0001213900-22-072289 | 10-Q | XBRL Viewer

Income (loss) attributable to non-controlling interests

(46,267)

(9,772)

(148,546)

(19,051)

(14)

153

Net loss attributable to Agrify Corporation

$ (46,268)

$ (9,758)

$ (148,551)

$ (19,204)

Net loss per share attributable to Common Stockholders – basic and diluted (in Dollars per share)

^[1]

$ (17.33)

$ (4.68)

$ (57.21)

$ (10.66)

Weighted-average common shares outstanding – basic and diluted (in Shares)

^[1]

2,670,501

2,083,439

2,596,649

1,806,874

[1]

Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Sep. 30, 2021

Income Statement [Abstract]

Net loss per share attributable to Common Stockholders – basic and diluted

$ 0

$ 5,215

$ 2,411

$ 21,570

^[1]

$ (3.51)

$ (4.68)

$ (4.00)

$ (10.66)

Weighted-average common shares outstanding – basic and diluted

^[1]

26,582,104

2,083,439

25,591,114

1,806,874

[1]

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

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Balance (in Shares) at Dec. 31, 2020

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($)
$ in Thousands

Common Stock

Preferred A Stock

Additional Paid-In Capital

^[1]

Accumulated Deficit

Total Stockholders’ Equity attributable to Agrify

Non- Controlling Interests

Total

Balance at Dec. 31, 2020

^[1]

$ 19,831

$ (26,510)

$ (6,679)

$ 225

$ (6,454)

421,168

^[1]

100,000

Beneficial conversion feature associated with amended Convertible Promissory Notes

^[1]

3,066

^[1]

3,869

Conversion of Convertible Notes

^[1]

13,100

Conversion of Convertible Notes (in Shares)

^[1]

169,707

Issuance of Common Stock – Initial Public Offering (“IPO”), net of fees

$ 1

^[1]

56,960

56,961

Issuance of Common Stock – Initial Public Offering (“IPO”), net of fees (in Shares)

^[1]

621,000

Issuance of Common Stock – Secondary public offering, net of fees

$ 1

^[1]

79,838

79,839

Issuance of Common Stock – Secondary public offering, net of fees (in Shares)

^[1]

638,889

Conversion of Preferred A Stock

^[1]

Conversion of Preferred A Stock (in Shares)

137,304

^[1]

(100,000)

Exercise of options

^[1]

721

Exercise of options (in Shares)

^[1]

25,279

^[1]

^[1]

24,023

Balance (in Shares) at Jun. 30, 2021

^[1]

(9,446)

167

(9,279)

Balance at Jun. 30, 2021

$ 2

^[1]

177,390

(35,956)

141,436

392

141,828

^[1]

2,037,370

Balance at Dec. 31, 2020

^[1]

19,831

(26,510)

(6,679)

225

(6,454)

Balance (in Shares) at Dec. 31, 2020

421,168

^[1]

100,000

Balance at Dec. 31, 2021

$ 2

^[1]

196,032

(58,975)

137,059

365

137,424

Balance (in Shares) at Dec. 31, 2021

^[1]

2,220,710

Balance at Jun. 30, 2021

$ 2

^[1]

177,390

(35,956)

141,436

392

141,828

Balance (in Shares) at Jun. 30, 2021

^[1]

2,037,370

Issuance of common shares in connection with acquisition

^[1]

941

^[1]

176

Issuance of common shares in connection with acquisition (in Shares)

^[1]

800

Exercise of options

^[1]

1,499

Exercise of options (in Shares)

^[1]

36,581

^[1]

51,387

Balance (in Shares) at Sep. 30, 2021

^[1]

(9,758)

(14)

(9,772)

Balance at Sep. 30, 2021

$ 2

^[1]

180,009

(45,714)

134,297

378

134,675

^[1]

2,126,138

Balance at Dec. 31, 2021

$ 2

^[1]

196,032

(58,975)

137,059

365

137,424

Balance (in Shares) at Dec. 31, 2021

^[1]

2,220,710

Issuance of Common Stock and warrants in private placement

^[1]

1,893

^[1]

25,797

Issuance of Common Stock and warrants in private placement (in Shares)

^[1]

245,035

Issuance of debt and warrants in private placement

^[1]

13,230

Acquisition of Lab Society

^[1]

1,903

Acquisition of Lab Society (in Shares)

^[1]

29,793

Exercise of options

^[1]

Exercise of options (in Shares)

^[1]

851

^[1]

162,754

Balance (in Shares) at Jun. 30, 2022

^[1]

(102,283)

^[1]

(102,279)

^[1]

Balance at Jun. 30, 2022

$ 2

^[1]

238,877

(161,258)

77,621

369

77,990

^[1]

2,659,143

Balance at Dec. 31, 2021

$ 2

^[1]

196,032

(58,975)

137,059

365

$ 137,424

Balance (in Shares) at Dec. 31, 2021

^[1]

2,220,710

Balance (in Shares) at Sep. 30, 2022

188,800

Balance at Sep. 30, 2022

$ 3

^[1]

242,549

(207,526)

35,026

370

$ 35,396

^[1]

2,691,008

Balance at Jun. 30, 2022

$ 2

^[1]

238,877

(161,258)

77,621

369

77,990

Balance (in Shares) at Jun. 30, 2022

^[1]

2,659,143

Issuance of common shares in connection with acquisition

^[1]

1,645

2,220

Issuance of common shares in connection with acquisition (in Shares)

8,704

Reclass of warrant liability

(194)

$ 1

^[1]

Issuance of restricted stock units (in Shares)

^[1]

3,161

20,000

Balance (in Shares) at Sep. 30, 2022

^[1]

(46,268)

(46,267)

Balance at Sep. 30, 2022

$ 3

^[1]

$ 242,549

$ (207,526)

$ 35,026

$ 370

$ 35,396

^[1]

2,691,008

[1]

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net loss attributable to Agrify Corporation	$ (148,551)	$ (19,204)
Adjustments to reconcile net loss attributable to Agrify Corporation to net cash used in operating activities:
Depreciation and amortization	2,602	508
Impairment on goodwill and intangible assets	69,904
Loss (gain) on extinguishment of notes payable, net	14,933	(2,685)
Change in fair value of warrant liability	(5,686)
Amortization of premium on investment securities	606	522
Amortization of debt discount	1,990
Interest on investment securities	(759)	(574)
Provision for doubtful accounts	23,708
Provision for slow-moving inventory	967
Debt issuance costs paid	(665)
Debt issuance costs amortized	389
Deferred income taxes	(262)
Compensation in connection with the issuance of stock options	3,538	4,007
Issuance of common shares in connection with acquisition		176
Non-cash interest (income) expense	(1,522)	50
Loss from disposal of fixed assets	6	25
Change in fair value of contingent consideration	(1,509)
Income attributable to non-controlling interests	5	153
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	1,217	(7,861)
Inventory	(20,129)	(5,227)
Prepaid expenses and other current assets	(2,760)	(3,523)
Prepaid and refundable taxes	(10)
Right-of-use assets, net	55	62
Other non-current assets	(1,275)
Accounts payable	378	7,906
Accrued expenses and other current liabilities	(8,128)	7,367
Deferred revenue, net	4,843	741
Net cash used in operating activities	(66,115)	(17,557)
Cash flows from investing activities
Purchases of property and equipment	(8,002)	(3,536)
Purchase of securities	(283,271)	(68,461)
Proceeds from the sale of securities	317,593
Issuance of loan receivables	(26,942)	(12,686)
Cash paid for business combination, net of cash acquired	(3,513)
Net cash used in investing activities	(4,135)	(84,683)
Cash flows from financing activities
Proceeds from issuance of debt and warrants in private placement	65,000
Proceeds from issuance of debt and warrants in private placement, net of fees	25,770
Proceeds from IPO, net of fees		56,961
Proceeds from Secondary public offering, net of fees		79,839
Proceeds from exercise of options	19	2,220
Proceeds from exercise of warrants	2	9
Proceeds from short-term loan payable	2,522
Repayment of debt and warrants in private placement	(30,000)
Repayments of notes payable, other	(2,685)
Payments of financing leases	(241)	(154)
Net cash provided by financing activities	60,387	138,875
Net increase in cash and cash equivalents	(9,863)	36,635
Cash and cash equivalents at the beginning of period	12,014	8,111
Cash and cash equivalents at the end of period	2,151	44,746
Cash, cash equivalents, and restricted cash at end of period
Cash and cash equivalents	2,151	44,746
Restricted cash	10,000
Total cash, cash equivalents, and restricted cash at the end of period	12,151	44,746
Supplemental disclosures of non-cash investing activities
Equipment sold for loan receivable to customer		$ 289

Overview, Basis of Presentation and Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Nature of Business and Basis of Presentation [Abstract]

Overview, Basis of Presentation and Significant Accounting Policies

Note 1 — Overview, Basis of Presentation and Significant Accounting Policies

Description of Business

Agrify Corporation (“Agrify” or the “Company”) is one of the most innovative providers of advanced cultivation and extraction solutions for the cannabis industry, bringing data, science, and technology to the forefront of the market. The Company’s proprietary micro-environment-controlled Agrify Vertical Farming Units (or “VFUs”) enable cultivators to produce the highest quality products with what it believes to be an unmatched consistency, yield, and Return on Investment at scale. The Company’s comprehensive extraction product line, which includes hydrocarbon, ethanol, solventless, post-processing, and lab equipment, empowers producers to maximize the quantity and quality of extract required for premium concentrates.

The Company believes it is the only company with an automated and fully integrated grow solution in the industry. The Company’s cultivation and extraction solutions seamlessly combines its integrated hardware and software offerings with a broad range of associated services including consulting, engineering, and construction and is designed to deliver the most complete commercial indoor farming solution available from a single provider. The totality of its product offerings and service capabilities forms an unrivaled ecosystem in what has historically been a highly fragmented market. As a result, the Company believes it is well situated to create a dominant market position in the indoor agriculture sector.

The Company was formed in the State of Nevada on June 6, 2016 as Agrinamics, Inc., and subsequently changed its name to Agrify Corporation. The Company is sometimes referred to herein by the words “we,” “us,” “our,” and similar terminology.

The Company has nine wholly-owned subsidiaries, which are collectively referred to as the “Subsidiaries”:

●

AGM Service Corp LLC (formerly AGM Service Corp Inc.);

●

TriGrow Systems, LLC (“TriGrow”, which acted as the Company’s exclusive distributor and which was acquired in January 2020 as TriGrow Systems, Inc. and converted to TriGrow Systems, LLC in May 2020);

●

Ariafy Finance, LLC;

●

Agxiom, LLC;

●

Harbor Mountain Holdings, LLC (“HMH”) (acquired in July 2020);

●

Cascade Sciences, LLC (“Cascade”) (which was acquired by the Company on October 1, 2021);

●

Precision Extraction NewCo, LLC (“Precision”) (which was a newly formed subsidiary in connection with the October 1, 2021 acquisition of Mass2Media, LLC, d/b/a PX2 Holdings, LLC, d/b/a Precision Extraction Solutions and Cascade); and

●

PurePressure, LLC (“PurePressure”) (which was acquired by the Company on December 31, 2021); and

●

Lab Society NewCo, LLC (“Lab Society”) (which was a newly formed subsidiary in connection with the February 1, 2022 acquisition of LS Holdings Corp).

The Company also has ownership interests in the following companies:

●

Teejan Podoponics International LLC (“TPI”) (the Company has owned 50% of TPI since December 2018);

●

Agrify-Valiant, LLC (“Agrify-Valiant”) (the Company is 60% majority owner and Valiant-America, LLC owns 40%, which was formed in December 2019. Subsequent to September 30, 2022, On October 27, 2022, the Company provided notice to Valiant-America, LLC of our intention to begin winding up of Agrify-Valiant); and

●

Agrify Brands, LLC (“Agrify Brands”) (formerly TriGrow Brands, LLC) (the Company owns 75% of Agrify Brands, which ownership position was created as part of the January 2020 acquisition of TriGrow).

Reverse Stock Split

On January 12, 2021, the Company effected a 1-for-1.581804 reverse stock split of its Common Stock, $0.001 par value per share (“Common Stock”). All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated.

On October 18, 2022, the Company effected a 1-for-10 reverse stock split of its Common Stock. All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated.

No fractional shares of Common Stock were issued as a result of these reverse stock splits. Any fractional shares in connection with these reverse stock splits were rounded up to the nearest whole share and no stockholders received cash in lieu of fractional shares. The reverse stock splits had no impact on the number of shares of Common Stock that the Company is authorized to issue pursuant to its articles of incorporation or on the par value per share of the Common Stock. Proportional adjustments were made to the number of shares of Common Stock issuable upon exercise or conversion of the Company's outstanding stock options and warrants, the exercise price or conversion price (as applicable) of the Company’s outstanding stock options and warrants, and the number of shares reserved for issuance under the Company’s equity incentive plan. All share and per share information included in this Quarterly Report on Form 10-Q has been retroactively adjusted to reflect the impact of these reverse stock splits.

Initial Public Offering and Secondary Public Offering

On February 1, 2021, the Company closed its initial public offering, or (“IPO”), of 621,000 shares of its Common Stock (inclusive of 81,000 shares of Common Stock from the full exercise of the over-allotment option of shares granted to the underwriters). The offer and sale of all of the shares in the IPO were registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form S-1 (File Nos. 333- 251616 and 333-252490), which was declared effective by the Securities Exchange Commission (“SEC”) on January 27, 2021. In the IPO, Maxim Group LLC and Roth Capital Partners acted as the underwriters. The IPO price for shares of Common Stock was $100.00 per share. The total gross proceeds from the IPO were $62.1 million.

After deducting underwriting discounts and commissions of $4 million and offering expenses paid or payable by us of approximately $1 million, the net proceeds from the IPO were approximately $57 million. The Company used the net proceeds from the IPO for its current working capital needs, to support revenue growth, increase inventory to meet customer demand forecasts, and support operational growth.

On February 19, 2021, the Company consummated a secondary public offering (the “February Offering”) of 555,556 shares of its Common Stock for a price of $135.00 per share, less certain underwriting discounts, and commissions. On March 22, 2021, the Company closed on the sale of an additional 83,333 shares of Common Stock on the same terms and conditions pursuant to the exercise of the underwriters’ over-allotment option. The exercise of the over-allotment option brought the total number of shares of Common Stock sold by the Company in connection with the February Offering to 638,889 shares and the total net proceeds received in connection with the February Offering to approximately $80 million, after deducting underwriting discounts and estimated offering expenses. The Company used the net proceeds from the IPO for its current working capital needs, to support revenue growth, increase inventory, meet customer demand forecasts, and support operational growth.

Coronavirus (“COVID-19”) Pandemic Impact and Uncertainties

The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty, and volatility that may negatively affect its business operations and financial results. As a result, if the pandemic or its effects persist or worsen, its accounting estimates and assumptions could be impacted in subsequent interim reports and upon final determination at year-end, and it is reasonably possible such changes could be significant (although the potential effects cannot be estimated at this time). The Company has experienced minimal business interruption as a result of the COVID-19 pandemic. The COVID-19 pandemic to date has resulted in supply chain delays of its inventory, higher operating costs and increased shipping costs, among other impacts. As events surrounding the COVID-19 pandemic can change rapidly, the Company cannot predict how it may disrupt its operations or the full extent of the disruption.

The Paycheck Protection Program

In May 2020, the Company received an unsecured Paycheck Protection Program Loan (“PPP Loan”) from the Bank of America pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), administered by the U.S. Small Business Administration (the “SBA”). The Company received total loan proceeds of approximately $779 thousand from the PPP Loan. The SBA denied the Company’s application for the forgiveness of the outstanding balance of the PPP Loan. On June 23, 2022, the Company received a letter from Bank of America agreeing to extend the maturity date to May 7, 2025 and bears interest at a rate of 1.00% per year. The PPP loan is payable in 34 equal combined monthly principal and interest payments of approximately $24 thousand that commenced on August 7, 2022.

Preparation of Condensed Consolidated Financial Statements

The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and filed with the SEC (“Form 10-K”), except for the recently adopted accounting pronouncements described below.

The condensed consolidated financial statements included herein reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021, condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, and the condensed consolidated cash flows for the nine months ended September 30, 2022 and 2021.

The condensed consolidated balance sheet as of December 31, 2021 is derived from the audited consolidated financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 31, 2022. The results for interim periods are not necessarily indicative of a full year’s results.

Basis of Presentation and Principles of Consolidation

Accounting for Wholly-Owned Subsidiaries

The accompanying consolidated financial statements have been prepared in accordance with GAAP and include the accounts of Agrify Corporation and its wholly-owned subsidiaries, as described above in Note 1 – Overview, Basis of Presentation and Significant Accounting Policies, in accordance with the provisions required by the Consolidation Topic 810 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The Company includes results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated.

Accounting for Less Than Wholly-Owned Subsidiaries

For the Company’s less than wholly-owned subsidiaries, which include TPI, Agrify-Valiant, and Agrify Brands, the Company first analyzes whether these entities are a variable interest entity (a “VIE”) in accordance with ASC Topic 810 Consolidation (“ASC810”), and if so, whether the Company is the primary beneficiary requiring consolidation. A VIE is an entity that has (i) insufficient equity to permit it to finance its activities without additional subordinated financial support or (ii) equity holders that lack the characteristics of a controlling financial interest. The financial results of a VIE are consolidated by the primary beneficiary, which is the entity that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that potentially could be significant to the entity. Variable interests in a VIE are contractual, ownership or other financial interests in a VIE that change with changes in the fair value of the VIE’s net assets. The Company continuously re-assesses (i) whether the joint-venture is a VIE, and (ii) if the Company is the primary beneficiary of the VIE. If it is determined that the joint-venture qualifies as a VIE and the Company is the primary beneficiary, the Company’s financial interest in the VIE is consolidated.

Based on the Company’s analysis of these entities, the Company has determined that Agrify-Valiant and Agrify Brands are each a VIE, and that the Company is the primary beneficiary. While the Company owns 60% of Agrify-Valiant’s equity interests and 75% of Agrify Brand’s equity interests, the remaining equity interests in Agrify-Valiant and Agrify Brands are owned by unrelated third parties, and the agreement with these third parties provides the Company with greater voting rights. Accordingly, the Company consolidates its interest in the financial statements of Agrify-Valiant and Agrify Brands under the VIE rules and reflects the third parties’ interests in the consolidated financial statements as a non-controlling interest. The Company records this non-controlling interest at its initial fair value, adjusting the basis prospectively for the third parties’ share of the respective consolidated investments’ net income or loss or equity contributions and distributions. These non-controlling interests are not redeemable by the equity holders and are presented as part of permanent equity. Income and losses are allocated to the non-controlling interest holders based on its economic ownership percentage. The investment in 50% of the shares of TPI is treated as an equity investment as the Company cannot exercise significant influence.

Going Concern

In accordance with the FASB Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements - Going Concern”, the Company’s management evaluated whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the financial statements’ issuance date. The following matters raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

The Company has incurred operating losses since its inception and has negative cash flows from operations. The Company also has an accumulated deficit of $207.5 million as of September 30, 2022. The Company's primary sources of liquidity are its cash and cash equivalents and marketable securities, with additional liquidity accessible, subject to market conditions and other factors, including limitations that may apply to the Company under applicable SEC regulations, from the capital markets, including under its at-the-market continuous equity offering (“ATM” or ATM Program”).

As of September 30, 2022, the Company had $12.5 million of cash, cash equivalents, marketable securities and restricted cash. The Company’s restricted cash is associated with its new senior secured note (the “Exchange Note”) was $10.0 million as of September 30, 2022. Current liabilities were $41.5 million as of September 30, 2022. Additional information regarding the Company’s Exchange Note may be found in Note 9 – Debt, included elsewhere in the notes to the consolidated financial statements.

Subsequent to the end of the third quarter of 2022, the Company entered into an agreement for the ATM Program with Canaccord Genuity LLC (the “Agent”), pursuant to which the Company may issue and sell, from time to time, shares of its Common Stock having an aggregate offering price of up to $50 million, depending on market demand, with the Agent acting as an agent for sales. The ATM allows for quick and agile sales of Common Stock to interested investors and provides an opportunity to raise additional capital for working capital requirements or to fund strategic opportunities that may present themselves from time to time. The Company has used, and intends to continue to use, the $15.1 million in net proceeds generated from the ATM Program as of November 7, 2022 for working capital and general corporate purposes, including repayment of indebtedness, funding the Company’s transformation initiatives and product category expansion efforts and capital expenditures. As of November 7, 2022, the Company had $34.4 million of remaining availability for future issuances of Common Stock under the ATM Program.

Additional information regarding the Company’s ATM Program and proceeds received subsequent to September 30, 2022, may be found in Note 19 – Subsequent Events, included elsewhere in the notes to the consolidated financial statements.

These financial statements have been prepared on a going concern basis, which implies the Company believes these conditions raise substantial doubt about its ability to continue as a going concern within the next twelve months from the date these financial statements are available to be issued. The Company’s continuation as a going concern is dependent upon its ability to obtain the necessary debt or equity financing to continue operations until the Company begins generating sufficient cash flows from operations to meet its obligations.

