits interest
investment" in the definition. Clarify CCI's role in this investment,
i.e., why did you enter
into the contract with CCI to fulfill commitments to TriGrow's
shareholders. Also,
quantify the payments needed to reach an 18% internal rate of return,
and clarify how the
Niv Krikov
FirstName LastNameNiv Krikov
Agrify Corporation
Comapany 3,
November NameAgrify
2020 Corporation
November
Page 3 3, 2020 Page 3
FirstName LastName
amount payable both decreases to 20% and also terminates when you
attain the preferred
return.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 50
10. We reissue comment 23. Please explain under the terms of the joint
venture how income
is allocated between your company and Valiant.
11. We note the revised disclosure in response to comment 24. Further
clarify the cause of
your increase in selling, general and administrative expenses for the
six months ended
June 30, 2020 to $5,003,000 from $130,000 for the six months ended
June 30, 2019. The
primary factors you have listed only address $1,249,000 of expenses.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources, page 53
12. Please revise your discussion to also address your liquidity as of the
most recent balance
sheet included in the filing, e.g. June 30, 2020. Refer to Item 303(b)
of Regulation S-K.
Intellectual Property, page 79
13. We note you deleted the risk factor in response to comment 28. Tell us
what intellectual
property rights Agrify Brands LLC licenses from Holden Company. We may
have further
comment.
Financial Statements for the Period Ended June 30, 2020
Statements of Cash Flows, page F-23
14. Please refer to prior comment 33. We note from your response that the
$1.1 million is an
assumed obligation to invest in the profit interest agreement in the
amount of $1,140 and
is presented net of cash held by TriGrow at the time of acquisition.
Please revise Note 11
to explain the terms of the profit interest investment and clarify for
us why this is
considered a cash outflow in your statement of cash flows.
15. Please tell us how this obligation to invest $1,140 in the form of a
profit interest
investment is included in your interim balance sheet. If the amount is
offset against
another balance sheet account, describe how you have considered the
guidance in
ASC 210-20-45.
Note 1 Nature of Business and Basis of Presentation
Description of business, page F-24
16. We see that you hold 60% of Agrify Valiant LLC which was formed in
December 2019.
Revise the filing to provide the disclosures required by ASC
810-10-50-1A for this less-
than-wholly-owned subsidiary. Please also reconcile your disclosure on
page 8 that the
joint venture with Valiant -America generated 7.1% (or $350,000) in
total revenue in the
Niv Krikov
Agrify Corporation
November 3, 2020
Page 4
first six months of 2020 with your disclosure on page 57 that you have
not yet recognized
any revenue from the joint venture.
Note 2 - Summary of Significant Accounting Policies
Revenue Recognition, page F-26
17. We note your response to prior comment 34. To the extent you enter into
contractual
agreements with customers that include payment terms longer than one
year, please revise
to disclose your related accounting policies for the financing component.
You may contact Julie Sherman at (202) 551-3640 or Kevin Kuhar at (202)
551-3662 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Abby Adams at (202) 551-6902 or Mary Beth Breslin at (202) 551-3625
with any other
questions.
Sincerely,
FirstName LastNameNiv Krikov
Division of
Corporation Finance
Comapany NameAgrify Corporation
Office of Life
Sciences
November 3, 2020 Page 4
cc: David Levine, Esq.
FirstName LastName