There is no assurance that the Company will ever be profitable. The financial statements do not include any adjustments to reflect the potential future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual of expenses. The Company bases its estimates on historical experience, known trends and other market-specific, other relevant factors that it believes to be reasonable under the circumstances and management’s judgement. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual financial results could differ from those estimates.

Fiscal Year

For the Company and its Subsidiaries, the fiscal year ends on December 31, each year.

Emerging Growth Company

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, (“JOBS Act”). As a result, the Company is permitted to, and intends to, rely on exemptions from certain disclosure requirements that are applicable to companies that are not emerging growth companies.

In addition, the JOBS Act provides that an “emerging growth company” can use the extended transition period for complying with new or revised accounting standards.

The Company will remain an “emerging growth company” until the earliest to occur of:

●

reporting $1.0 billion or more in annual gross revenues;

●

the issuance, in a three-year period, of more than $1.0 billion in non-convertible debt;

●

the end of the fiscal year in which the market value of Common Stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; or

●

December 31, 2026.

As of June 30, 2022, the market value of Common Stock held by non-affiliates did not exceed $700 million.

Reclassifications

Certain amounts in the Company’s prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. In this Form 10-Q, the Company has reclassified selling, general and administrative expenses to two separate line items in the accompanying consolidated statements of operations as general and administrative expenses and selling and marketing expenses for the three and nine months ended September 30, 2022 and 2021.

In addition, the Company effected a 1-for-10 reverse stock split of its Common Stock on October 18, 2022. All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated. The shares of Common Stock retained a par value of $0.001 per share. Accordingly, the stockholders’ deficit reflects the reverse stock split by reclassifying from “Common Stock” to “additional paid-in capital” an amount equal to the par value of the decreased shares resulting from the reverse stock split.

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents consist principally of cash and deposits with maturities of three months or less as of September 30, 2022 and December 31, 2021. All cash equivalents are carried at cost, which approximates fair value. Restricted cash represents cash required to be held as collateral for the Company’s Exchange Note. Accordingly, these balances contain restrictions as to their availability and usage and are classified as restricted cash in the consolidated balance sheets. Additional information relating to the Company’s Exchange Note may be found in Note 9 – Debt, included elsewhere in the notes to the consolidated financial statements.

Marketable Securities

The Company’s marketable security investments primarily include investments held in mutual funds, municipal bonds, and corporate bonds. The mutual funds are recorded at fair value in the accompanying consolidated balance sheets as part of cash and cash equivalents. The municipal and corporate bonds are considered to be held-to-maturity securities and are recorded at amortized cost in the accompanying consolidated balance sheets. The fair value of these investments was estimated using recently executed transactions and market price quotations. The Company considers current assets to be those investments that will mature within the next 12 months, including interest receivable on long-term bonds.

Accounts Receivable, Net

Accounts receivable, net, primarily consists of amounts for goods and services that are billed and currently due from customers. Accounts receivable balances are presented net of an allowance for credit losses, which is an estimate of billed amounts that may not be collectible. In determining the amount of the allowance at each reporting date, management makes judgments about general economic conditions, historical write-off experience, and any specific risks identified in customer collection matters, including the aging of unpaid accounts receivable and changes in customer financial conditions. Accounts receivable balances are written off after all means of collection are exhausted and the potential for non-recovery is determined to be probable. Adjustments to the allowance for credit losses are recorded as general and administrative expenses in the consolidated statements of operations.

Concentration of Credit Risk and Significant Customer

Financial instruments that potentially subject the Company to a concentration of credit risk primarily consist of cash, cash equivalents, restricted cash, and accounts receivable. Cash equivalents primarily consist of money market funds with original maturities of three months or less, which are invested primarily with U.S. financial institutions. Cash deposits with financial institutions, including restricted cash, generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts.

The tables below show customers who account for 10% or more of the Company’s total revenues and 10% or more of the Company’s accounts receivable for the periods presented:

Revenue

For the three months ended September 30, 2022 and 2021, the Company’s customers that accounted for 10% or more of the total revenue were as follows:

	Three Months Ended September 30, 2022					Three Months Ended September 30, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
New England Innovation Academy (“NEIA”) – Related Party		*		*		$	3,217		20.4	%
Greenstone Holdings (“Greenstone”) – Related Party		*		*		$	1,998		12.7	%
Company Customer Number – 71		*		*		$	3,174		20.2	%
Company Customer Number – 136	$	908		12.9	%	$	2,480		15.7	%
Company Customer Number – 139		*		*		$	4,006		25.4	%

*	Customer revenue, as a percentage of total revenue, was less than 10%

For the nine months ended September 30, 2022 and 2021, the Company’s customers that accounted for 10% or more of the total revenue were as follows:

	Nine Months Ended September 30, 2022					Nine Months Ended September 30, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
NEIA – Related Party		*		*		$	19,572		56.6	%
Company Customer Number – 71		*		*		$	3,520		10.2	%
Company Customer Number – 136	$	7,054		13.5	%		*		*
Company Customer Number – 139	$	8,590		16.4	%	$	4,006		11.6	%

*	Customer revenue, as a percentage of total revenue, was less than 10%

Accounts Receivable, Net

As of September 30, 2022 and December 31, 2021, the Company’s customers that accounted for 10% or more of the total accounts receivable, net, were as follows:

	As of September 30, 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	$	1,541		33.8	%	$	1,541		21.3	%
Company Customer Number - 15989	$	600		13.2	%		*		*
Company Customer Number - 16540	$	573		12.6	%		*		*
Company Customer Number - 185	$	526		11.5	%		*		*
Company Customer Number - 12237	$	510		11.2	%		*		*

*	Customer accounts receivable balance, as a percentage of total accounts receivable balance, was less than 10%

Inventories

The Company values all of its inventories, which consist primarily of significant raw material hardware components, at the lower of cost or net realizable value, with cost principally determined by the weighted-average cost method on a First-In, First-Out basis. Write-offs of potentially slow-moving or damaged inventory are recorded through specific identification of obsolete or damaged material. The company takes physical inventory at least once annually at all inventory locations.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are recognized using the straight-line method over the estimated useful life of each asset, as follows:

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

The estimated useful lives of the Company’s property and equipment are periodically assessed to determine if changes are appropriate. The Company charges maintenance and repairs to expenses as incurred. When the Company retires or disposes of assets, the carrying cost of these assets and related accumulated depreciation or amortization are eliminated from the consolidated balance sheet and any resulting gain or loss are included in the consolidated statements of operations in the period of retirement or disposal. Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service.

Goodwill

Goodwill is defined as the excess of cost over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is tested for impairment annually, and more frequently if events and circumstances indicate that the asset might be impaired. The Company has determined that it is a single reporting unit for the purpose of conducting the goodwill impairment assessment. A goodwill impairment charge is recorded if the amount by which the Company’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Factors that could lead to a future impairment include material uncertainties such as a significant reduction in projected revenues, a deterioration of projected financial performance, future acquisitions and/or mergers, and/or a decline in the Company’s market value as a result of a significant decline in the Company’s stock price.

Based on its interim testing, the Company noted that the carrying value of equity exceeded the calculated fair value by an amount greater than the aggregate value of our goodwill and intangible assets. Accordingly, the Company concluded that the entire carrying value of its goodwill and intangible assets should be impaired, resulting in a second-quarter impairment charge of $69.9 million. Additional information regarding the Company’s interim testing on goodwill may be found in Note 7 – Goodwill and Intangible Assets, Net, included elsewhere in the notes to the consolidated financial statements.

Intangible Assets

The Company initially records intangible assets at their estimated fair values and reviews these assets periodically for impairment. Identifiable intangible assets, which consist principally of acquired customer-related acquired assets, acquired and/or developed technology, non-compete agreements, and trade names, are reported net of accumulated amortization, and are being amortized over their estimated useful lives at amortization rates that are proportional to each asset’s estimated economic benefit. The Company’s intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The Company reviews the carrying value of these intangible assets annually, or more frequently if indicators of impairment are present.

The finite-lived useful lives are as follows:

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

In performing the review of the recoverability of intangible assets, the Company considers several factors, including whether there have been significant changes in legal factors or the overall business climate that could affect the underlying value of an asset. The Company also considers whether there is an expectation that the asset will be sold or disposed of before the end of its remaining estimated useful life. If, as the result of examining any of these factors, the Company concludes that the carrying value of the intangible asset exceeds its estimated fair value, the Company recognizes an impairment charge and reduces the carrying value of the asset to its estimated fair value.

Based on its interim testing, the Company noted that the carrying value of equity exceeded the calculated fair value by an amount greater than the aggregate value of our goodwill and intangible assets. Accordingly, the Company concluded that the entire carrying value of its goodwill and intangible assets should be impaired, resulting in a second-quarter impairment charge of $69.9 million. Additional information regarding the Company’s interim testing on intangible assets may be found in Note 7 – Goodwill and Intangible Assets, Net, included elsewhere in the notes to the consolidated financial statements.

Convertible Notes Payable

The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with ASC Topic 815 Derivatives and Hedging (“ASC815”). The accounting treatment of derivative financial instruments requires that the Company identify and record certain embedded conversion options (“ECOs”), certain variable-share settlement features, and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. Bifurcated embedded conversion options, variable-share settlement features and any related freestanding instruments are recorded as a discount to the host instrument which is amortized to interest expense over the life of the respective note using the effective interest method.

If the Company determines that an instrument is not a derivative liability, it then evaluates whether there is a beneficial conversion feature (“BCF”), by comparing the commitment date fair value to the effective current conversion price of the instrument. The Company records a BCF as a debt discount which is amortized to interest expense over the life of the respective note using the effective interest method. BCFs that are contingent upon the occurrence of a future event are recognized when the contingency is resolved.

Warrant Liabilities

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued private placement stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity (“ASC480”) and ASC815. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC480 and ASC815. Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC480, whether they meet the definition of a liability pursuant to ASC480, and whether the warrants meet all of the requirements for equity classification under ASC815, including whether the warrants are indexed to the Company’s own Common Stock among other conditions for equity classification.

For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that are precluded from equity classification, they are recorded as a liability at their initial fair value on the date of issuance and subject to remeasurement on each balance sheet date with changes in the estimated fair value of the warrants to be recognized as an unrealized gain or loss in the condensed consolidated statements of operations.

On August 18, 2022, the Company reached an agreement with its institutional lender to amend its existing Securities Purchase Agreement and entered into a Securities Exchange Agreement (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the Company issued a new warrant to purchase 1,422,764 shares of Common Stock (the “Note Exchange Warrant”) and modified an existing warrant (the “SPA Warrant”) to purchase up to an aggregate of 688,111 shares of Common Stock. The Company exchanged the SPA Warrant for a new warrant for the same number of underlying shares but with a reduced exercise price (the “Modified Warrants” and, collectively with the Note Exchange Warrant, the “Warrant Liabilities”). As of September 30, 2022, the Company had outstanding liability-classified Warrant Liabilities that allows the accredited investor (the “Investor”) to purchase 2,110,875 shares of the Company’s Common Stock. Additional information regarding the Exchange Agreement and Warrant Liabilities may be found in Note 4 – Fair Value Measures and Note 9 – Debt, included elsewhere in the notes to the condensed consolidated financial statements.

Debt Issue Costs and Debt Discount

The Company may record debt issuance costs and/or debt discounts in connection with issuing of debt. The Company may cover these costs by paying cash or issuing warrants. These costs are amortized to interest expense over the expected life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Original Issue Discount

For certain convertible debt issued by the Company, it may provide the debt holder with an original issue discount. The Company would record the original issue discount to debt discount, reducing the face amount of the note, and is then amortized to interest expense over the life of the debt.

Leases

The Company determines at the inception of a right-of-use asset contract if such arrangement is or contains a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company classifies leases at the lease commencement date as operating or finance leases and records a right-of-use asset and a lease liability on its consolidated balance sheet for all leases with an initial lease term of greater than 12 months. A lease with an initial term of 12 months or less is not recorded on the balance sheet, but related payments are recognized as an expense on a straight-line basis over the lease term.

The Company’s right-of-use asset contracts may contain both lease and non-lease components. Non-lease components may include maintenance, utilities, and other operating costs. The Company combines the lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, such as utilities or maintenance costs, are not included in the measurement of right-of-use assets and lease liabilities, but rather are expensed when the event determining the amount of variable consideration to be paid occurs.

Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of future lease payments over the expected lease term. The Company determines the present value of future lease payments by using its estimated secured incremental borrowing rate for that lease term as the interest rate implicit in the lease is not readily determinable. The Company estimates its secured incremental borrowing rate for each lease based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term.

Certain of the Company’s right-of-use asset leases include options to extend or terminate the lease. The amounts determined for the Company’s right-of-use assets and lease liabilities generally do not assume that renewal options or early-termination provisions, if any, are exercised unless it is reasonably certain that the Company will exercise such options.

Deferred Revenue

Deferred revenue includes amounts collected or billed in excess of revenue that it can recognize. The Company recognizes deferred revenue as revenue as the related performance obligation is satisfied. The Company records deferred revenue that will be recognized during the succeeding twelve-month period as a current liability on the consolidated balance sheet.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts receivable, accounts payable and accrued expenses. The estimated fair value of the accounts receivable and accounts payable approximates their carrying value due to the short-term nature of these instruments.

Stock-Based Compensation

The Company measures all stock options and other stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. Historically, the Company has issued stock options to employees, directors and consultants with only service-based vesting conditions and records the expense for these awards using the straight-line method.

The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified.

The Company estimates the fair value of each stock option grant on the date of the grant using the Black-Scholes option-pricing model. Before the IPO, the Company was a private company and therefore lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of similar publicly-traded companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

Business Combinations

The Company accounts for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed.

The Company’s management exercises significant judgments in determining the fair value of assets acquired and liabilities assumed, as well as intangibles and their estimated useful lives. Fair value and useful life determinations are based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in computing present values. These judgments may materially impact the estimates used in allocating acquisition date fair values to assets acquired and liabilities assumed, as well as the Company’s current and future operating results. Actual results may vary from these estimates which may result in adjustments to goodwill and acquisition date fair values of assets and liabilities during a measurement period or upon a final determination of asset and liability fair values, whichever occurs first. Adjustments to the fair value of assets and liabilities made after the end of the measurement period are recorded within the Company’s operating results.

For contingent consideration arrangements, the Company recognizes a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in the consolidated statements of operations. Additional information regarding the Company’s contingent consideration arrangements may be found in Note 4 – Fair Value Measures, included elsewhere in the notes to the consolidated financial statements.

Revenue Recognition

Overview

The Company generates revenue from the following sources: (1) equipment sales, (2) providing services and (3) construction contracts.

In accordance with ASC 606 “Revenue Recognition”, the Company recognizes revenue from contracts with customers using a five-step model, which is described below:

●

identify the customer contract;

●

identify performance obligations that are distinct;

●

determine the transaction price;

●

allocate the transaction price to the distinct performance obligations; and

●

recognize revenue as the performance obligations are satisfied.

Identify the customer contract

A customer contract is generally identified when there is approval and commitment from both the Company and its customer, the rights have been identified, payment terms are identified, the contract has commercial substance and collectability, and consideration is probable. Specifically, the Company obtains written/electronic signatures on contracts and a purchase order, if said purchase orders are issued in the normal course of business by the customer.

Identify performance obligations that are distinct

A performance obligation is a promise by the Company to provide a distinct good or service or a series of distinct goods or services. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.

Determine the transaction price

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer, excluding sales taxes that are collected on behalf of government agencies.

Allocate the transaction price to distinct performance obligations

The transaction price is allocated to each performance obligation based on the relative standalone selling prices (“SSP”) of the goods or services being provided to the customer. The Company’s contracts typically contain multiple performance obligations, for which the Company accounts for individual performance obligations separately, if they are distinct. The standalone selling price reflects the price the Company would charge for a specific piece of equipment or service if it was sold separately in similar circumstances and to similar customers.

Recognize revenue as the performance obligations are satisfied

Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer.

Significant Judgments

The Company enters into contracts that may include various combinations of equipment, services and construction, which are generally capable of being distinct and accounted for as separate performance obligations. Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Once the Company determines the performance obligations, it determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. The Company then allocates the transaction price to each performance obligation in the contract based on the SSP. The corresponding revenue is recognized as the related performance obligations are satisfied.

Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP based on the price at which the performance obligation is sold separately and the methods of estimating SSP under the guidance of ASC 606-10-32-33. If the SSP is not observable through past transactions, the Company estimates the SSP, taking into account available information such as market conditions, expected margins, and internally approved pricing guidelines related to the performance obligations. The Company licenses its software as a SaaS type subscription license, whereby the customer only has a right to access the software over a specified time period. The full value of the contract is recognized ratably over the contractual term of the SaaS subscription, adjusted monthly if tiered pricing is relevant. The Company typically satisfies its performance obligations for equipment sales when equipment is made available for shipment to the customer; for services sales as services are rendered to the customer and for construction contracts both as services are rendered and when contract is completed.

The Company utilizes the cost-plus margin method to determine the SSP for equipment and build-out services. This method is based on the cost of the services from third parties, plus a reasonable markup that the Company believes is reflective of a market-based reseller margin.

The Company determines the SSP for services in time and materials contracts by observable prices in standalone services arrangements.

The Company estimates variable consideration in the form of royalties, revenue share, monthly fees, and service credits at contract inception and updated at the end of each reporting period if additional information becomes available. Variable consideration is typically not subject to constraint. Changes to variable consideration were not material for the periods presented.

If a contract has payment terms that differ from the timing of revenue recognition, the Company will assess whether the transaction price for those contracts include a significant financing component. The Company has elected the practical expedient that permits an entity to not adjust for the effects of a significant financing component if the Company expects that at the contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service, will be one year or less. For those contracts in which the period exceeds the one-year threshold, this assessment, as well as the quantitative estimate of the financing component and its relative significance, requires judgment. Accordingly, the Company imputes interest on such contracts at an agreed-upon interest rate and will present the financing components separately as financial income. For the three months and nine months ended September 30, 2022 and 2021, the Company did not have any such financial income.

Payment terms with customers typically require payment 30 days from the invoice date. The Company’s agreements with its customers do not provide for any refunds for services or products and therefore no specific reserve for such is maintained. In the infrequent instances where customers raise concern over delivered products or services, the Company has endeavored to remedy the concern and all costs related to such matters have been insignificant in all periods presented.

The Company has elected to treat shipping and handling activities after the customer obtains control of the goods as a fulfillment cost and not as a promised good or service. Accordingly, the Company will accrue all fulfillment costs related to the shipping and handling of consumer goods at the time of shipment. The Company has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money. Sales, value add, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue.

The Company receives payment from customers based on specified terms that are generally less than 30 days from the satisfaction of performance obligations. There are no contract assets related to performance under the contract. The difference in the opening and closing balances of the Company’s deferred revenue primarily results from the timing difference between the Company’s performance and the customer’s payment. The Company fulfills obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. Accounts receivables are recorded when the customer has been billed or the right to consideration is unconditional. The Company recognizes deferred revenue when consideration has been received or an amount of consideration is due from the customer, and the Company has a future obligation to transfer certain proprietary products.

In accordance with ASC 606-10-50-13, the Company is required to include disclosure on its remaining performance obligations as of the end of the current reporting period. Due to the nature of the Company’s contracts, these reporting requirements are not applicable. The majority of the Company’s remaining contracts meet certain exemptions as defined in ASC 606-10-50-14 through 606-10-50-14A, including (i) performance obligation is part of a contract that has an original expected duration of one year or less and (ii) the right to invoice practical expedient.

The Company generally provides a one-year warranty on its products for materials and workmanship but may provide multiple-year warranties as negotiated, and will pass on the warranties from its vendors, if any, which generally covers this one-year period. In accordance with ASC 450-20-25, the Company accrues for product warranties when the loss is probable and can be reasonably estimated. The reserve for warranty returns is included in accrued expenses and other current liabilities in the Company’s consolidated balance sheets.

Research and Development Costs

The Company expenses research and development costs as incurred. Research and development expenses include payroll, employee benefits and other expenses associated with product development. The Company incurs research and development costs associated with the development and enhancement of both hardware and software products associated with its cultivation and extraction equipment, as well as its SaaS-based software offering, Agrify Insights™ cultivation software.

Capitalization of Internal Software Development Costs

The Company capitalizes certain software engineering efforts related to the continued development of Agrify Insights™ cultivation software under ASC 985-20. Costs incurred during the application development phase are only capitalized once technical feasibility has been established and the work performed will result in new or additional functionality. The types of costs capitalized during the application development phase include employee compensation, as well as consulting fees for third-party software developers working on these projects. Costs related to the research and development are expensed as incurred until technical feasibility is established as well as post-implementation activities. Internal-use software is amortized on a straight-line basis over the estimated useful life of the asset, which ranges from two to five years.

Shipping and Handling Charges

The Company incurs costs related to shipping and handling of its manufactured products. These costs are expensed as incurred as a component of cost of goods sold. Shipping and handling charges related to the receipt of raw materials are also incurred, which are recorded as a cost of the related inventory.

Equity Method Investments

Investments in affiliates that are 50% or less owned by the Company for which the Company exercises significant influence but does not have control are accounted for on the equity method. The Company has investments in equity investments without readily determinable fair values, which represents investments in entities where the Company does not have the ability to significantly influence the operations of the entities.

An assessment of whether or not the Company (as a holder of 50% of TPI) has the power to direct activities that most significantly impact TPI’s economic performance and to identify the party that obtains the majority of the benefits of the investment was performed as of September 30, 2022 and December 31, 2021 and will be performed as of each subsequent reporting date. After each of these assessments, the Company concluded that the activities that most significantly impact TPI’s economic performance are the growth, marketing, sale, and distribution of products using TPI’s technology and IP, each of which is solely directed by TPI. Based on the consideration of these assessments, the Company concluded that the Company’s investment in TPI should be accounted for under the equity method.

The carrying value of the Company’s investment in TPI was $0 as of September 30, 2022 and December 31, 2021. The Company did not recognize revenue from TPI for the three and nine months ended September 30, 2022 and September 30, 2021.

Income Taxes

The Company accounts for income taxes pursuant to the provisions of ASC Topic 740, “Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provisions of ASC 740-10-25-5, “Basic Recognition Threshold.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10-25-6, the benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of September 30, 2022, tax years 2017 through 2021 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years.

The Company recognizes the benefit of a tax position when it is effectively settled. ASC 740-10-25-10, “Basic Recognition Threshold” provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. ASC 740-10-25-10 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority. For tax positions considered effectively settled, the Company recognizes the full amount of the tax benefit.

Net Loss Per Share

The Company presents basic and diluted net loss per share attributable to Common Stockholders in conformity with the two-class method required for participating securities. The Company computes basic loss per share by dividing net loss available to Common Stockholders by the weighted-average number of common shares outstanding. Net loss available to Common Stockholders represents net loss attributable to Common Stockholders reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities as the holders of the participating securities do not have a contractual obligation to share in any losses. Diluted loss per share adjusts basic loss per share for the potentially dilutive impact of stock options and warrants. As the Company has reported losses for all periods presented, all potentially dilutive securities including stock options and warrants, are anti-dilutive, and accordingly, basic net loss per share equals diluted net loss per share.

Net loss per share calculations for all periods have been adjusted to reflect the reverse stock splits effected on January 12, 2021 and October 18, 2022. Net loss per share was calculated based on the weighted-average number of Common Stock outstanding.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in ASU No. 2020-06 simplify the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exceptions for contracts in an entity’s own equity. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption of this new accounting guidance had no impact on the Company’s consolidated financial position.

Pending Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), which introduces a new methodology for accounting for credit losses on financial instruments, including available-for-sale debt securities and accounts receivable. The guidance establishes a new “expected loss model” that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. Any expected credit losses are to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities. ASU 2016-13 is effective in the first quarter of fiscal 2024. The Company is currently evaluating the potential impact of this adoption on its consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 606): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements, if the acquiree prepared financial statements in accordance with GAAP. The amendment in this update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance should be applied prospectively to business combinations occurring on or after the effective date of the amendment in this update. The Company is currently evaluating the potential impact of this adoption on its consolidated financial statements and related disclosures.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Revenue and Deferred Revenue

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue and Deferred Revenue

Note 2 — Revenue and Deferred Revenue

Revenue

During the three and nine months ended September 30, 2022 and 2021, the Company generated revenue from the following sources: (1) equipment sales, (2) services sales and (3) construction contracts.

The Company sells its equipment and services to customers under a combination of a contract and purchase order. Equipment revenue includes sales from proprietary products designed and engineered by the Company such as Agrify Vertical Farming Units (“VFUs”), container farms, integrated grow racks, and LED grow lights, and non-proprietary products designed, engineered, and manufactured by third parties such as air cleaning systems and pesticide-free surface protection.

Construction contracts normally provide for payment upon completion of specified work or units of work as identified in the contract. Although there is considerable variation in the terms of these contracts, they are primarily structured as time-and-material contracts. The Company enters into time-and-materials contracts under which the Company is paid for labor and equipment at negotiated hourly billing rates and other expenses, including materials, as incurred at rates agreed to in the contract. The Company uses three main sub-contractors to execute the construction contracts.

The following table provides the Company’s revenue disaggregated by the timing of revenue recognition:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Transferred at a point in time	$	5,657	$	2,757	$	28,675	$	4,110
Transferred over time		1,362		12,994		23,694		30,474
Total revenue	$	7,019	$	15,751	$	52,369	$	34,584

In accordance with ASC 606-10-50-13, the Company is required to include disclosure on its remaining performance obligations as of the end of the current reporting period. Due to the nature of the Company’s contracts, these reporting requirements are not applicable, because the majority of the Company’s remaining contracts meet certain exemptions as defined in ASC 606-10-50-14 through 606-10-50-14A, including (i) performance obligation is part of a contract that has an original expected duration of one year or less and (ii) the right to invoice practical expedient.

The Company generally provides a one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated, and generally transfers to its customers the warranties it receives from its vendors, if any, which generally cover this one-year period. In accordance with ASC 450-20-25, the Company accrues for product warranties when the loss is probable and can be reasonably estimated. The Company maintains a reserve for warranty returns of $540 thousand and $398 thousand for September 30, 2022 and December 31, 2021, respectively. The Company’s reserve for warranty returns is included in accrued expenses and other current liabilities in its consolidated balance sheets. Additional information regarding the Company’s warranty reserve may be found in Note 3 – Supplemental Consolidated Balance Sheet Information, included elsewhere in the notes to the consolidated financial statements.

Deferred Revenue

Changes in the Company’s current deferred revenue balance for the nine months ended September 30, 2022 and the year ended December 31, 2021 were as follows:

(In thousands)	Nine Months Ended September 30, 2022			Year Ended December 31, 2021
Deferred revenue – beginning of period	$	3,772		$	152
Additions		18,167			3,758
Interest income on deferred revenue		—			4
Recognized		(11,803	)		(142	)
Deferred revenue – end of period	$	10,136		$	3,772

Deferred revenue balances primarily consist of customer deposits on its cultivation and extraction solutions equipment. As of September 30, 2022 and December 31, 2021, all of the Company’s deferred revenue balances were reported as current liabilities in the accompanying consolidated balance sheets.

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Supplemental Consolidated Balance Sheet Information [Abstract]

Supplemental Consolidated Balance Sheet Information

9 Months Ended

Sep. 30, 2022

Supplemental Consolidated Balance Sheet Information

Note 3 — Supplemental Consolidated Balance Sheet Information

Accounts Receivable

Accounts receivable consisted of the following as of September 30, 2022 and December 31, 2021:

(In thousands)	September 30, 2022			December 31, 2021
Accounts receivable, gross	$	7,684		$	8,637
Less allowance for doubtful accounts		(3,125	)		(1,415	)
Accounts receivable, net	$	4,559		$	7,222

NEIA, a related party, accounted for $0 and $3.5 million of the Company’s accounts receivable, net as of September 30, 2022 and December 31, 2021, respectively.

The changes in the allowance for doubtful accounts consisted of the following:

(In thousands)	Nine Months Ended September 30, 2022			Year Ended December 31, 2021
Allowance for doubtful accounts - beginning of period	$	1,415		$	54
Provision for doubtful accounts		1,938			1,187
Other adjustments		(228	)		174
Allowance for doubtful accounts - end of period	$	3,125		$	1,415

Bad debt expense was $385 thousand and $0 for the three months ended September 30, 2022 and 2021, respectively, and $1.9 million and $0 for the nine months ended September 30, 2022 and 2021, respectively.

Prepaid Expenses and Other Current Receivables

Prepaid expenses and other current receivables consisted of the following as of September 30, 2022 and December 31, 2021:

(In thousands)	September 30, 2022		December 31, 2021
Deferred costs	$	1,108	$	353
Prepaid insurance		931		492
Other receivables, other		603		86
Other note receivables ⁽¹⁾		584		807
Prepaid expenses, other		430		541
Prepaid materials		261		—
Prepaid software		188		173
Deferred issuance costs, net		191		—
Total prepaid expenses and other current assets	$	4,296	$	2,452

(1)	Other note receivables relate to the current portion of one of its loan receivable balances related to the total turn-key solution (“TTK Solution”) program.

Property and Equipment, Net

Property and equipment, net consisted of the following as of September 30, 2022 and December 31, 2021:

(In thousands)	September 30, 2022			December 31, 2021
Leasehold improvements	$	1,048		$	841
Machinery and equipment		1,048			898
Computer and office equipment		624			473
Leased equipment at customer		602			619
Furniture and fixtures		504			385
Software		300			174
Research and development of laboratory equipment		260			163
Vehicles		143			143
Trade show assets		79			80
Total property and equipment, gross		4,608			3,776
Accumulated depreciation		(1,930	)		(780	)
Construction in progress		10,530			3,236
Total property and equipment, net	$	13,208		$	6,232

Depreciation expense for the three months ended September 30, 2022 and 2021 was $409 thousand and $139 thousand, respectively, and $1.2 million and $337 thousand for the nine months ended September 30, 2022 and 2021, respectively.

Other Non-Current Assets

Other non-current assets consisted of the following as of September 30, 2022 and December 31, 2021:

(In thousands)	September 30, 2022		December 31, 2021
Long-term deferred commissions expense	$	1,293	$	1,101
Deferred debt issuance costs, non-current, net		454		—
Security deposits		152		83
Total other non-current assets	$	1,899	$	1,184

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of September 30, 2022 and December 31, 2021:

(In thousands)	September 30, 2022		December 31, 2021
Sales tax payable ⁽¹⁾	$	5,756	$	5,290
Accrued construction costs		5,661		8,803
Accrued acquisition liability ⁽²⁾		4,145		9,198
Compensation related fees		3,141		3,491
Accrued warranty costs		540		398
Accrued professional fees		448		1,104
Accrued interest expense		263		—
Accrued inventory purchases		243		201
Financing lease liabilities		153		156
Accrued consulting fees		90		75
Accrued non-income taxes		—		48
Other current liabilities		65		—
Total accrued expenses and other current liabilities	$	20,505	$	28,764

(1)

Sales tax payable primarily represents identified sales and use tax liabilities arising from the acquisition of Precision and Cascade. These amounts are included as part of the initial purchase price allocations and are the subject matter of an indemnification claim under the Precision and Cascade acquisition agreement.

(2)	Accrued acquisition liabilities include both the contingent consideration and the value of held-back Common Stock associated with the 2022 acquisition of Lab Society and the 2021 acquisition of PurePressure.

Warranty Accrual

The following table summarizes the activity related to the Company’s accrued liability for estimated future warranty costs:

(In thousands)	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
Warranty accrual – beginning of period	$	398	$	—
Liabilities accrued for warranties issued during period		142		398
Warranty accrual – end of period	$	540	$	398

Fair Value Measures

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measures

Note 4 — Fair Value Measures

Fair Values of Assets and Liabilities

In accordance with ASC Topic 820 “Fair Value Measurement”, the Company measures fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the assumptions that market participants would use in pricing an asset or liability (the inputs) are based on a tiered fair value hierarchy consisting of three levels, as follows:

	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.

Valuation techniques for assets and liabilities include methodologies such as the market approach, the income approach, or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain.

At September 30, 2022 and December 31, 2021, the Company’s assets and liabilities measured at fair value on a recurring basis were as follows:

	September 30, 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)	$	—	$	—	$	—	$	—	$	178	$	—	$	—	$	178
Municipal bonds		—		—		—		—		9,961		—		—		9,961
Corporate bonds		381		—		—		381		34,589		—		—		34,589
Total assets	$	381	$	—	$	—	$	381	$	44,728	$	—	$	—	$	44,728
Liabilities
Contingent consideration	$	—	$	—	$	643	$	643	$	—	$	—	$	6,137	$	6,137
Warrant liabilities		—		—		971		971		—		—		—		—
Total liabilities	$	—	$	—	$	1,614	$	1,614	$	—	$	—	$	6,137	$	6,137

Fair Value of Financial Instruments

The Company has certain financial instruments which consist of cash and cash equivalents, marketable securities, warrant liabilities, and contingent consideration. Fair value information for each of these instruments is as follows:

●

Cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and deferred revenue liabilities approximate their fair values based on the short-term nature of these instruments.

●

Marketable securities classified as current held-to-maturity securities are recorded at amortized cost, which at September 30, 2022, approximated fair value.

●

The Company’s deferred consideration was recorded in connection with acquisitions during the first quarter of 2022 and fiscal 2021 using an estimated fair value discount at the time of the transaction. As of September 30, 2022 and December 31, 2021, the carrying value of the deferred consideration approximated fair value, respectively.

●

The Company’s Warrant Liabilities are marked-to-market each reporting period with the changes in fair value of warrant liability are recorded to other income (expense), net in the accompanying consolidated statements of operations until the warrants are exercised. The fair value of the warrant liability is estimated using a Black-Scholes option-pricing model.

Marketable Securities

As of September 30, 2022, the Company held investments in mutual funds, municipal bonds and corporate bonds. The Company records mutual funds at fair value in the accompanying consolidated balance sheet as part of cash and cash equivalents. The municipal and corporate bonds are considered held-to-maturity securities and are recorded at amortized cost in the accompanying consolidated balance sheet. The fair values of these investments were estimated using recently executed transactions and market price quotations. The Company considers current assets as those investments which will mature within the next 12 months including, interest receivable on long-term bonds.

The composition of the Company’s marketable securities are as follows:

(In thousands)	September 30, 2022		December 31, 2021
Current marketable securities
Municipal bonds	$	—	$	9,961
Corporate bonds		381		34,589
	$	381	$	44,550

At September 30, 2022, marketable securities consisted of the following:

(In thousands)	Amortized cost		Unrealized loss			Estimated fair value
Current marketable securities (due within 1 year)
Corporate bonds	$	381	$	(10	)	$	371
	$	381	$	(10	)	$	371

At December 31, 2021, marketable securities consisted of the following:

(In thousands)	Amortized cost		Unrealized loss			Estimated fair value
Current marketable securities (due within 1 year)
Municipal bonds	$	9,961	$	(9	)	$	9,952
Corporate bonds		34,589		(72	)		34,517
	$	44,550	$	(81	)	$	44,469

Contingent Consideration

The Company has classified its net liability for contingent earn-out considerations to the sellers relating to one acquisition completed during the first quarter of 2022 and two acquisitions completed during fiscal 2021. The fair value for the contingent consideration associated with these acquisitions is within Level 3 of the fair value hierarchy because the associated fair value is determined using significant unobservable inputs, which included the key assumptions to model future revenue, costs of goods sold and operating expense projections. A description of the Company’s acquisitions completed during the first quarter of 2022 and fiscal 2021 are included within Note 8 – Business Combinations, included elsewhere in the notes to the consolidated financial statements.

(In thousands)	Nine Months Ended September 30, 2022			Year Ended December 31, 2021
Contingent consideration – beginning of period	$	6,137		$	—
Accrued contingent consideration		1,420			4,725
Accretion of contingent consideration		145			—
Payments made on contingent liabilities		(5,550	)		—
Change in estimated fair value		(1,509	)		1,412
Contingent consideration – end of period	$	643		$	6,137

The Company included contingent consideration within accrued expenses and other current liabilities in its consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively.

See below for additional information related to each acquisition’s contingent consideration.

Contingent Consideration – PurePressure

The Company, in its review of actual revenue performance as compared to its originally projected revenue estimates, noted that PurePressure’s revenue trend is materially below the originally estimated revenue trends incorporated into the Company’s original fair value estimates at the time of the acquisition. As a result, the Company has reduced its fair value estimate of achievement for PurePressure’s first earn-out period. During the third quarter ended September 30, 2022, the Company reduced the estimated fair value of the contingent consideration liability associated with PurePressure’s first earn-out period by approximately $602 thousand. As required by ASC Topic 805 Business Combination (“ASC805”), the change in contingent consideration was recorded as a reduction in operating expenses during the third quarter of 2022.

Contingent Consideration – Lab Society

The Company, in its review of actual revenue performance as compared to its originally projected revenue estimates, noted that Lab Society’s revenue trend is materially below the originally estimated revenue trends incorporated into the Company’s original fair value estimates at the time of the acquisition. As a result, the Company has reduced its fair value estimate of achievement for Lab Society’s first earn-out period. During the second quarter ended June 30, 2022, the Company reduced the estimated fair value of the contingent consideration liability associated with Lab Society’s first earn-out period by approximately $1.0 million. As required by ASC805, the change in contingent consideration was recorded as a reduction in operating expenses during the second quarter of 2022.

Contingent Consideration – Precision and Cascade

The earn-out period for the potential contingent consideration to be earned by the former members of Precision and Cascade concluded on December 31, 2021. The Company, during the second quarter of 2022, increased the amount of the contingent consideration earned by the former members of Precision and Cascade by approximately $121 thousand, to reflect the final contingent consideration amount due. This amount, as required by ASC805, was recorded as an increase in operating expenses during the second quarter of 2022. During the three-month period ended September 30, 2022, the Company made the final payment on the contingent consideration of approximately $5.6 million to the members of Precision and Cascade. Additional information regarding the Company’s final payment to Precision and Cascade may be found in Note 8 – Business Combination, included elsewhere in the notes to the consolidated financial statements.

Warrant liabilities

The estimated fair value of the Warrant Liabilities on September 30, 2022 is determined using Level 3 inputs. Inherent in a Black-Scholes option-pricing model are assumptions used in calculating the estimated fair values represent the Company’s best estimate. However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair values could be materially different.

The following table summarizes the Company’s assumptions used in the valuation of Warrant Liabilities for the nine months ended September 30, 2022:

Stock price at issuance	$	0.44
Option exercise price	$	1.23-$2.15
Expected term (Years)		5.50
Volatility		40.00	%
Discount rate (Treasury yield)		0.00%-4.06	%

The following table sets forth a summary of the changes in the fair value of the Level 3 Warrant Liabilities for the nine months ended September 30, 2022:

(In thousands)	Nine Months Ended September 30, 2022
Warrant liabilities – beginning of period	$	—
Initial fair value of warrant liabilities		6,657
Change in estimated fair value		(5,686	)
Warrant liabilities – end of period	$	971

Intangible Assets and Goodwill [Abstract]

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Loan Receivable

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Loan Receivable

Note 5 — Loan Receivable

A portion of the capital raised from the Company’s IPO has been allocated to launch the Company’s TTK Solution program. The TTK Solution is the industry’s first-of-its-kind program in which the Company engages with qualified cannabis operators in the early phases of their business plans and provides critical support, typically over a 10-year period, which includes: access to capital for construction costs, the design and build-out of their cultivation and extraction facilities, state-of-the-art cultivation and extraction equipment, subscription to the Company’s Agrify Insights™ cultivation software, process design, training, implementation, proven grow recipes, product formulations, data analytics, and consumer branding, which will enable the Company’s customers to go to market faster and better.

The loan agreements entered into with customers receiving the TTK Solution generally provide for loans with maturity dates of approximately two to three years after the completion of the construction projects. Typically, the TTK Solution construction loans have interest rates ranging from 12% to 18% per year.

During the quarter ended September 30, 2022, the Company provided a notice of default under the term loan agreement between the Company and Bud & Mary’s (the “Bud & Mary’s TTK Agreement”). On October 5, 2022, Bud & Mary’s Cultivation, Inc. (the “Bud & Mary’s”) filed a complaint in the Superior Court of Massachusetts in Suffolk County naming the Company as defendant. Bud & Mary’s is seeking, among other relief, monetary damages in connection with alleged unfair or deceptive trade practices, breach of contract and conversion arising from the Bud & Mary’s TTK Agreement. In response, the Company established a reserve of $14.7 million specifically related to Bud & Mary’s. The Company deemed it necessary to fully reserve the $14.7 outstanding balance due to the current litigation and the uncertainty of the customer’s ability to repay the outstanding balance. In addition, $5.3 million of the notes receivable balance for work performed during the third quarter of 2022 has been recorded as an unbilled note receivable and deferred the revenue to a future period. The Company has recognized the expenses associated with the work completed in the current period due to the uncertainty of the Company’s ability to recover the funds owed by the customer and its obligations to the vendors that have performed this work. The Company determined that it will only recognize unbilled notes receivable revenue if cash is collected from the customer in a future period. The Company believes that Bud & Mary’s claims have no merit and intends to defend itself vigorously. The Company is taking all necessary steps to pursue repayment from Bud & Mary’s and is taking all actions necessary to protect its shareholders’ interests.

During the quarter ended June 30, 2022, the Company established a reserve of approximately $7.1 million specifically related to Greenstone. The Company established the reserve based upon its review of Greenstone’s financial stability, which would impact collectability, which is primarily the result of unfavorable market conditions within the Colorado market. The Company will continue to monitor the operations of Greenstone in an effort to collect all outstanding receivables but due to the uncertain nature of Greenstone’s business at this time the Company has made the decision to place a reserve against the receivables. Greenstone is a related party as of September 30, 2022 and December 31, 2021.

The breakdown of loans receivable by customer as of September 30, 2022 and December 31, 2021 is as follows:

(In thousands)	September 30, 2022			December 31, 2021
Bud & Mary’s – TTK Solution	$	14,691		$	5,542
Greenstone – TTK Solution – Related Party		12,457			11,177
Company Customer Number 136 – TTK Solution		10,329			2,439
Company Customer Number 125 – TTK Solution		5,563			1,105
Company Customer Number 71 – Non-TTK Solution ⁽¹⁾		2,542			1,946
Company Customer Number 140 – TTK Solution		46			46
Other – Non-TTK Solutions		5,374			—
TTK Solution – Allowance for doubtful accounts ⁽²⁾		(21,770	)		—
Total loan receivable	$	29,232		$	22,255

(1)	The current portion of loan receivable are included within Note 3 – Supplemental Consolidated Balance Sheet Information, included elsewhere in the notes to the consolidated financial statements.

(2)	The Company established an allowance for doubtful accounts of approximately $14.7 million related to Bud & Mary’s ongoing litigation. The remaining balance of approximately $7.1 million relates to Greenstone consisting of capital advances, accrued interest and VFUs sales.

At this time, the Company is not aware of, nor has it identified any risk or potential performance failure associated with any of its other TTK Solution arrangements with the noted exception of Bud & Mary’s TTK Solution and Greenstone TTK Solution, as described above.

The Company analyzed whether any of the above customers are a VIE in accordance with ASC810 and if so, whether the Company is the primary beneficiary requiring consolidation. Based on the Company’s analysis, the Company has determined that Greenstone is a VIE. As of September 30, 2022, two of the Company’s employees own approximately 36.6% of the equity of Greenstone, however, since the Company is not the primary beneficiary and does not hold significant influence over Greenstone business decisions, the Company is not required to consolidate Greenstone.

Inventory

9 Months Ended

Sep. 30, 2022

Inventory [Abstract]

Inventory

Note 6 — Inventory

Inventories are stated at the lower of cost or net realizable value, with cost principally determined by the weighted-average cost method on a First-In, First-Out basis. Such costs include the acquisition cost for raw materials and operating supplies. The Company’s standard payment terms with suppliers may require making payments in advance of delivery of the Company’s products. The Company’s prepaid inventory is a short-term, non-interest-bearing asset that is applied to the purchase of products once they are delivered.

Inventory consisted of the following as of September 30, 2022 and December 31, 2021:

(In thousands)	September 30, 2022			December 31, 2021
Raw materials	$	17,130		$	6,393
Prepaid inventory		4,827			2,237
Finished goods		21,743			12,810
Inventory, gross		43,700			21,440
Inventory reserves		(1,909	)		(942	)
Total inventory, net	$	41,791		$	20,498

Inventory Reserves

The Company establishes an inventory reserve for obsolete, slow-moving, and defective inventory. The Company calculates inventory reserves for obsolete, slow-moving, or defective items as the difference between the cost of inventory and its estimated net realizable value. The reserves are based upon management’s expected method of disposition.

Changes in the Company’s inventory reserve are as follows:

(In thousands)	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
Inventory reserves – beginning of period	$	942	$	—
Increase in inventory reserves		967		942
Inventory reserves – end of period	$	1,909	$	942

Goodwill and Intangible Assets, Net

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets, Net

Note 7 — Goodwill and Intangible Assets, Net

Intangible assets are initially recorded at fair value and tested periodically for impairment. Goodwill represents the excess of the purchase price over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is tested at least annually for impairment. The Company performs its goodwill impairment testing annually during the fourth quarter, or sooner if indicators or if circumstances were to occur that would more likely than not reduce the fair value of the Company’s reporting unit below its carrying amount. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill.

The Company has concluded that there was an impairment-triggering event during the three months ended June 30, 2022 that required the Company to perform a detailed analysis of the current carrying value of its goodwill and intangible assets. For intangible asset and goodwill impairment testing purposes, the Company has one reporting unit.

During the three-month period ended June 30, 2022, the Company’s market capitalization fell below total net assets. In addition, financial performance continued to weaken during the quarter, which is contrary to prior experience. Management reassessed business performance expectations, following persistent adverse developments in equity markets, deterioration in the environment in which the Company operates, lower-than-expected sales, and an increase in operating expenses. These indicators, in the aggregate, required impairment testing for intangible assets and goodwill.

Based on the results of this testing, the Company determined that the carrying values of the aggregate value of its goodwill and intangible assets were not recoverable. The Company recorded impairment charges during the second quarter of 2022, representing a full impairment of the carrying value of its goodwill and intangible assets. The Company recorded an impairment charge of approximately $69.9 million, representing the carrying values of intangible assets and goodwill, which totaled $15.2 million and $54.7 million, respectively.

Goodwill consisted of the following:

(In thousands)	Nine Months Ended September 30, 2022			Year Ended December 31, 2021
Goodwill - beginning of period	$	50,090		$	632
Goodwill acquired during period		4,368			49,458
Goodwill impairment loss		(54,747	)		—
Goodwill purchase accounting adjustment		289			—
Goodwill - end of period	$	—		$	50,090

Intangible assets, net as of September 30, 2022 was as follows:

	Intangible Assets, Gross						Accumulated Amortization and Impairment									Intangible Assets, Net
(In thousands)	January 1, 2022		Additions		September 30, 2022		January 1, 2022			Expense and Impairments, net			September 30, 2022			January 1, 2022		September 30, 2022
Trade names	$	2,418	$	317	$	2,735	$	(227	)	$	(2,508	)	$	(2,735	)	$	2,191	$	—
Customer relationships		6,176		713		6,889		(302	)		(6,587	)		(6,889	)		5,874		—
Acquired developed technology		4,911		1,432		6,343		(191	)		(6,152	)		(6,343	)		4,720		—
Non-compete agreements		1,202		—		1,202		(60	)		(1,142	)		(1,202	)		1,142		—
Capitalized website costs		245		—		245		(100	)		(145	)		(245	)		145		—
Total intangible assets, net	$	14,952	$	2,462	$	17,414	$	(880	)	$	(16,534	)	$	(17,414	)	$	14,072	$	—

Intangible assets, net as of December 31, 2021 was as follows:

	Intangible Assets, Gross						Accumulated Amortization									Intangible Assets, Net
(In thousands)	January 1, 2021		Additions		December 31, 2021		January 1, 2021			Expense			December 31, 2021			January 1, 2021		December 31, 2021
Trade names	$	930	$	1,488	$	2,418	$	(88	)	$	(139	)	$	(227	)	$	842	$	2,191
Customer relationships		850		5,326		6,176		(89	)		(213	)		(302	)		761		5,874
Acquired developed technology		—		4,911		4,911		—			(191	)		(191	)		—		4,720
Non-compete agreements		—		1,202		1,202		—			(60	)		(60	)		—		1,142
Capitalized website costs		139		106		245		(48	)		(52	)		(100	)		91		145
Total intangible assets, net	$	1,919	$	13,033	$	14,952	$	(225	)	$	(655	)	$	(880	)	$	1,694	$	14,072

Amortization expense recorded in general and administrative in the consolidated statements of operations were $0 and $57 thousand for the three months ended September 30, 2022 and 2021, respectively, and $1.4 million and $172 thousand for the nine months ended September 30, 2022 and 2021, respectively.

Business Combination

9 Months Ended

Sep. 30, 2022

Business Combinations [Abstract]

Business Combination

Note 8 — Business Combination

Acquisition of Lab Society

On February 1, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Lab Society, a newly-formed wholly-owned subsidiary of the Company (“Merger Sub”), Michael S. Maibach Jr., as the Owner Representative thereunder, and each of the shareholders of Lab Society (collectively, the “Owners”), pursuant to which the Company agreed to acquire Lab Society. Concurrently with the execution of the Merger Agreement, the Company consummated the merger of Lab Society with and into Merger Sub, with Merger Sub surviving such merger as a wholly-owned subsidiary of the Company (the “Lab Society Acquisition”).

The aggregate consideration for the Lab Society Acquisition consisted of: $4.0 million in cash, subject to certain adjustments for working capital, cash, and indebtedness of Lab Society at closing; 42,561 shares of Common Stock (the “Buyer Shares”); and the Earn-out Consideration (as defined below), to the extent earned.

The Company withheld 12,768 of the Buyer Shares issuable to the Owners (the “Holdback Lab Buyer Shares”) for the purpose of securing any post-closing adjustment owed to the Company and any claim for indemnification or payment of damages to which the Company may be entitled under the Merger Agreement. During the third quarter of 2022, 2,785 of the Holdback Lab Buyer Shares were forfeited after the finalization of the net working capital settlement. The remaining 9,983 Holdback Lab Buyer Shares will be released following the twelve-month anniversary of the Closing Date in accordance with and subject to the conditions of the Merger Agreement.

The Merger Agreement includes customary post-closing adjustments, representations and warranties, and covenants of the parties. The Owners may become entitled to additional consideration with a value of up to $3.5 million based on the eligible net revenues achieved by the Lab Society business during the fiscal years ending December 31, 2022 and December 31, 2023, of which 50% will be payable in cash and the remaining 50% will be payable by issuing shares of Common Stock. Additional information regarding the Company’s contingent consideration arrangements may be found in Note 4 – Fair Value Measures, included elsewhere in the notes to the consolidated financial statements.

Transaction and related costs, consisting primarily of professional fees, related to the acquisition, totaled approximately $0 and $66 thousand for the three months and nine months ended September 30, 2022, respectively. All transaction and related costs were expensed as incurred and are included in general and administrative expenses.

The Company has prepared purchase price allocations for the business combination with Lab Society on a preliminary basis. Changes to those allocations may occur as additional information becomes available during the respective measurement period (up to one year from the acquisition date).

The following table sets forth the components and the allocation of the purchase price for the business combination:

(In thousands)
Purchase price consideration
Estimated closing proceeds	$	4,002
Transaction expenses		80
Closing buyer shares		1,904
Holdback buyer shares		816
Earn-out consideration		1,420
Estimated working capital adjustment		(255	)
Fair value of total consideration transferred		7,967
Total purchase price, net of cash acquired	$	7,402

Fair value allocation of purchase price
Cash and cash equivalents	$	565
Accounts receivable		511
Inventory		2,130
Prepaid expenses and other current receivables		55
Right - of-use assets, net		304
Property and equipment, net		177
Prepaid and refundable taxes		194
Accounts payable, accrued expenses, and other current liabilities		(1,244	)
Deferred revenue		(963	)
Deferred tax liability		(237	)
Finance lease liabilities, current		(36	)
Finance lease liabilities, non-current		(35	)
Operating lease liabilities, current		(112	)
Operating lease liabilities, non-current		(192	)
Acquired intangible assets		2,462
Goodwill		4,388
Total purchase price	$	7,967

Identified intangible assets consist of trade names, technology, and customer relationships. The fair value of intangible assets and the determination of their respective useful lives were made in accordance with ASC805 and are outlined in the table below:

(In thousands)	Asset Value		Useful Life
Identified intangible assets
Trade names	$	317		5 years
Acquired developed technology		1,432		8 years
Customer relationships		713		6 years
Total identified intangible assets	$	2,462

The Company’s initial fair value estimates related to the various identified intangible assets of Lab Society were determined under various valuation approaches including the Income Approach, Relief-from-Royalty Method, and Discounted Cash Flow Method. These valuation methods require management to project revenues, operating expenses, working capital investment, capital spending, and cash flows for the reporting unit over a multiyear period, as well as determine the weighted-average cost of capital to be used as a discount rate.

During the three-month period ended June 30, 2022, the Company identified an impairment-triggering event associated with both a sustained decline in the Company’s stock price and associated market capitalization, as well as a second-quarter slowdown in the cannabis industry as a whole. Due to these factors, the Company deemed that there was an impairment to the carrying value of its long-lived assets and accordingly performed interim testing as of June 30, 2022. Based on its interim testing, the Company noted that the entire carrying value of its goodwill and intangible assets should be impaired. Additional information regarding the Company’s interim testing on goodwill and intangible assets may be found in Note 7 – Goodwill and Intangible Assets, Net, included elsewhere in the notes to the consolidated financial statements.

The amount of revenue of Lab Society included in the consolidated statements of operations from the acquisition date of February 1, 2022 to September 30, 2022 was $4.0 million.

Acquisition of Precision and Cascade

On September 29, 2021 (the “Execution Date”), the Company entered into a Plan of Merger and Equity Purchase Agreement, as amended by an amendment dated October 1, 2021 (as amended, the “Purchase Agreement”), with Sinclair Scientific, LLC, a Delaware limited liability company (“Sinclair”), Mass2Media, LLC, Precision, a Michigan limited liability company; and each of the equity holders of Sinclair named therein (collectively, the “Sinclair Members”). On October 1, 2021, the Company consummated the transactions contemplated by the Purchase Agreement.

Subject to the terms and conditions set forth in the Purchase Agreement, (1) Sinclair transferred, to the Company, and the Company purchased (the “Interest Purchase”) from Sinclair, 100% of the equity interests of Cascade, a Delaware limited liability company, such that immediately after the consummation of such Interest Purchase, Cascade became a wholly-owned subsidiary of the Company, and (2) Precision merged (the “Merger”) with and into a newly-formed wholly-owned subsidiary of the Company, Precision Extraction NewCo, LLC.

The aggregate consideration for the Interest Purchase and the Merger consisted of: (a) the sum of $30 million in cash, plus consideration payable to holders of outstanding Sinclair equity awards, subject to certain adjustments for working capital, cash and indebtedness, payable in connection with the Interest Purchase; (b) the number of shares of Common Stock, subject to adjustment, equal to the quotient of (i) $20.0 million divided by (ii) the volume weighted-average price per share of Common Stock on The Nasdaq Capital Market for the 30 consecutive trading days ending on the Execution Date (the “VWAP Price”), issuable in connection with the Merger; and (c) the True-Up Buyer Shares, if any (as defined below), issuable in connection with the Merger.

The Purchase Agreement includes customary post-closing adjustments, representations and warranties and covenants of the parties. The Sinclair Members may become entitled to additional shares of Common Stock (the “True-Up Buyer Shares”) and cash (together with the True-Up Buyer Shares, the “Aggregate True-Up Payment) based on the eligible net revenues (as defined in the Purchase Agreement) achieved by the Cascade and Precision businesses during the fiscal year ending December 31, 2021. However, in no event shall the aggregate purchase price paid by the Company pursuant to the terms of the Purchase Agreement, taking into account any Aggregate True-Up Payment in favor of the Sinclair Members, exceed $65.0 million.

On August 10, 2022, the Company entered into a post-closing adjustment settlement agreement (“Agreement”) with Sinclair. The Agreement was entered into in connection with the Purchase Agreement. According to the Purchase Agreement, $2.5 million was held by the escrow agent as the Adjustment Escrow Amount, $4.5 million was held by the escrow agent as the Indemnity Escrow Amount and 11,760 Buyer Shares were held by the Company as the Holdback Buyer Shares. During the three-month period ended September 30, 2022, the Company made the final Aggregate True-up Payment of approximately $5.6 million, of which, $3.3 million was paid in cash and 8,704 Holdback Buyer Shares were released to the Sinclair Members and the Company received $1.4 million from the Adjustment Escrow Amount, and the remaining $1.1 million balance of the Adjustment Escrow Amount became part of the Indemnity Escrow Amount.

Transaction and related costs, consisting primarily of professional fees, related to the acquisition, totaled approximately $0 and $63 thousand for the three and nine months ended September 30, 2022, respectively. All transaction and related costs were expensed as incurred and are included in selling, general and administrative expenses.

The following table sets forth the components and the allocation of the purchase price for the business combination:

(In thousands)
Purchase price consideration
Cash paid to Sinclair Members at the close	$	23,000
Cash contributed to escrow accounts at the close		7,000
Cash paid for excess net working capital		1,430
Stock issued at the close		14,535
Fair value of contingent consideration to be achieved		3,953
Fair value of total consideration transferred		49,918
Total purchase price, net of cash acquired	$	48,630

Fair value allocation of purchase price
Cash and cash equivalents	$	1,288
Accounts receivable		897
Inventory		6,761
Prepaid expenses and other current receivables		1,736
Property and equipment, net		970
Right-of-use assets, net		730
Capitalized web costs, net		2
Accounts payable and accrued expenses		(9,223	)
Deferred revenue		(5,419	)
Long-term debt		(1,961	)
Operating lease liabilities, current		(392	)
Operating lease liabilities, non-current		(362	)
Acquired intangible assets		9,889
Goodwill		45,002
Total purchase price	$	49,918

Identified intangible assets consist of trade names, technology, non-compete agreements, and customer relationships. The fair value of intangible assets and the determination of their respective useful lives were made in accordance with ASC805 and are outlined in the table below:

(In thousands)	Asset Value		Useful Life
Identified intangible assets
Trade names	$	1,260		6 to 7 years
Acquired developed technology		3,818		5 years
Non-compete agreements		1,202		5 years
Customer relationships		3,609		7 to 8 years
Total identified intangible assets	$	9,889

The Company’s initial fair value estimates related to the various identified intangible assets were determined under various valuation approaches including the Income Approach, Relief-from-Royalty Method, and Discounted Cash Flow Method. These valuation methods require management to project revenues, operating expenses, working capital investment, capital spending and cash flows for the reporting unit over a multiyear period, as well as determine the weighted-average cost of capital to be used as a discount rate.

Acquisition of PurePressure

On December 31, 2021, the Company entered into a Membership Interest Purchase Agreement (the “Pure Purchase Agreement”) with PurePressure, LLC, a Colorado Limited liability company (“PurePressure”), and the members of PurePressure (collectively, the “Members”), Benjamin Britton as the Member Representative thereunder, and each of the Members. Concurrently with the execution of the Pure Purchase Agreement, the Company consummated the acquisition of all the outstanding equity interests of PurePressure, such that immediately after the consummation of such purchase, PurePressure became a wholly-owned subsidiary of the Company (the “Acquisition”).

The aggregate consideration for the Acquisition consisted of: (a) $4.0 million in cash, subject to certain adjustments for working capital, cash and indebtedness of PurePressure at closing; (b) 32,918 shares of Common Stock (the “Buyer Shares”); and (c) the Earn-out Consideration (as defined below), to the extent earned.

The Company withheld 8,888 of the Buyer Shares issuable to certain Members (the “Holdback Buyer Shares”) for the purpose of securing any post-closing adjustment owed to the Company and any claim for indemnification or payment of damages to which the Company may be entitled under the Pure Purchase Agreement. During the third quarter of 2022, 1,456 of the Holdback Buyer Shares were forfeited after the finalization of the net working capital settlement. The remaining 7,432 of the Holdback Buyer Shares will be released following the twelve-month anniversary of the Closing Date in accordance with and subject to the conditions of the Pure Purchase Agreement.

The Pure Purchase Agreement includes customary post-closing adjustments, representations and warranties and covenants of the parties. The Members may become entitled to additional consideration with a value of up to $3.0 million based on the eligible net revenues achieved by the PurePressure business during the fiscal years ending December 31, 2022 and December 31, 2023, of which 40% will be payable in cash and the remaining 60% will be payable by issuing shares of Common Stock (collectively, the “Earn-out Consideration”). Additional information regarding the Company’s contingent consideration arrangements may be found in Note 4 – Fair Value Measures, included elsewhere in the notes to the consolidated financial statements.

Subject to certain customary limitations, (i) the Members will indemnify the Company and its affiliates, officers, directors and other agents against certain losses related to, among other things, breaches of the Members’ and PurePressure’s representations and warranties, indebtedness, transaction expenses, pre-closing taxes and the failure to perform covenants or obligations under the Pure Purchase Agreement, and (ii) the Company will indemnify the Members and their respective affiliates, officers, directors and other agents against certain losses related to, among other things, breaches of the Company’s representations and warranties and the failure to perform covenants or obligations under the Pure Purchase Agreement.

Transaction and related costs, consisting primarily of professional fees, related to the acquisition, totaled approximately $0 and $563 thousand for the three and nine months ended September 30, 2022, respectively. All transaction and related costs were expensed as incurred and are included in general and administrative expenses.

The purchase price allocation for the business combination has been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement period (up to one year from the acquisition date).

The following table sets forth the components and the allocation of the purchase price for the business combination:

(In thousands)
Purchase price consideration
Estimated closing proceeds	$	3,613
Indebtedness paid		320
Transaction expenses		115
Closing buyer shares		2,211
Holdback buyer shares		654
Earn-out consideration		707
Estimated working capital adjustments		330
Fair value of total consideration transferred		7,950
Total purchase price, net of cash acquired	$	7,647

Fair value allocation of purchase price
Cash and cash equivalents	$	303
Accounts receivable, net		48
Inventory		1,537
Property and equipment, net		219
Right-of-use assets, net		191
Prepaid expenses and other current receivables		61
Other non-current assets		16
Accounts payable and accrued expenses		(765	)
Deferred revenue		(762	)
Operating lease liabilities, current		(117	)
Operating lease liabilities, non-current		(74	)
Finance lease liabilities, current		(4	)
Finance lease liabilities, non-current		(10	)
Notes payable, current		(260	)
Notes payable, non-current		(12	)
Acquired intangible assets		3,037
Goodwill		4,542
Total purchase price	$	7,950

(In thousands)	Asset Value		Useful Life
Identified intangible assets
Trade name	$	227		5 years
Acquired developed technology		1,093		8 years
Customer relationships		1,717		5 years
Total identified intangible assets	$	3,037

Debt

9 Months Ended

Sep. 30, 2022

Debt [Abstract]

Debt

Note 9 – Debt

The Company’s debt consisted of:

(In thousands)	September 30, 2022			December 31, 2021
Note payable – Exchange Note	$	35,000		$	—
PPP Loan		726			804
Navitas Loan		27			—
Other notes payable ⁽¹⁾		218			297
Total debt		35,971			1,101
Less: unamortized debt discount		(5,099	)		—
Total debt, net of debt discount		30,872			1,101
Less: current portion, net of current unamortized debt discount		(492	)		(1,089	)
Long-term debt	$	30,380		$	12

(1)	Other notes payable relates to a one-year insurance premium that was financed over nine months.

Note Payable

Securities Purchase Agreement

On March 14, 2022, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with the Investor, pursuant to which the Company agreed to issue and sell to the Investor, in a private placement transaction, in exchange for the payment by the Investor of $65 million, less applicable expenses, as set forth in the Securities Purchase Agreement, a senior secured promissory note in an aggregate principal amount of $65 million (the “SPA Note”), and a SPA Warrant to purchase up to an aggregate of 688,111 shares of Common Stock.

Securities Exchange Agreement

On August 18, 2022, the Company reached an agreement with its Investor to amend its existing senior SPA Note and entered into the Exchange Agreement. Pursuant to the Exchange Agreement, the Company partially paid $35.2 million under the SPA Note and exchanged the remaining balance of the SPA Note for an Exchange Note with an aggregate original principal amount of $35.0 million and a new Note Exchange Warrant to purchase 1,422,764 shares of Common Stock and modified an existing SPA Warrants to purchase up to an aggregate of 688,111 shares of Common Stock. The Company exchanged the SPA Warrant for a new warrant for the same number of underlying shares but with a reduced exercise price (the “Modified Warrants” and, collectively with the Note Exchange Warrant, the “Warrant Liabilities”). As of September 30, 2022, the Company had outstanding liability-classified Warrant Liabilities that allows the Investor to purchase 2,110,875 shares of the Company’s Common Stock. Additional information regarding the Company’s Warrant Liabilities may be found in Note 1 – Overview, Basis of Presentation and Significant Accounting Policies and Note 4 – Fair Value Measures, included elsewhere in the notes to the condensed consolidated financial statements.

The Exchange Note is a senior secured obligation of the Company and ranks senior to all indebtedness of the Company. The Exchange Note will mature on the three-year anniversary of its issuance (the “Maturity Date”) and contains a 9.0% annualized interest rate, with interest to be paid monthly, in cash, beginning September 1, 2022. The principal amount of the Exchange Note will be payable on the Maturity Date, provided that the Investor will be entitled to a cash sweep of 20% of the proceeds received by the Company in connection with any equity financing, which will reduce the outstanding principal amount under the Exchange Note.

At any time, the Company may prepay all of the Exchange Note by redemption at a price equal to 102.5% of the then-outstanding principal amount under the Note plus accrued but unpaid interest. The Investor will also have the option of requiring the Company to redeem the Exchange Note on the one-year or two-year anniversaries of issuance at a price equal to the then-outstanding principal amount under the Exchange Note plus accrued but unpaid interest, or if the Company undergoes a fundamental change at a price equal to 102.5% of the then-outstanding principal amount under the Exchange Note plus accrued but unpaid interest.

The Exchange Note imposes certain customary affirmative and negative covenants upon the Company, as well as covenants that restrict the Company and its subsidiaries from incurring any additional indebtedness or suffering any liens, subject to specified exceptions, restrict the ability of the Company and its subsidiaries from making certain investments, subject to specified exceptions, restrict the declaration of any dividends or other distributions, subject to specified exceptions, require the Company not to exceed maximum levels of allowable cash spend while the Exchange Note is outstanding, and require the Company to maintain minimum amounts of cash on hand. If an event of default under the Exchange Note occurs, the Investor can elect to redeem the Exchange Note for cash equal to 115% of the then-outstanding principal amount of the Note (or such lesser principal amount accelerated by the Investor), plus accrued and unpaid interest, including default interest, which accrues at a rate per year equal to 15% from the date of a default or event of default. As of September 30, 2022, the Company is in compliance with the financial debt covenants associated with its Exchange Note.

Until the date the Exchange Note is fully repaid, the Investor has, subject to certain exceptions, the right to participate for up to 30% of any offering of debt, equity (other than an offering of solely Common Stock), or equity-linked securities, including without limitation any debt, preferred stock or other instrument or security, of the Company or its subsidiaries.

The Modified Warrant have an exercise price of $21.50 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, will be exercisable on and after the six-month anniversary of issuance, have a term of five and one-half years from the date of issuance and will be exercisable on a cash basis, unless there is not an effective registration statement covering the resale of the shares issuable upon exercise of the Modified Warrant (the “Modified Warrant Shares”) or if shareholder approval for the full exercise of the Modified Warrant is not received, in which case the Modified Warrant will also be exercisable on a cashless exercise basis at the Investor’s election.

The Note Exchange Warrant have an exercise price of $12.30 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, were exercisable upon issuance, and have a term of five and one-half years from the date of issuance and will be exercisable on a cash basis, unless there is not an effective registration statement covering the resale of the shares issuable upon exercise of the Warrant (the “Note Exchange Warrant Shares” and, together with the Modified Warrant Shares, the “Exchange Warrant Shares”) or if shareholder approval for the full exercise of the Note Exchange Warrant is not received, in which case the Note Exchange Warrant will also be exercisable on a cashless exercise basis at the Investor’s election. Until the Company completes a qualified equity financing of at least $15.0 million, which requirement was satisfied with sales under the ATM Program, the Note Exchange Warrant’s exercise price would have been reduced to the extent the Company issues securities, subject to certain exceptions, for a lower purchase price. The Note Exchange Warrant also prohibited the Company, until following the completion of such qualified equity financing, from issuing warrants with more favorable or preferential terms and/or provisions.

The Warrant Liabilities will each provide that in no event will the number of shares of Common Stock issued upon exercise of such warrant result in the Investor’s beneficial ownership exceeding 4.99% of the Company’s shares of Common Stock outstanding at the time of exercise (which percentage may be decreased or increased by the Investor, but to no greater than 9.99%, and provided that any increase above 4.99% will not be effective until the sixty-first day after notice of such request by the Investor to increase its beneficial ownership limit has been delivered to the Company). Additionally, the Warrant Liabilities could be exercised for more than an aggregate of 530,858 shares of Common Stock unless and until shareholder approval is obtained, which approval was obtained on October 14, 2022.

The following table summarizes the short-term and long-term portions of the Exchange Note as of September 30, 2022:

(In thousands)	Short-Term		Long-Term			Notes Payable, Net
Direct issuance costs	$	191	$	454		$	645

Principal	$	—	$	35,000		$	35,000
Unamortized discount		—		(5,099	)		(5,099	)
Net carrying amount	$	—	$	29,901		$	29,901

As of September 30, 2022, future minimum principal payments were as follows:

Years ending December 31 (In thousands),

Remaining 2022	$	269
2023		303
2024		282
2025		35,117
2026 and thereafter		—
Total future payments	$	35,971

Paycheck Protection Program Loan

Paycheck Protection Program Loans under the Coronavirus Aid, Relief, and Economic Security Act

In May 2020, the Company entered into a PPP Loan with Bank of America pursuant to the PPP under the CARES Act administered by the SBA.

The Company received total proceeds of approximately $779 thousand from the unsecured PPP Loan, which was originally scheduled to mature on May 7, 2022. The SBA denied the Company’s submission to have the remaining $779 thousand PPP Loan forgiven. On June 23, 2022, the Company received a letter from Bank of America agreeing to extend the maturity date to May 7, 2025 and bears interest at a rate of 1.00% per year. The PPP loan is payable in 34 equal combined monthly principal and interest payments of approximately $24 thousand that commenced on August 7, 2022.

The breakdown of PPP Loan balances by current and non-current as of September 30, 2022 and December 31, 2021 were as follows:

(In thousands)	Balance Sheet Location	September 30, 2022		December 31, 2021
PPP Loan, current	Long-term debt, current	$	256	$	792
PPP Loan, non-current	Long-term debt		470		12
Total PPP Loan outstanding		$	726	$	804

PurePressure SBA Debt

As part of the acquisition of PurePressure, $159 thousand of debt remained outstanding from a standard SBA loan as of December 31, 2021. This debt has subsequently been paid as a part of the PurePressure acquisition.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Convertible Promissory Notes Abstract

Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Note 10 — Leases

Leases

The determination if any arrangement contained a lease at its inception was done based on whether or not the Company has the right to control the asset during the contract period. The lease term was determined assuming the exercise of options that were reasonably certain to occur. Leases with a lease term of 12 months or less at inception were not reflected in the Company’s balance sheet and those lease costs are expensed on a straight-line basis over the respective term. Leases with a term greater than 12 months were reflected as non-current right-of-use assets and current and non-current lease liabilities in the Company’s consolidated balance sheets.

As the implicit interest rate in its leases was generally not known, the Company’s used its incremental borrowing rate as the discount rate for purposes of determining the present value of its lease liabilities. At September 30, 2022 and December 31, 2021, the Company’s weighted-average discount rate utilized for its leases was 7.27% and 7.16%, respectively.

When a contract contained lease and non-lease elements, both were accounted as a single lease component.

The Company had several non-cancelable finance leases for machinery and equipment. The Company’s finance leases have remaining lease terms of one year to five years.

The Company had several non-cancelable operating leases for corporate offices, warehouses, showrooms, research and development facilities and vehicles. The Company’s leases have remaining lease terms of one year to five years, some of which include options to extend. Some leases include payment for communal area maintenance associated with the property.

Additional information on the Company’s operating and financing lease activity is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Operating lease cost	$	293	$	100	$	828	$	184
Finance lease cost:
Amortization of right-of-use assets		54		44		148		134
Interest on lease liabilities		7		10		26		32
Total lease cost	$	354	$	154	$	1,002	$	350

(In thousands)	Balance Sheet Location	September 30, 2022			December 31, 2021
Assets
Right-of-use assets, net	Right-of-use, net	$	2,470		$	1,479
Finance lease assets	Property and equipment, net		304			380
Total lease assets		$	2,774		$	1,859

Liabilities
Current:
Operating	Operating lease liabilities, current	$	822		$	814
Financing	Accrued expenses and other current liabilities		153			156
Non-current:
Operating	Operating lease liabilities, non-current		1,744			704
Financing	Other non-current liabilities		187			293
Total lease liabilities		$	2,906		$	1,967
Weighted-average remaining lease term – operating leases			3.68 years			3.11 years
Weighted-average remaining lease term – finance leases			2.50 years			2.36 years
Weighted-average discount rate – operating leases			6.70	%		8.03	%
Weighted-average discount rate – finance leases			7.84	%		6.29	%

Maturities of operating and finance lease liabilities as of September 30, 2022 are as follows:

Years ending December 31 (In thousands),	Operating Lease			Finance Lease

Remaining 2022	$	227		$	37
2023		921			182
2024		614			91
2025		493			51
2026		461			15
Thereafter		200			—
Total minimum lease payments		2,916			376
Less imputed interest		(350	)		(36	)
Total lease liabilities	$	2,566		$	340

Convertible Promissory Notes

9 Months Ended

Sep. 30, 2022

Convertible Promissory Notes

Note 11 — Convertible Promissory Notes

On January 11, 2021, the Company’s Board of Directors and shareholders approved the amendment to the conversion formula of the Convertible Promissory Notes (the “Convertible Notes”) issued by the Company on dates between August 2020 and November 2020. Pursuant to the amendment, immediately prior to the consummation of a public transaction, the outstanding principal amount of the Convertible Notes, together with all accrued and unpaid interest, shall convert into a number of fully paid and non-assessable shares of Common Stock, at a conversion price of $77.20 per share.

While the original conversion feature was bifurcated from the host instrument, the Company determined that the amended conversion feature would not require bifurcation. Since the accounting for the conversion feature changed because of the amendment, the Company applied extinguishment accounting pursuant to its accounting policy.

Accordingly, the Company recognized a gain on extinguishment of $2.7 million in connection with the derecognition of the net carrying amount of the extinguished debt of $19.6 million (inclusive of $13.1 million of principal, $7.1 million of derivative liabilities, less $587 thousand of debt discount) and the recognition of the $16.9 million fair value of the new convertible notes (including the same principal amount of $13.1 million plus the $3.8 million fair value of the beneficial conversion feature).

On February 1, 2021, in conjunction with the closing of the Company’s IPO, the Convertible Notes in the aggregate principal amount of $13.1 million were converted into 169,707 shares of Common Stock at the election of the Company at a conversion price of $77.20 per share.

Stockholders’ Equity

9 Months Ended

Sep. 30, 2022

Stockholders’ Equity [Abstract]

Stockholders’ Equity

Note 12 — Stockholders’ Equity

On July 11, 2022, the Company increased its authorized number of shares of Common Stock to 103,000,000, consisting of: 100,000,000 shares of Common Stock, and 3,000,000 shares of Preferred Stock. On January 9, 2020, the Company designated 100,000 shares of the 3,000,000 authorized shares of Preferred Stock, as Series A Convertible Preferred Stock (“Series A Preferred Stock”).

Series A Convertible Preferred Stock

Beginning in the first quarter of 2020, the Company issued an aggregate of 60,000 shares of Series A Preferred Stock, for an aggregate purchase price of $6.0 million. In May 2020, the Company completed an offering of Series A Preferred Stock with the issuance of an additional 40,000 shares of Series A Preferred Stock for an aggregate purchase price of $4.0 million.

Amendment of Conversion Formulas

On January 11, 2021, the Company’s Board of Directors approved the amendment to the conversion formula of the Series A Preferred Stock and Convertible Notes. After the amendment:

●

the Series A Preferred Stock is convertible, at any time after the issuance or immediately prior to the closing of a public transaction, into Common Stock in an amount of shares equal to (i) the product of the Series A Preferred Stock original price plus accrued but unpaid dividends on the shares being converted, multiplied by the number of shares of Series A Preferred Stock being converted, divided by (ii) a conversion price of $77.20 per share (after the reverse split taking effect); and

●

immediately prior to the consummation of a public transaction, the outstanding principal amount of the Convertible Notes together with all accrued and unpaid interest shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the quotient of (i) the outstanding principal amount of the Convertible Notes together with all accrued and unpaid interest thereunder immediately prior to such public transaction divided by (ii) a conversion price of $77.20 per share (after the reverse split taking effect).

On January 11, 2021, the Company’s shareholders approved the amendment to the Series A Preferred Stock.

Initial Public Offering

On February 1, 2021, the Company completed an IPO for the sale of 540,000 shares of Common Stock at a price of $100.00 per share. The Company also granted the underwriters: (a) a 45-day option to purchase up to 81,000 additional shares of Common Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the IPO, and (b) warrants to purchase 16,200 shares of Common Stock (equal to 3% of the aggregate number of shares of Common Stock issued in the IPO) at an exercise price of $125.00 per share (which is equal to 125% of the IPO price). Subsequently, the underwriters exercised the over-allotment option, and on February 4, 2021, the Company closed on the sale of an additional 81,000 shares of Common Stock for a price of $100.00 per share and granted to the underwriters warrants to purchase 2,430 additional shares of Common Stock (equal to 3% of the amount of shares issued as part of the exercised of the over-allotment option) at an exercise price of $125.00 per share. The exercise of the over-allotment option brought the total number of shares of Common Stock sold by the Company in connection with the IPO to 621,000 shares and the total net proceeds received in connection with the IPO to approximately $57.0 million, after deducting underwriting discounts and estimated offering expenses.

Immediately prior to the closing of the Company’s IPO, all outstanding shares of Series A Preferred Stock and Convertible Notes were converted into 137,304 shares of Common Stock and 169,707 shares of Common Stock, respectively, at a conversion price of $77.72 per share.

Subsequent Public Offering

On February 19, 2021, the Company consummated a secondary public offering (the “February Offering”) for the sale of 555,556 shares of Common Stock for a price of $135.00 per share. The Company also granted the underwriters: (a) a 45-day option to purchase up to 83,333 additional shares of Common Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the February Offering, and (b) warrants to purchase 16,667 shares of Common Stock (equal to 3% of the aggregate number of shares of Common Stock issued in the February Offering) at an exercise price of $168.75 per share (which is equal to 125% of the February Offering). Subsequently, the underwriters exercised the over-allotment option, and on March 22, 2021, the Company closed on the sale of an additional 83,333 shares of Common Stock for a price of $135.00 per share and granted to the underwriters warrants to purchase 2,500 additional shares of Common Stock (equal to 3% of the amount of shares issued as part of the exercised of the over-allotment option) at an exercise price of $168.75 per share. The exercise of the over-allotment option brought the total number of shares of Common Stock sold by the Company in connection with the February Offering to 638,889 shares and the total net proceeds received in connection with the February Offering to approximately $80.0 million, after deducting underwriting discounts and estimated offering expenses.

Underwriter Termination

On September 14, 2021, the Company entered into a letter agreement and waiver (the “Letter Agreement”), to amend the terms of its underwriting agreement with the representative of the underwriters in the IPO. Pursuant to the Letter Agreement, the representative agreed to waive the right of first refusal included in the underwriting agreement in consideration of a cash payment to the representative of $2.4 million and the right to participate as a co-manager with 10% of the economics with respect to the Company’s next public offering of securities, payable in cash upon the closing of such offering.

Private Placement

On January 25, 2022, the Company entered into a Securities Purchase Agreement (the “Securities Agreement”) with an institutional investor and other accredited investors for the sale by the Company of 245,035 shares (the “SA Shares”) of Common Stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 157,064 shares of Common Stock and warrants to purchase up to an aggregate of 301,575 shares of Common Stock (the “Common Warrants” and, collectively with the Pre-Funded Warrants, the “SA Warrants”), in a private placement offering. The combined purchase price for one share of Common Stock (or one Pre-Funded Warrant) and the accompanying fraction of a Common Warrant was $68.00 per share.

Subject to certain ownership limitations, the SA Warrants are exercisable six months from issuance. Each Pre-Funded Warrant was exercisable into one share of Common Stock at a price per share of $0.001 (as adjusted from time to time in accordance with the terms thereof). Each Common Warrant is exercisable into one share of Common Stock at a price per share of $74.80 (as adjusted from time to time in accordance with the terms thereof) and will expire on the fifth anniversary of the initial exercise date. The institutional investor that received the Pre-Funded Warrants fully exercised such warrants in March 2022.

Raymond Chang, Chairman and Chief Executive Officer of the Company, and Stuart Wilcox, who is currently the Chief Operating Officer, and at the time was a member of the Company’s Board of Directors, participated in the private placement on essentially the same terms as other investors, except for having a combined purchase price of $69.00 per share.

The gross proceeds to the Company from the private placement were approximately $27.3 million, before deducting the placement agent’s fees and other offering expenses, and excluding the proceeds, if any, from the exercise of the SA Warrants.

Issuance of Common Stock in Connection with Acquisitions

On October 1, 2021, the Company issued an aggregate of 66,640 shares of its Common Stock to the Precision and Cascade shareholders in connection with the Company’s acquisition of Precision and Cascade. On August 17, 2022, the Company issued an additional 8,704 shares of its Common Stock to the Precision and Cascade shareholders in connection with the finalization of the net working capital settlement. Refer to Note 8 – Business Combinations, included elsewhere in the notes to the consolidated financial statements.

On December 31, 2021, the Company issued an aggregate of 24,030 shares of its Common Stock to the PurePressure shareholders in connection with the Company’s acquisition of PurePressure. Refer to Note 8 – Business Combinations, included elsewhere in the notes to the consolidated financial statements.

On February 1, 2022, the Company issued an aggregate of 29,793 shares of its Common Stock to the Lab Society shareholders in connection with the Company’s acquisition of Lab Society. Refer to Note 8 – Business Combinations, included elsewhere in the notes to the consolidated financial statements.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Share-Based Payment Arrangement, Disclosure [Abstract]

Stock-Based Compensation and Employee Benefit Plans

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation and Employee Benefit Plans

Note 13 — Stock-Based Compensation and Employee Benefit Plans

2022 Omnibus Equity Incentive Plan

On April 29, 2022, the Company’s Board of Directors, and on June 8, 2022, the Company’s stockholders, adopted and approved the 2022 Omnibus Equity Incentive Plan (the “2022 Plan”), which replaced the 2020 Stock Option Plan (the “2020 Plan”). The 2022 Plan provides for the grant of stock options, stock appreciation right awards, performance share awards, restricted stock awards, restricted stock unit awards, other stock-based awards and cash-based awards. The aggregate number of shares of Common Stock that may be reserved and available for grant and issuance under the 2022 Plan is 529,665 shares, which includes the 200,000 shares authorized under the 2022 Plan, plus the rollover of 329,665 issued and outstanding awards under the 2020 Plan. Shares will be deemed to have been issued under the 2022 Plan solely to the extent actually issued and delivered pursuant to an award. If any award granted under the 2020 Plan or the 2022 Plan expires, is canceled, or terminates unexercised or is forfeited, the number of shares subject thereto is again available for grant under the 2022 Plan. The 2022 Plan shall continue in effect, unless sooner terminated, until the tenth anniversary of the date on which it is adopted by the Board of Directors.

Stock-based Compensation

The Company’s stock option compensation expense was $1.6 million and $941 thousand for the three months ended September 30, 2022 and 2021, respectively, and $3.5 million and $4.0 million for the nine months ended September 30, 2022 and 2021, respectively. There was $4.3 million of total unrecognized compensation cost related to unvested options granted under the Company’s options plans as of September 30, 2022. This stock option expense will be recognized through 2025.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying Common Stock, expected option life, and expected volatility in the market value of the underlying Common Stock. No stock options were granted during the nine months ended September 30, 2022.

The following table summarizes the Company’s assumptions used in the valuation of options granted during the year ended December 31, 2021:

Volatility	40	%
Risk-free interest rate	1.10% – 1.63	%
Dividend yield	0.00	%
0% Expected life (Years)	10
Forfeiture rate	0.00	%

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. The risk-free interest rate is based upon quoted market yields for United States Treasury debt securities with a term similar to the expected term. The expected dividend yield is based upon the Company’s history of having never issued a dividend and management’s current expectation of future action surrounding dividends. The Company calculates the expected volatility of the stock price based on the corresponding volatility of the Company’s peer group stock price for a period consistent with the underlying instrument’s expected term. The expected lives for such grants were based on the simplified method for employees and directors.

In arriving at stock-based compensation expense, the Company estimates the number of stock-based awards that will be forfeited due to employee turnover. The Company’s forfeiture assumption is based primarily on its employee turnover historical experience. If the actual forfeiture rate is higher than the estimated forfeiture rate, then an adjustment will be made to increase the estimated forfeiture rate, which will result in a decrease to the expense recognized in the Company’s financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, then an adjustment will be made to lower the estimated forfeiture rate, which will result in an increase to expense recognized in the Company’s financial statements. The expense the Company recognizes in future periods will be affected by changes in the estimated forfeiture rate and may differ significantly from amounts recognized in the current period.

As of September 30, 2022, there were 64,688 shares of Common Stock available to be granted under the Company’s 2022 Plan.

Stock Option Activity

The following table presents option activity under the Company’s stock option plans for the nine months ended September 30, 2022 and the year ended December 31, 2021:

(In thousands, except share and per share data)	Number of Options			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at December 31, 2020		313,311		$	35.10	$	—
Granted		152,002			121.30
Exercised		(65,763	)		32.30
Forfeited		(43,021	)		39.80
Canceled		(100	)		44.30
Options outstanding at December 31, 2021		356,429			71.80	$	12,572
Granted		—			—
Exercised		(851	)		22.92
Forfeited		(47,013	)		51.11
Canceled		(22,890	)		92.93
Options outstanding at September 30, 2022		285,675		$	73.66	$	—

Options vested and exercisable as of September 30, 2022		218,172		$	62.87
Options vested and expected to vest as of September 30, 2022		272,209		$	71.93

Restricted Stock Units

The following table presents restricted stock unit activity under the 2022 Plan for the nine months ended September 30, 2022:

	Number of Shares			Weighted- Average Grant Date Fair Value
Unvested at December 31, 2021		—		$	—
Granted		188,800			12.62
Vested		(20,000	)		19.20
Forfeited		(9,500	)		15.70
Unvested at September 30, 2022		159,300		$	12.46

2022 Employee Stock Purchase Plan

On April 29, 2022, the Company’s Board of Directors, and on June 8, 2022, the Company’s stockholders, adopted and approved the 2022 Employee Stock Purchase Plan ("ESPP"). The Company has initially reserved 50,000 shares of Common Stock for issuance under the ESPP. On September 30, 2022, 50,000 shares were available for future issuance.

Under the ESPP, eligible employees are granted options to purchase shares of Common Stock at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. Options to purchase shares are granted twice yearly on or about August 1 and February 1 and are exercisable on or about the succeeding January 31 and July 31, respectively, of each year. No participant may purchase more than $25 thousand worth of Common Stock annually. No Common Stock was granted under the 2022 ESPP during the nine months ended September 30, 2022.

Employee Benefit Plan

The Company maintains an employee’s savings and retirement plan under Section 401(k) of the Internal Revenue Code (the “401k Plan”). All full-time U.S. employees become eligible to participate in the 401k Plan. The Company’s contribution to the 401k Plan is discretionary. During the three and nine months ended September 30, 2022 and 2021, the Company did not contribute to the 401k Plan.

Stock Warrants

9 Months Ended

Sep. 30, 2022

Warrants Disclosure [Abstract]

Stock Warrants

Note 14 — Stock Warrants

The following table presents all warrant activity of the Company for the nine months ended September 30, 2022 and the year ended December 31, 2021:

	Number of Warrants			Weighted- Average Exercise Price
Warrants outstanding at December 31, 2020		82,817		$	0.20
Granted		37,797			14.72
Exercised		(93,430	)		6.07
Warrants outstanding at December 31, 2021		27,184			0.20
Granted		2,569,518			21.35
Exercised		(165,915	)		0.01
Warrants outstanding at September 30, 2022		2,430,787		$	22.57

The Company received proceeds from the exercise of warrants of less than $1 thousand and $4 thousand for the three months ended September 30, 2022 and September 30, 2021, respectively, and $2 thousand and $9 thousand for the nine months ended September 30, 2022 and 2021, respectively.

Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes [Abstract]

Income Taxes

Note 15 — Income Taxes

The Company’s effective income tax rate was 0.0% for both the three months ended September 30, 2022 and 2021. The income tax benefit was $0 for both the three months ended September 30, 2022 and 2021.

The Company’s effective income tax rate was 0.2% and 0.0% for the nine months ended September 30, 2022 and 2021, respectively. The income tax benefit was $262 thousand and $0 for the nine months ended September 30, 2022 and 2021, respectively. The difference between the Company’s effective tax rates for the 2022 and 2021 periods and the U.S. statutory tax rate of 21% was primarily due to a valuation allowance recorded against the Company’s deferred tax assets. The change in the income tax benefit for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily due to a discrete income tax benefit of $200 thousand recorded during the first quarter of 2022, which is attributable to a non-recurring partial release of the Company's U.S. valuation allowance as a result of the Lab Society acquisition. Additionally, as a result of the goodwill impairment charge recorded during the second quarter of 2022, the Company recognized a small benefit of $62 thousand related to the reversal of its opening deferred tax liability on indefinite-lived assets.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Commitments and Contingencies [Abstract]

Net Loss Per Share

9 Months Ended

Sep. 30, 2022

Net Loss Per Share [Abstract]

Net Loss Per Share

Note 16 — Net Loss Per Share

Net loss per share calculations for all periods have been adjusted to reflect the Company’s reverse stock splits. Net loss per share was calculated based on the weighted-average number of its Common Stock then outstanding.

Basic net loss per share is calculated using the weighted-average number of Common Stock outstanding during the periods. Net loss per share, assuming dilution, is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including Common Stock equivalents and convertible securities. Net loss per share, assuming dilution, is equal to basic net loss per share because the effect of dilutive securities outstanding during the periods, including options and warrants computed using the treasury stock method, is anti-dilutive.

The components of basic and diluted net loss per share were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except share and per share data)	2022			2021			2022			2021
Numerator:
Net loss attributable to Agrify Corporation	$	(46,268	)	$	(9,758	)	$	(148,551	)	$	(19,204	)
Accrued dividend attributable to Preferred A Stockholders		—			—			—			(61	)
Net loss available for Common Stockholders	$	(46,268	)	$	(9,758	)	$	(148,551	)	$	(19,265	)
Denominator:
Weighted-average common shares outstanding – basic and diluted ⁽¹⁾		2,670,501			2,083,439			2,596,649			1,806,874
Net loss per share attributable to Common Stockholders – basic and diluted ⁽¹⁾	$	(17.33	)	$	(4.68	)	$	(57.21	)	$	(10.66	)

(1)

The Company’s potential dilutive securities, which include stock options and warrants, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares equivalents presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

	September 30, 2022		December 31, 2021
Shares subject to outstanding Common Stock options		285,675		356,429
Shares subject to unvested restricted stock units		159,300		—
Shares subject to outstanding warrants		2,430,787		27,184
		2,875,762		383,613

Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies

Note 17 — Commitments and Contingencies

Legal Matters

Cooper and Weinstein Matter

On January 5, 2021, the Company received a demand letter from Nicholas Cooper and Richard Weinstein, (two of the Company’s former employees), and one of Mr. Cooper’s affiliated entities, asserting that Messrs. Cooper and Weinstein were entitled to compensation arising out of their employment by the Company, and their partial ownership of TriGrow Systems, LLC which had been acquired by the Company. The demand letter asserts that Messrs. Cooper and Weinstein are due certain sales commissions under their applicable bonus plan, equity earn-outs based on certain sales targets, and various equity purchases through the Company’s employee stock ownership plan. The demand letter also asserts various employment claims, including but not limited to, statutory wage withholding violations, wrongful termination, breach of contract, breach of the duty of good faith and fair dealing, fraud in the inducement, promissory estoppel, minority shareholder oppression, breach of fiduciary duty, unjust enrichment, and violations of state and federal securities laws.

On January 19, 2021, Messrs. Cooper and Weinstein filed a lawsuit against the Company in the United States District Court for the Western District of Washington, alleging the same claims made in their demand letter based on the facts disclosed above. The plaintiffs are seeking relief in the form of monetary damages in an amount to be determined. Messrs. Cooper and Weinstein are also seeking relief in the form of reinstatement and Mr. Weinstein is seeking rescission of his previously executed Release of Claims Agreement. On March 10, 2021, the Company moved to dismiss all Messrs. Cooper and Weinstein’s claims, asserting that the claims failed to allege legal grounds for relief. On May 12, 2021, a Magistrate issued a preliminary Report and Recommendation, which recommended dismissal of certain of Messrs. Cooper and Weinstein’s claims, and recommended others for additional factual discovery. On July 27, 2021, a District Judge entered an order partially adopting the Report and Recommendation, dismissing one claim with prejudice, dismissing a second claim with leave to amend, and permitting the remaining claims to proceed.

Additionally, on July 29, 2021, the Company filed a separate arbitration in Boston, Massachusetts against Messrs. Cooper and Weinstein, in which the Company alleges that Messrs. Cooper and Weinstein were liable for certain conduct during the time they were TriGrow employees, including breach of fiduciary duty, unjust enrichment, usurpation of corporate opportunity, conversion, fraudulent concealment, and false representation. Also on July 29, 2021, the Company submitted a claim for indemnification to certain legacy TriGrow Systems, LLC. shareholders. The claim for indemnification relates to conduct by Messrs. Cooper and Weinstein during the time they were TriGrow employees. During the third quarter of 2022, the Company and Messrs. Cooper and Weinstein settled all claims and potential claims between themselves and any affiliated entities by the Company to Messrs. Cooper and Weinstein, and a related entity for approximately $800 thousand.

United States Customs Seizure Matter

On June 28, 2022, the Company was notified by the United States Customs and Border Protection (“CBP”) that they seized 123 cartons of horticulture grow lights appraised at approximately $623 thousand at the Port of Savannah, Georgia based on CBP’s interpretation of certain importation laws which prohibit the importation of certain goods that are subject to health and safety legal restrictions, including a prohibition on the importation of drug paraphernalia, in accordance with 21 U.S.C. § 863(a). The Company is currently disputing the seizure. The Company does not believe these claims have any merit and intends to vigorously defend its position.

Commitments

Supply Agreement with Mack Molding Co.

In December 2020, the Company entered into a five-year supply agreement with Mack Molding Co. (“Mack”) pursuant to which Mack will become a key supplier of VFUs. In February 2021, the Company placed a purchase order with Mack amounting to approximately $5.2 million towards the initial production of VFUs during 2021. In September 2021, the Company increased the purchase order with Mack to approximately $11.5 million towards production of VFUs during 2021 and 2022. The Company believes the supply agreement with Mack will provide the Company with increased scaling capabilities and the ability to meet the potential future demand of its customers more efficiently. The supply agreement contemplates that, following an introductory period, the Company will negotiate a minimum percentage of the VFU requirements that the Company will purchase from Mack each year based on the agreed-upon pricing formula. The introductory period is not time-based but rather refers to the production of an initial number of units after which the parties have rights to adjust pricing and negotiate a certain minimum requirements percentage. The Company believes this approach will result in both parties making a more informed decision with respect to the pricing and other terms of the supply agreement with Mack.

Distribution Agreements with Related Party

On September 7, 2019, the Company entered into a distribution agreement with Bluezone Products, Inc. (“Bluezone”) for distribution rights to the Bluezone products with certain exclusivity rights. The agreement requires minimum purchases amounting to $480 thousand and $600 thousand for the first and second contract anniversary years. The agreement auto-renews for successive one-year periods unless earlier terminated. In March 2021, the Company notified Bluezone of the non-renewal of the agreement which means it ended on May 31, 2021. The Company exceeded the minimum purchase amount for the first year and purchased approximately $309 thousand of the committed $660 thousand second-year purchases through December 31, 2021. Bluezone is a related party to the Company.

Committed Purchase Agreement with Related Party – Greenstone

On December 29, 2021, Greenstone purchased 239 VFUs from the Company of which 60 VFUs were already in Greenstone’s possession under a lease agreement. Under the lease agreement, Greenstone owed the Company a production service fee of $300 per pound of flower produced and contained an option to purchase the equipment within the lease agreement. The term of this agreement was for ten years, but it was terminated upon signing the purchase agreement for the 239 VFUs. There is no remaining obligation under the lease agreement. The remaining 179 VFUs were shipped to the Greenstone storage facility on December 30, 2021 and December 31, 2021. Greenstone is a related party to the Company. Additional information regarding recent developments with Greenstone may be found in Note 5 – Loan Receivable, included elsewhere in the notes to the consolidated financial statements.

Committed Purchase Agreement with Related Party – Ora Pharm

In June 2022, the Company entered into an agreement with Ora Pharm (“Ora”) pursuant to which Ora will purchase approximately $1.6 million in equipment from the Company, and Ora may purchase software services from the Company in the future. Mr. Wilcox is the Chairman of Ora. Mr. Wilcox has not had an interest in any transaction since the beginning of the Company’s last fiscal year, or any currently proposed transaction. There are no family relationships among any of the Company’s directors or executive officers and Mr. Wilcox.

Other Commitments and Contingencies

The Company is potentially subject to claims related to various non-income taxes (such as sales, value-added, consumption, and similar taxes) from various tax authorities, including in jurisdictions in which the Company already collects and remits such taxes. If the relevant taxing authorities successfully pursue these claims, the Company could be subject to additional tax liabilities.

Refer to Note 9 – Debt, included elsewhere in the notes to the consolidated financial statements for details of the Company’s future minimum debt payments. Refer to Note 10 – Leases, included elsewhere in the notes to the consolidated financial statements for details of the Company’s future minimum lease payments under operating and financing lease liabilities. Refer to Note 15 – Income Taxes, included elsewhere in the notes to the consolidated financial statements for information regarding income tax contingencies.

Related Parties

9 Months Ended

Sep. 30, 2022

Related Parties [Abstract]

Related Parties

Note 18 — Related Parties

Some of the officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available.

The following table describes the net purchasing (sales) activity with entities identified as related parties to the Company:

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2022		2021			2022			2021
Bluezone	$	—	$	217		$	5		$	310
4D Bios ⁽¹⁾		—		864			—			1,311
Enzo		—		40			—			40
Cannae Policy Group		—		—			25			—
Topline Performance Group		1		—			71			—
NEIA		—		(3,217	)		(1,763	)		(19,572	)
Greenstone		212		(1,998	)		392			(1,998	)
Valiant Americas, LLC		1,315		606			11,120			2,323
Living Greens Farm		—		—			—			(58	)

(1)

Purchases from 4D for the nine months ended September 30, 2021 include $384 thousand for a down payment on inventory orders.

The following table summarizes net related party receivable (payable) as of September 30, 2022 and December 31, 2021:

(In thousands)	September 30, 2022			December 31, 2021
Cannae Policy Group	$	—		$	(8	)
Cannaquip		—			(21	)
Greenstone (net of allowance for doubtful accounts of $7,079 and $0 at September 30, 2022 and December 31, 2021, respectively) ⁽¹⁾		5,308			11,177
Living Greens Farm ⁽²⁾		—			34
NEIA		—			3,500
Valiant Americas, LLC		(599	)		(922	)
Topline Performance Group		(1	)		—

(1)

The Greenstone allowance for doubtful accounts balance consisted of capital advances, accrued interest and VFUs sales. Additional information regarding recent developments with Greenstone may be found in Note 5 – Loan Receivable, included elsewhere in the notes to the consolidated financial statements.

(2)

The balance was fully reserved at September 30, 2022 due to an ongoing dispute with the customer.

Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

Note 19 — Subsequent Events

Bud & Mary’s Litigation

On September 15, 2022, the Company provided a notice of default to Bud & Mary’s and certain related parties notifying such parties that Bud & Mary’s was in default of its obligations under the Bud & Mary TTK Agreement. On October 5, 2022, Bud & Mary’s filed a complaint in the Superior Court of Massachusetts in Suffolk County naming the Company as defendant. Bud & Mary’s is seeking, among other relief, monetary damages in connection with alleged unfair or deceptive trade practices, breach of contract and conversion arising from the Agreement. While the Company believes the claim is without merit and will continue to vigorously defend itself against Bud & Mary’s allegations, litigation is inherently unpredictable and there can be no assurance that the Company will prevail in this matter.

During the third quarter of 2022, the Company deemed it necessary to fully reserve for the outstanding $14.7 million note receivable balance outstanding due to the current litigation and the uncertainty of the customer’s ability to repay the outstanding balance. The $14.7 million represents the amount of the contingent loss that the Company has determined to be reasonably possible and estimable. The actual cost of resolving this matter may be higher or lower than the amount the Company has reserved. In addition, $5.3 million of the notes receivable balance for work performed during the third quarter of 2022 has been recorded as an unbilled note receivable and deferred the revenue to a future period. The Company has recognized the expenses associated with the work completed in the current period due to the uncertainty of the Company’s ability to recover the funds owed by the customer and its obligations to the vendors that have performed this work. The Company determined that it will only recognize unbilled notes receivable revenue if cash is collected from the customer in a future period.

Approval of Issuance of Shares Upon Exercise of Warrants

On October 14, 2022, the Company received approval for the issuance of up to 2,110,875 shares of Common Stock upon the exercise of the SPA Warrant and Note Exchange Warrant in connection with the issuance of a senior secured note and the exchange of previously issued warrants in August 2022, and the reduction of the exercise price of certain of those warrants under certain circumstances, was approved. Additional information regarding the Warrant Liabilities may be found in Note 9 – Debt, included elsewhere in the notes to the consolidated financial statements.

Reverse Stock Split

On October 18, 2022, the Company effected a 1-for-10 reverse stock split of its Common Stock. All owners of record as of October 18, 2022 received one issued and outstanding share of the Company’s Common Stock in exchange for ten outstanding shares of the Company’s Common Stock. Additional information regarding the reverse stock splits may be found in Note 1 – Overview, Basis of Presentation and Significant Accounting Policies, included elsewhere in the notes to the consolidated financial statements.

At The Marketing Offering

In October 2022, the Company entered into the ATM Program with the Agent. The ATM Program allows the Company to sell shares of Common Stock pursuant to specific parameters defined by the Company as well as those defined by the SEC and the ATM Program agreement. Subsequent to the quarter ended September 30, 2022, as of November 7, 2022, the Company sold 6,132,565 shares of Common Stock, under the ATM at an average price of $2.54 per share, resulting in gross proceeds to the Company of $15.6 million, and net proceeds of $15.1 million after commissions and fees to the Agent totaling $468 thousand. $3.1 million of the proceeds under the ATM Program were used to repay amounts due to the Investor under the Exchange Note. The ATM allows for quick and agile sales of Common Stock to interested investors and provides an opportunity to raise additional capital for working capital requirements or to fund strategic opportunities that may present themselves from time to time. The Company has used, and intends to continue to use, the net proceeds generated from the ATM Program for working capital and general corporate purposes, including repayment of indebtedness, funding its transformation initiatives and product category expansion efforts and capital expenditures.

Nasdaq Deficiency Notice

On October 4, 2022, the Company received a deficiency letter (the “Notice”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the bid price for the Company’s Common Stock had closed below $1.00 per share, which is the minimum closing price required to maintain a continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company had 180 calendar days to regain compliance with the Minimum Bid Requirement. To regain compliance with the Minimum Bid Requirement, the closing bid price of the Company’s Common Stock must be at least $1.00 per share for a minimum of 10 consecutive trading days during this 180-day compliance period, unless the Staff exercises its discretion to extend the minimum trading day period pursuant to Nasdaq Listing Rule 5810(c)(3)(G). On October 28, 2022, the Staff notified the Company that the closing bid price for its Common Stock was more than $1.00 for 10 consecutive trading days, and that the Company therefore regained compliance with the Minimum Bid Requirement.

Agrify-Valiant

On October 27, 2022, the Company provided notice to Valiant-America, LLC that the Company intended to begin the winding up of Agrify-Valiant.

Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Description of Business

Description of Business

The Company has nine wholly-owned subsidiaries, which are collectively referred to as the “Subsidiaries”:

●

AGM Service Corp LLC (formerly AGM Service Corp Inc.);

●

Ariafy Finance, LLC;

●

Agxiom, LLC;

●

Harbor Mountain Holdings, LLC (“HMH”) (acquired in July 2020);

●

Cascade Sciences, LLC (“Cascade”) (which was acquired by the Company on October 1, 2021);

●

PurePressure, LLC (“PurePressure”) (which was acquired by the Company on December 31, 2021); and

●

Lab Society NewCo, LLC (“Lab Society”) (which was a newly formed subsidiary in connection with the February 1, 2022 acquisition of LS Holdings Corp).

The Company also has ownership interests in the following companies:

●

Teejan Podoponics International LLC (“TPI”) (the Company has owned 50% of TPI since December 2018);

●

Reverse Stock Split

Reverse Stock Split

Initial Public Offering and Secondary Public Offering

Initial Public Offering and Secondary Public Offering

Coronavirus (“COVID-19”) Pandemic Impact and Uncertainties

Coronavirus (“COVID-19”) Pandemic Impact and Uncertainties

The Paycheck Protection Program

The Company received total loan proceeds of approximately $779 thousand from the PPP Loan. The SBA denied the Company’s application for the forgiveness of the outstanding balance of the PPP Loan. On June 23, 2022, the Company received a letter from Bank of America agreeing to extend the maturity date to May 7, 2025 and bears interest at a rate of 1.00% per year. The PPP loan is payable in 34 equal combined monthly principal and interest payments of approximately $24 thousand that commenced on August 7, 2022.

Preparation of Condensed Consolidated Financial Statements

Preparation of Condensed Consolidated Financial Statements

Basis of Presentation and Principles of Consolidation

Accounting for Wholly-Owned Subsidiaries

Accounting for Less Than Wholly-Owned Subsidiaries

Going Concern

Going Concern

Use of Estimates

Use of Estimates

Fiscal Year

Fiscal Year

For the Company and its Subsidiaries, the fiscal year ends on December 31, each year.

Emerging Growth Company

Emerging Growth Company

In addition, the JOBS Act provides that an “emerging growth company” can use the extended transition period for complying with new or revised accounting standards.

The Company will remain an “emerging growth company” until the earliest to occur of:

●

reporting $1.0 billion or more in annual gross revenues;

●

the issuance, in a three-year period, of more than $1.0 billion in non-convertible debt;

●

the end of the fiscal year in which the market value of Common Stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; or

Reclassifications

Reclassifications

Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

Marketable Securities

Marketable Securities

Accounts Receivable, Net

Concentration of Credit Risk and Significant Customer

Concentration of Credit Risk and Significant Customer

The tables below show customers who account for 10% or more of the Company’s total revenues and 10% or more of the Company’s accounts receivable for the periods presented:

Revenue

For the three months ended September 30, 2022 and 2021, the Company’s customers that accounted for 10% or more of the total revenue were as follows:

	Three Months Ended September 30, 2022					Three Months Ended September 30, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
New England Innovation Academy (“NEIA”) – Related Party		*		*		$	3,217		20.4	%
Greenstone Holdings (“Greenstone”) – Related Party		*		*		$	1,998		12.7	%
Company Customer Number – 71		*		*		$	3,174		20.2	%
Company Customer Number – 136	$	908		12.9	%	$	2,480		15.7	%
Company Customer Number – 139		*		*		$	4,006		25.4	%

*	Customer revenue, as a percentage of total revenue, was less than 10%

For the nine months ended September 30, 2022 and 2021, the Company’s customers that accounted for 10% or more of the total revenue were as follows:

	Nine Months Ended September 30, 2022					Nine Months Ended September 30, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
NEIA – Related Party		*		*		$	19,572		56.6	%
Company Customer Number – 71		*		*		$	3,520		10.2	%
Company Customer Number – 136	$	7,054		13.5	%		*		*
Company Customer Number – 139	$	8,590		16.4	%	$	4,006		11.6	%

*	Customer revenue, as a percentage of total revenue, was less than 10%

Accounts Receivable, Net

As of September 30, 2022 and December 31, 2021, the Company’s customers that accounted for 10% or more of the total accounts receivable, net, were as follows:

	As of September 30, 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	$	1,541		33.8	%	$	1,541		21.3	%
Company Customer Number - 15989	$	600		13.2	%		*		*
Company Customer Number - 16540	$	573		12.6	%		*		*
Company Customer Number - 185	$	526		11.5	%		*		*
Company Customer Number - 12237	$	510		11.2	%		*		*

*	Customer accounts receivable balance, as a percentage of total accounts receivable balance, was less than 10%

Inventories

Inventories

Property and Equipment

are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are recognized using the straight-line method over the estimated useful life of each asset, as follows:

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

Goodwill

Goodwill

Intangible Assets

The finite-lived useful lives are as follows:

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

Intangible Assets

Intangible Assets

The finite-lived useful lives are as follows:

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

Based on its interim testing, the Company noted that the carrying value of equity exceeded the calculated fair value by an amount greater than the aggregate value of our goodwill and intangible assets. Accordingly, the Company concluded that the entire carrying value of its goodwill and intangible assets should be impaired, resulting in a second-quarter impairment charge of $69.9 million. Additional information regarding the Company’s interim testing on intangible assets may be found in Note 7 – Goodwill and Intangible Assets, Net, included elsewhere in the notes to the consolidated financial statements.

Convertible Notes Payable

Convertible Notes Payable

Warrant Liabilities

Warrant Liabilities

Debt Issue Costs and Debt Discount

Debt Issue Costs and Debt Discount

Original Issue Discount

Original Issue Discount

Leases

Leases

Deferred Revenue

Deferred Revenue

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Stock-Based Compensation

Stock-Based Compensation

The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified.

Business Combinations

Business Combinations

Revenue Recognition

Revenue Recognition

Overview

The Company generates revenue from the following sources: (1) equipment sales, (2) providing services and (3) construction contracts.

In accordance with ASC 606 “Revenue Recognition”, the Company recognizes revenue from contracts with customers using a five-step model, which is described below:

●

identify the customer contract;

●

identify performance obligations that are distinct;

●

determine the transaction price;

●

allocate the transaction price to the distinct performance obligations; and

●

recognize revenue as the performance obligations are satisfied.

Identify the customer contract

Identify performance obligations that are distinct

Determine the transaction price

Allocate the transaction price to distinct performance obligations

Recognize revenue as the performance obligations are satisfied

Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer.

Significant Judgments

The Company determines the SSP for services in time and materials contracts by observable prices in standalone services arrangements.

Research and Development Costs

Research and Development Costs

Capitalization of Internal Software Development Costs

Capitalization of Internal Software Development Costs

Shipping and Handling Charges

Shipping and Handling Charges

Equity Method Investments

Equity Method Investments

Income Taxes

Income Taxes

Net Loss Per Share

Net Loss Per Share

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Pending Accounting Pronouncements

Pending Accounting Pronouncements

Overview, Basis of Presentation and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Nature of Business and Basis of Presentation [Abstract]

Schedule of total revenue

	Three Months Ended September 30, 2022					Three Months Ended September 30, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
New England Innovation Academy (“NEIA”) – Related Party		*		*		$	3,217		20.4	%
Greenstone Holdings (“Greenstone”) – Related Party		*		*		$	1,998		12.7	%
Company Customer Number – 71		*		*		$	3,174		20.2	%
Company Customer Number – 136	$	908		12.9	%	$	2,480		15.7	%
Company Customer Number – 139		*		*		$	4,006		25.4	%

	Nine Months Ended September 30, 2022					Nine Months Ended September 30, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
NEIA – Related Party		*		*		$	19,572		56.6	%
Company Customer Number – 71		*		*		$	3,520		10.2	%
Company Customer Number – 136	$	7,054		13.5	%		*		*
Company Customer Number – 139	$	8,590		16.4	%	$	4,006		11.6	%

Schedule of total accounts receivable, net

	As of September 30, 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	$	1,541		33.8	%	$	1,541		21.3	%
Company Customer Number - 15989	$	600		13.2	%		*		*
Company Customer Number - 16540	$	573		12.6	%		*		*
Company Customer Number - 185	$	526		11.5	%		*		*
Company Customer Number - 12237	$	510		11.2	%		*		*

Schedule of property and equipment

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

Schedule of finite-lived useful lives

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

Revenue and Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of revenue disaggregated by timing of revenue recognition

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Transferred at a point in time	$	5,657	$	2,757	$	28,675	$	4,110
Transferred over time		1,362		12,994		23,694		30,474
Total revenue	$	7,019	$	15,751	$	52,369	$	34,584

Schedule of current deferred revenue

(In thousands)	Nine Months Ended September 30, 2022			Year Ended December 31, 2021
Deferred revenue – beginning of period	$	3,772		$	152
Additions		18,167			3,758
Interest income on deferred revenue		—			4
Recognized		(11,803	)		(142	)
Deferred revenue – end of period	$	10,136		$	3,772

Supplemental Consolidated Balance Sheet Information (Tables)

9 Months Ended

Sep. 30, 2022

Supplemental Consolidated Balance Sheet Information [Abstract]

Schedule of accounts receivable

(In thousands)	September 30, 2022			December 31, 2021
Accounts receivable, gross	$	7,684		$	8,637
Less allowance for doubtful accounts		(3,125	)		(1,415	)
Accounts receivable, net	$	4,559		$	7,222

Schedule of allowance for doubtful accounts

(In thousands)	Nine Months Ended September 30, 2022			Year Ended December 31, 2021
Allowance for doubtful accounts - beginning of period	$	1,415		$	54
Provision for doubtful accounts		1,938			1,187
Other adjustments		(228	)		174
Allowance for doubtful accounts - end of period	$	3,125		$	1,415

Schedule of prepaid expenses and other current receivables

(In thousands)	September 30, 2022		December 31, 2021
Deferred costs	$	1,108	$	353
Prepaid insurance		931		492
Other receivables, other		603		86
Other note receivables ⁽¹⁾		584		807
Prepaid expenses, other		430		541
Prepaid materials		261		—
Prepaid software		188		173
Deferred issuance costs, net		191		—
Total prepaid expenses and other current assets	$	4,296	$	2,452

Schedule of property and equipment

(In thousands)	September 30, 2022			December 31, 2021
Leasehold improvements	$	1,048		$	841
Machinery and equipment		1,048			898
Computer and office equipment		624			473
Leased equipment at customer		602			619
Furniture and fixtures		504			385
Software		300			174
Research and development of laboratory equipment		260			163
Vehicles		143			143
Trade show assets		79			80
Total property and equipment, gross		4,608			3,776
Accumulated depreciation		(1,930	)		(780	)
Construction in progress		10,530			3,236
Total property and equipment, net	$	13,208		$	6,232

Schedule of other non-current assets

(In thousands)	September 30, 2022		December 31, 2021
Long-term deferred commissions expense	$	1,293	$	1,101
Deferred debt issuance costs, non-current, net		454		—
Security deposits		152		83
Total other non-current assets	$	1,899	$	1,184

Schedule of accrued expenses and other current liabilities

(In thousands)	September 30, 2022		December 31, 2021
Sales tax payable ⁽¹⁾	$	5,756	$	5,290
Accrued construction costs		5,661		8,803
Accrued acquisition liability ⁽²⁾		4,145		9,198
Compensation related fees		3,141		3,491
Accrued warranty costs		540		398
Accrued professional fees		448		1,104
Accrued interest expense		263		—
Accrued inventory purchases		243		201
Financing lease liabilities		153		156
Accrued consulting fees		90		75
Accrued non-income taxes		—		48
Other current liabilities		65		—
Total accrued expenses and other current liabilities	$	20,505	$	28,764

Schedule of accrued liability for estimated future warranty cost

(In thousands)	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
Warranty accrual – beginning of period	$	398	$	—
Liabilities accrued for warranties issued during period		142		398
Warranty accrual – end of period	$	540	$	398

Fair Value Measures (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities measured at fair value on a recurring basis

	September 30, 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)	$	—	$	—	$	—	$	—	$	178	$	—	$	—	$	178
Municipal bonds		—		—		—		—		9,961		—		—		9,961
Corporate bonds		381		—		—		381		34,589		—		—		34,589
Total assets	$	381	$	—	$	—	$	381	$	44,728	$	—	$	—	$	44,728
Liabilities
Contingent consideration	$	—	$	—	$	643	$	643	$	—	$	—	$	6,137	$	6,137
Warrant liabilities		—		—		971		971		—		—		—		—
Total liabilities	$	—	$	—	$	1,614	$	1,614	$	—	$	—	$	6,137	$	6,137

Schedule of marketable securities

(In thousands)	September 30, 2022		December 31, 2021
Current marketable securities
Municipal bonds	$	—	$	9,961
Corporate bonds		381		34,589
	$	381	$	44,550

Schedule of amortized cost and estimated fair value of marketable securities

(In thousands)	Amortized cost		Unrealized loss			Estimated fair value
Current marketable securities (due within 1 year)
Corporate bonds	$	381	$	(10	)	$	371
	$	381	$	(10	)	$	371

(In thousands)	Amortized cost		Unrealized loss			Estimated fair value
Current marketable securities (due within 1 year)
Municipal bonds	$	9,961	$	(9	)	$	9,952
Corporate bonds		34,589		(72	)		34,517
	$	44,550	$	(81	)	$	44,469

Schedule of fair value of the contingent consideration within other expenses

(In thousands)	Nine Months Ended September 30, 2022			Year Ended December 31, 2021
Contingent consideration – beginning of period	$	6,137		$	—
Accrued contingent consideration		1,420			4,725
Accretion of contingent consideration		145			—
Payments made on contingent liabilities		(5,550	)		—
Change in estimated fair value		(1,509	)		1,412
Contingent consideration – end of period	$	643		$	6,137

Schedule of valuation of warrant liabilities

Stock price at issuance	$	0.44
Option exercise price	$	1.23-$2.15
Expected term (Years)		5.50
Volatility		40.00	%
Discount rate (Treasury yield)		0.00%-4.06	%

Schedule of changes in the fair value of the level 3 warrant liabilities

(In thousands)	Nine Months Ended September 30, 2022
Warrant liabilities – beginning of period	$	—
Initial fair value of warrant liabilities		6,657
Change in estimated fair value		(5,686	)
Warrant liabilities – end of period	$	971

Loan Receivable (Tables)

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Schedule of breakdown of loans receivable by company

(In thousands)	September 30, 2022			December 31, 2021
Bud & Mary’s – TTK Solution	$	14,691		$	5,542
Greenstone – TTK Solution – Related Party		12,457			11,177
Company Customer Number 136 – TTK Solution		10,329			2,439
Company Customer Number 125 – TTK Solution		5,563			1,105
Company Customer Number 71 – Non-TTK Solution ⁽¹⁾		2,542			1,946
Company Customer Number 140 – TTK Solution		46			46
Other – Non-TTK Solutions		5,374			—
TTK Solution – Allowance for doubtful accounts ⁽²⁾		(21,770	)		—
Total loan receivable	$	29,232		$	22,255

Inventory (Tables)

9 Months Ended

Sep. 30, 2022

Inventory [Abstract]

Schedule of Inventory

(In thousands)	September 30, 2022			December 31, 2021
Raw materials	$	17,130		$	6,393
Prepaid inventory		4,827			2,237
Finished goods		21,743			12,810
Inventory, gross		43,700			21,440
Inventory reserves		(1,909	)		(942	)
Total inventory, net	$	41,791		$	20,498

Schedule of establishes inventory reserves for obsolete, slow moving and defective items

(In thousands)	Nine Months Ended September 30, 2022		Year Ended December 31, 2021
Inventory reserves – beginning of period	$	942	$	—
Increase in inventory reserves		967		942
Inventory reserves – end of period	$	1,909	$	942

Goodwill and Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2022

Intangible Assets and Goodwill [Abstract]

Schedule of changes in goodwill

(In thousands)	Nine Months Ended September 30, 2022			Year Ended December 31, 2021
Goodwill - beginning of period	$	50,090		$	632
Goodwill acquired during period		4,368			49,458
Goodwill impairment loss		(54,747	)		—
Goodwill purchase accounting adjustment		289			—
Goodwill - end of period	$	—		$	50,090

Schedule of intangible assets

	Intangible Assets, Gross						Accumulated Amortization and Impairment									Intangible Assets, Net
(In thousands)	January 1, 2022		Additions		September 30, 2022		January 1, 2022			Expense and Impairments, net			September 30, 2022			January 1, 2022		September 30, 2022
Trade names	$	2,418	$	317	$	2,735	$	(227	)	$	(2,508	)	$	(2,735	)	$	2,191	$	—
Customer relationships		6,176		713		6,889		(302	)		(6,587	)		(6,889	)		5,874		—
Acquired developed technology		4,911		1,432		6,343		(191	)		(6,152	)		(6,343	)		4,720		—
Non-compete agreements		1,202		—		1,202		(60	)		(1,142	)		(1,202	)		1,142		—
Capitalized website costs		245		—		245		(100	)		(145	)		(245	)		145		—
Total intangible assets, net	$	14,952	$	2,462	$	17,414	$	(880	)	$	(16,534	)	$	(17,414	)	$	14,072	$	—

	Intangible Assets, Gross						Accumulated Amortization									Intangible Assets, Net
(In thousands)	January 1, 2021		Additions		December 31, 2021		January 1, 2021			Expense			December 31, 2021			January 1, 2021		December 31, 2021
Trade names	$	930	$	1,488	$	2,418	$	(88	)	$	(139	)	$	(227	)	$	842	$	2,191
Customer relationships		850		5,326		6,176		(89	)		(213	)		(302	)		761		5,874
Acquired developed technology		—		4,911		4,911		—			(191	)		(191	)		—		4,720
Non-compete agreements		—		1,202		1,202		—			(60	)		(60	)		—		1,142
Capitalized website costs		139		106		245		(48	)		(52	)		(100	)		91		145
Total intangible assets, net	$	1,919	$	13,033	$	14,952	$	(225	)	$	(655	)	$	(880	)	$	1,694	$	14,072

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (g)
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Business Combination (Tables) [Line Items]

Business Combination (Tables)

9 Months Ended

Sep. 30, 2022

PurePressure [Member]

Schedule of components and the allocation of the purchase price

(In thousands)
Purchase price consideration
Estimated closing proceeds	$	4,002
Transaction expenses		80
Closing buyer shares		1,904
Holdback buyer shares		816
Earn-out consideration		1,420
Estimated working capital adjustment		(255	)
Fair value of total consideration transferred		7,967
Total purchase price, net of cash acquired	$	7,402

Fair value allocation of purchase price
Cash and cash equivalents	$	565
Accounts receivable		511
Inventory		2,130
Prepaid expenses and other current receivables		55
Right - of-use assets, net		304
Property and equipment, net		177
Prepaid and refundable taxes		194
Accounts payable, accrued expenses, and other current liabilities		(1,244	)
Deferred revenue		(963	)
Deferred tax liability		(237	)
Finance lease liabilities, current		(36	)
Finance lease liabilities, non-current		(35	)
Operating lease liabilities, current		(112	)
Operating lease liabilities, non-current		(192	)
Acquired intangible assets		2,462
Goodwill		4,388
Total purchase price	$	7,967

(In thousands)
Purchase price consideration
Estimated closing proceeds	$	3,613
Indebtedness paid		320
Transaction expenses		115
Closing buyer shares		2,211
Holdback buyer shares		654
Earn-out consideration		707
Estimated working capital adjustments		330
Fair value of total consideration transferred		7,950
Total purchase price, net of cash acquired	$	7,647

Fair value allocation of purchase price
Cash and cash equivalents	$	303
Accounts receivable, net		48
Inventory		1,537
Property and equipment, net		219
Right-of-use assets, net		191
Prepaid expenses and other current receivables		61
Other non-current assets		16
Accounts payable and accrued expenses		(765	)
Deferred revenue		(762	)
Operating lease liabilities, current		(117	)
Operating lease liabilities, non-current		(74	)
Finance lease liabilities, current		(4	)
Finance lease liabilities, non-current		(10	)
Notes payable, current		(260	)
Notes payable, non-current		(12	)
Acquired intangible assets		3,037
Goodwill		4,542
Total purchase price	$	7,950

Precision and Cascade [Member]

Business Combination (Tables) [Line Items]

Schedule of components and the allocation of the purchase price

(In thousands)
Purchase price consideration
Cash paid to Sinclair Members at the close	$	23,000
Cash contributed to escrow accounts at the close		7,000
Cash paid for excess net working capital		1,430
Stock issued at the close		14,535
Fair value of contingent consideration to be achieved		3,953
Fair value of total consideration transferred		49,918
Total purchase price, net of cash acquired	$	48,630

Fair value allocation of purchase price
Cash and cash equivalents	$	1,288
Accounts receivable		897
Inventory		6,761
Prepaid expenses and other current receivables		1,736
Property and equipment, net		970
Right-of-use assets, net		730
Capitalized web costs, net		2
Accounts payable and accrued expenses		(9,223	)
Deferred revenue		(5,419	)
Long-term debt		(1,961	)
Operating lease liabilities, current		(392	)
Operating lease liabilities, non-current		(362	)
Acquired intangible assets		9,889
Goodwill		45,002
Total purchase price	$	49,918

Precision and Cascade [Member]

Business Combination (Tables) [Line Items]

Schedule of intangible assets consist of trade names, technology, and customer relationships

(In thousands)	Asset Value		Useful Life
Identified intangible assets
Trade names	$	317		5 years
Acquired developed technology		1,432		8 years
Customer relationships		713		6 years
Total identified intangible assets	$	2,462

(In thousands)	Asset Value		Useful Life
Identified intangible assets
Trade names	$	1,260		6 to 7 years
Acquired developed technology		3,818		5 years
Non-compete agreements		1,202		5 years
Customer relationships		3,609		7 to 8 years
Total identified intangible assets	$	9,889

(In thousands)	Asset Value		Useful Life
Identified intangible assets
Trade name	$	227		5 years
Acquired developed technology		1,093		8 years
Customer relationships		1,717		5 years
Total identified intangible assets	$	3,037

Debt (Tables)

9 Months Ended

Sep. 30, 2022

Debt [Abstract]

Schedule of debt consisted

(In thousands)	September 30, 2022			December 31, 2021
Note payable – Exchange Note	$	35,000		$	—
PPP Loan		726			804
Navitas Loan		27			—
Other notes payable ⁽¹⁾		218			297
Total debt		35,971			1,101
Less: unamortized debt discount		(5,099	)		—
Total debt, net of debt discount		30,872			1,101
Less: current portion, net of current unamortized debt discount		(492	)		(1,089	)
Long-term debt	$	30,380		$	12

Schedule of PPP loan balances by current and non-current

(In thousands)	Short-Term		Long-Term			Notes Payable, Net
Direct issuance costs	$	191	$	454		$	645

Principal	$	—	$	35,000		$	35,000
Unamortized discount		—		(5,099	)		(5,099	)
Net carrying amount	$	—	$	29,901		$	29,901

Schedule of future minimum payments

Years ending December 31 (In thousands),

Remaining 2022	$	269
2023		303
2024		282
2025		35,117
2026 and thereafter		—
Total future payments	$	35,971

Schedule of PPP loan balances by current and non-current

(In thousands)	Balance Sheet Location	September 30, 2022		December 31, 2021
PPP Loan, current	Long-term debt, current	$	256	$	792
PPP Loan, non-current	Long-term debt		470		12
Total PPP Loan outstanding		$	726	$	804

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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Schedule of operating activity

Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Operating lease cost	$	293	$	100	$	828	$	184
Finance lease cost:
Amortization of right-of-use assets		54		44		148		134
Interest on lease liabilities		7		10		26		32
Total lease cost	$	354	$	154	$	1,002	$	350

Schedule of financing lease activity

(In thousands)	Balance Sheet Location	September 30, 2022			December 31, 2021
Assets
Right-of-use assets, net	Right-of-use, net	$	2,470		$	1,479
Finance lease assets	Property and equipment, net		304			380
Total lease assets		$	2,774		$	1,859

Liabilities
Current:
Operating	Operating lease liabilities, current	$	822		$	814
Financing	Accrued expenses and other current liabilities		153			156
Non-current:
Operating	Operating lease liabilities, non-current		1,744			704
Financing	Other non-current liabilities		187			293
Total lease liabilities		$	2,906		$	1,967
Weighted-average remaining lease term – operating leases			3.68 years			3.11 years
Weighted-average remaining lease term – finance leases			2.50 years			2.36 years
Weighted-average discount rate – operating leases			6.70	%		8.03	%
Weighted-average discount rate – finance leases			7.84	%		6.29	%

Schedule of maturities of operating and finance lease liabilities

Years ending December 31 (In thousands),	Operating Lease			Finance Lease

Remaining 2022	$	227		$	37
2023		921			182
2024		614			91
2025		493			51
2026		461			15
Thereafter		200			—
Total minimum lease payments		2,916			376
Less imputed interest		(350	)		(36	)
Total lease liabilities	$	2,566		$	340

Stock-Based Compensation and Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement, Disclosure [Abstract]

Schedule of valuation of options granted

Volatility	40	%
Risk-free interest rate	1.10% – 1.63	%
Dividend yield	0.00	%
0% Expected life (Years)	10
Forfeiture rate	0.00	%

Schedule of restricted stock units activity

(In thousands, except share and per share data)	Number of Options			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at December 31, 2020		313,311		$	35.10	$	—
Granted		152,002			121.30
Exercised		(65,763	)		32.30
Forfeited		(43,021	)		39.80
Canceled		(100	)		44.30
Options outstanding at December 31, 2021		356,429			71.80	$	12,572
Granted		—			—
Exercised		(851	)		22.92
Forfeited		(47,013	)		51.11
Canceled		(22,890	)		92.93
Options outstanding at September 30, 2022		285,675		$	73.66	$	—

Options vested and exercisable as of September 30, 2022		218,172		$	62.87
Options vested and expected to vest as of September 30, 2022		272,209		$	71.93

Schedule of restricted stock units activity

	Number of Shares			Weighted- Average Grant Date Fair Value
Unvested at December 31, 2021		—		$	—
Granted		188,800			12.62
Vested		(20,000	)		19.20
Forfeited		(9,500	)		15.70
Unvested at September 30, 2022		159,300		$	12.46

Stock Warrants (Tables)

9 Months Ended

Sep. 30, 2022

Class of Warrant or Right [Line Items]

Schedule of company’s warrant activity

	Number of Warrants			Weighted- Average Exercise Price
Warrants outstanding at December 31, 2020		82,817		$	0.20
Granted		37,797			14.72
Exercised		(93,430	)		6.07
Warrants outstanding at December 31, 2021		27,184			0.20
Granted		2,569,518			21.35
Exercised		(165,915	)		0.01
Warrants outstanding at September 30, 2022		2,430,787		$	22.57

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Net Loss Per Share [Abstract]

Schedule of basic and diluted net loss per share

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except share and per share data)	2022			2021			2022			2021
Numerator:
Net loss attributable to Agrify Corporation	$	(46,268	)	$	(9,758	)	$	(148,551	)	$	(19,204	)
Accrued dividend attributable to Preferred A Stockholders		—			—			—			(61	)
Net loss available for Common Stockholders	$	(46,268	)	$	(9,758	)	$	(148,551	)	$	(19,265	)
Denominator:
Weighted-average common shares outstanding – basic and diluted ⁽¹⁾		2,670,501			2,083,439			2,596,649			1,806,874
Net loss per share attributable to Common Stockholders – basic and diluted ⁽¹⁾	$	(17.33	)	$	(4.68	)	$	(57.21	)	$	(10.66	)

Schedule of anti-dilutive shares

	September 30, 2022		December 31, 2021
Shares subject to outstanding Common Stock options		285,675		356,429
Shares subject to unvested restricted stock units		159,300		—
Shares subject to outstanding warrants		2,430,787		27,184
		2,875,762		383,613

Related Parties (Tables)

9 Months Ended

Sep. 30, 2022

Related Parties [Abstract]

Schedule of net purchasing (sales) activity

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2022		2021			2022			2021
Bluezone	$	—	$	217		$	5		$	310
4D Bios ⁽¹⁾		—		864			—			1,311
Enzo		—		40			—			40
Cannae Policy Group		—		—			25			—
Topline Performance Group		1		—			71			—
NEIA		—		(3,217	)		(1,763	)		(19,572	)
Greenstone		212		(1,998	)		392			(1,998	)
Valiant Americas, LLC		1,315		606			11,120			2,323
Living Greens Farm		—		—			—			(58	)

Schedule of net related party (payable) receivable

(In thousands)	September 30, 2022			December 31, 2021
Cannae Policy Group	$	—		$	(8	)
Cannaquip		—			(21	)
Greenstone (net of allowance for doubtful accounts of $7,079 and $0 at September 30, 2022 and December 31, 2021, respectively) ⁽¹⁾		5,308			11,177
Living Greens Farm ⁽²⁾		—			34
NEIA		—			3,500
Valiant Americas, LLC		(599	)		(922	)
Topline Performance Group		(1	)		—

Overview, Basis of Presentation and Significant Accounting Policies (Details) - USD ($)						1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 07, 2022	Aug. 18, 2022	Aug. 07, 2022	Feb. 19, 2021	Feb. 01, 2021	Aug. 18, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Jun. 23, 2022	Jan. 12, 2022	Mar. 22, 2021
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Total gross proceeds (in Dollars)							$ 62,100,000		$ 62,100,000
Underwriting discounts and commissions (in Dollars)									4,000,000
Offering expenses (in Dollars)							$ 1,000,000		1,000,000
Net proceeds (in Dollars)									$ 57,000,000
Common stock price per share (in Dollars per share)				$ 135
Offering to shares (in Shares)									638,889
Total net proceeds (in Dollars)									$ 80,000,000
Received total proceeds from the unsecured PPP Loans (in Dollars)									$ 779,000
Interest rate percentage							30.00%		30.00%			1.00%
Principal and interest payment (in Dollars)			$ 24,000
Accumulated deficit (in Dollars)							$ 207,500,000		$ 207,500,000
Cash equivalents, marketable securities and restricted cash (in Dollars)							12,500,000		12,500,000
Exchange agreement payment (in Dollars)		$ 35,200,000
Current liabilities (in Dollars)							41,500,000		41,500,000
Aggregate offering price (in Dollars)							$ 50,000,000		50,000,000
Net proceeds (in Dollars)									$ 15,100,000
Issuances of common stock (in Dollars)	$ 34,400,000
Transition period description									addition, the JOBS Act provides that an “emerging growth company” can use the extended transition period for complying with new or revised accounting standards.The Company will remain an “emerging growth company” until the earliest to occur of: ● reporting $1.0 billion or more in annual gross revenues; ● the issuance, in a three-year period, of more than $1.0 billion in non-convertible debt; ● the end of the fiscal year in which the market value of Common Stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; or ● December 31, 2026. As of June 30, 2022, the market value of Common Stock held by non-affiliates did not exceed $700 million.
Common stock, par value (in Dollars per share)							$ 0.001		$ 0.001		$ 0.001
Concentration risk percentage							10.00%		10.00%
Percentage of accounts receivable									10.00%
Impairment charge (in Dollars)									$ 69,900,000
Warrant purchase shares (in Shares)						1,422,764
Purchase an aggregate shares (in Shares)						688,111			2,110,875
Percentage of investment							50.00%		50.00%
Percentage of holders							50.00%		50.00%
Investment amount (in Dollars)							$ 0		$ 0
Tax benefit percentage									50.00%
Revenue Benchmark [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Concentration risk percentage							10.00%	10.00%	10.00%	10.00%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Concentration risk percentage									10.00%
Accounts Receivable [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Concentration risk percentage									10.00%		10.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Concentration risk percentage									10.00%
Agrify Valiant LLC’s [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Ownership percentage							60.00%		60.00%
Agrify Brands, LLC’s [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Ownership percentage							75.00%		75.00%
Teejan Podponics International LLC [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Ownership percentage							50.00%		50.00%
IPO [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Shares of common stock (in Shares)				555,556	621,000
Offering price per share (in Dollars per share)									$ 100
Over-Allotment Option [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Shares of common stock (in Shares)					81,000
Sale of common stock shares (in Shares)														83,333
Common Stock [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Common stock, par value per share (in Dollars per share)													$ 0.001
SPA [Member]
Overview, Basis of Presentation and Significant Accounting Policies (Details) [Line Items]
Exchange agreement payment (in Dollars)									$ 10,000,000

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of total revenue - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Sep. 30, 2021

NEIA – Related Party [Member]

^[1]

$ 3,217

^[1]

$ 19,572

Greenstone Holdings (“Greenstone”) – Related Party [Member]

^[1]

20.40%

^[1]

56.60%

^[1]

$ 1,998

Company Customer Number – 71 [Member]

^[1]

12.70%

^[1]

$ 3,174

^[1]

$ 3,520

Company Customer Number – 136 [Member]

^[1]

20.20%

^[1]

10.20%

$ 908

$ 2,480

$ 7,054

^[1]

Bud & Mary’s Cultivation, Inc. (“Bud & Mary’s”) (1) [Member]

12.90%

15.70%

13.50%

^[1]

^[1]

$ 4,006

Bud & Mary’s (1) [Member]

^[1]

25.40%

$ 8,590

$ 4,006

16.40%

11.60%

[1]	Customer revenue, as a percentage of total revenue, was less than 10%

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 22: http://www.xbrl.org/2009/role/commonPracticeRef
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NEIA – Related Party [Member]

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of total accounts receivable, net - USD ($)
$ in Thousands

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of total accounts receivable, net [Line Items]

^[1]

$ 3,498

Company Customer Number - 126 [Member]

^[1]

48.40%

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of total accounts receivable, net [Line Items]

$ 1,541

Company Customer Number - 15989 [Member]

33.80%

21.30%

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of total accounts receivable, net [Line Items]

$ 600

^[1]

Company Customer Number - 16540 [Member]

13.20%

^[1]

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of total accounts receivable, net [Line Items]

$ 573

^[1]

Company Customer Number - 185 [Member]

12.60%

^[1]

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of total accounts receivable, net [Line Items]

$ 526

^[1]

Company Customer Number - 12237 [Member]

11.50%

^[1]

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of total accounts receivable, net [Line Items]

$ 510

^[1]

11.20%

^[1]

[1]	Customer accounts receivable balance, as a percentage of total accounts receivable balance, was less than 10%

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of property and equipment	9 Months Ended
	Sep. 30, 2022
Public Utility, Property, Plant and Equipment [Line Items]
Leasehold improvements	Lower of estimated useful life or remaining lease term
Computer and office equipment [Member] \| Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	2 years
Computer and office equipment [Member] \| Maximum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	3 years
Furniture and fixtures [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	2 years
Software [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	3 years
Vehicles [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	5 years
Research and development of laboratory equipment [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	5 years
Machinery and equipment [Member] \| Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	3 years
Machinery and equipment [Member] \| Maximum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	5 years
Leased equipment at customer [Member] \| Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	5 years
Leased equipment at customer [Member] \| Maximum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	13 years
Trade show assets [Member] \| Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	3 years
Trade show assets [Member] \| Maximum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated Useful Life	5 years

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of finite-lived useful lives	9 Months Ended
	Sep. 30, 2022
Trade names [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	5 years
Trade names [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	7 years
Acquired developed technology [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	5 years
Acquired developed technology [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	8 years
Non-compete agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	5 years
Customer relationships [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	5 years
Customer relationships [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	8 years
Capitalized website costs [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	3 years
Capitalized website costs [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived useful lives	5 years

Revenue and Deferred Revenue (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Warranty returns	$ 540	$ 398

Revenue and Deferred Revenue (Details) - Schedule of revenue disaggregated by timing of revenue recognition - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Total revenue	$ 7,019	$ 15,751	$ 52,369	$ 34,584
Transferred At a Point in Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue	5,657	2,757	28,675	4,110
Transferred Over Time [Member]
Disaggregation of Revenue [Line Items]
Total revenue	$ 1,362	$ 12,994	$ 23,694	$ 30,474

Schedule Of Prepaid Expenses And Other Current Receivables Abstract

Revenue and Deferred Revenue (Details) - Schedule of current deferred revenue - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Current Deferred Revenue Abstract
Deferred revenue – beginning of period	$ 3,772	$ 152
Additions	18,167	3,758
Interest income on deferred revenue		4
Recognized	(11,803)	(142)
Deferred revenue – end of period	$ 10,136	$ 3,772

Supplemental Consolidated Balance Sheet Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Supplemental Consolidated Balance Sheet Information [Abstract]
Accounts receivable net	$ 0		$ 0		$ 3,500
Bad debt expense	385	$ 0	1,900	$ 0
Depreciation expense	$ 409	$ 139	$ 1,200	$ 337

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of accounts receivable - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Accounts Receivable Abstract
Accounts receivable, gross	$ 7,684	$ 8,637
Less allowance for doubtful accounts	(3,125)	(1,415)	$ (54)
Accounts receivable, net	$ 4,559	$ 7,222

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of allowance for doubtful accounts - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Allowance For Doubtful Accounts Abstract
Allowance for doubtful accounts - beginning of period	$ 1,415	$ 54
Provision for doubtful accounts	1,938	1,187
Other adjustments	(228)	174
Allowance for doubtful accounts - end of period	$ 3,125	$ 1,415

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of prepaid expenses and other current receivables - USD ($)
$ in Thousands

Sep. 30, 2022

Dec. 31, 2021

Deferred costs

$ 1,108

$ 353

Prepaid insurance

931

492

Other receivables, other

603

Other note receivables

^[1]

584

807

Prepaid expenses, other

430

541

Prepaid materials

261

Prepaid software

188

173

Deferred issuance costs, net

191

Total prepaid expenses and other current assets

$ 4,296

$ 2,452

[1]	Other note receivables relate to the current portion of one of its loan receivable balances related to the total turn-key solution (“TTK Solution”) program.

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of property and equipment - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 4,608	$ 3,776
Accumulated depreciation	(1,930)	(780)
Construction in progress	10,530	3,236
Total property and equipment, net	13,208	6,232
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,048	841
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,048	898
Computer and office equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	624	473
Leased equipment at customer [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	602	619
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	504	385
Software [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	300	174
Research and development of laboratory equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	260	163
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	143	143
Trade Show Assets [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 79	$ 80

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of other non-current assets - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Other Non Current Assets Abstract
Long-term deferred commissions expense	$ 1,293	$ 1,101
Deferred debt issuance costs, non-current, net	454
Security deposits	152	83
Total other non-current assets	$ 1,899	$ 1,184

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of accrued expenses and other current liabilities - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Dec. 31, 2020

Schedule Of Accrued Expenses And Other Current Liabilities Abstract

Sales tax payable

^[1]

$ 5,756

$ 5,290

Accrued construction costs

5,661

8,803

Accrued acquisition liability

^[1],[2]

4,145

9,198

Compensation related fees

3,141

3,491

Accrued warranty costs

540

398

Accrued professional fees

448

1,104

Accrued interest expense

263

Accrued inventory purchases

243

201

Financing lease liabilities

153

156

Accrued consulting fees

Accrued non-income taxes

Other current liabilities

Total accrued expenses and other current liabilities

$ 20,505

$ 28,764

[1]	Sales tax payable primarily represents identified sales and use tax liabilities arising from the acquisition of Precision and Cascade. These amounts are included as part of the initial purchase price allocations and are the subject matter of an indemnification claim under the Precision and Cascade acquisition agreement.
[2]	Accrued acquisition liabilities include both the contingent consideration and the value of held-back Common Stock associated with the 2022 acquisition of Lab Society and the 2021 acquisition of PurePressure.

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of accrued liability for estimated future warranty cost - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Accrued Liability For Estimated Future Warranty Cost Abstract
Warranty accrual – beginning of period	$ 398
Liabilities accrued for warranties issued during period	142	398
Warranty accrual – end of period	$ 540	$ 398

Fair Value Measures (Details) $ in Thousands	9 Months Ended
Fair Value Measures (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Fair Value Measures (Details) [Line Items]
Contingent consideration liability	$ 602
Contingent earn-out consideration	121
Total contingent consideration	5,600
Business Combination [Member]
Fair Value Measures (Details) [Line Items]
Increase contingent earnout consideration	$ 1,000

Fair Value Measures (Details) - Schedule of assets and liabilities measured at fair value on a recurring basis - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets
Total assets	$ 381	$ 44,728
Liabilities
Contingent consideration	643	6,137
Warrant liabilities	971
Total liabilities	1,614	6,137
Level 1 [Member]
Assets
Total assets	381	44,728
Liabilities
Contingent consideration
Warrant liabilities
Total liabilities
Level 2 [Member]
Assets
Total assets
Liabilities
Contingent consideration
Warrant liabilities
Total liabilities
Level 3 [Member]
Assets
Total assets
Liabilities
Contingent consideration	643	6,137
Warrant liabilities	971
Total liabilities	1,614	6,137
Mutual funds (included in cash and cash equivalents) [Member]
Assets
Total assets		178
Mutual funds (included in cash and cash equivalents) [Member] \| Level 1 [Member]
Assets
Total assets		178
Mutual funds (included in cash and cash equivalents) [Member] \| Level 2 [Member]
Assets
Total assets
Mutual funds (included in cash and cash equivalents) [Member] \| Level 3 [Member]
Assets
Total assets
Municipal bonds [Member]
Assets
Total assets		9,961
Municipal bonds [Member] \| Level 1 [Member]
Assets
Total assets		9,961
Municipal bonds [Member] \| Level 2 [Member]
Assets
Total assets
Municipal bonds [Member] \| Level 3 [Member]
Assets
Total assets
Corporate bonds [Member]
Assets
Total assets	381	34,589
Corporate bonds [Member] \| Level 1 [Member]
Assets
Total assets	381	34,589
Corporate bonds [Member] \| Level 2 [Member]
Assets
Total assets
Corporate bonds [Member] \| Level 3 [Member]
Assets
Total assets

Fair Value Measures (Details) - Schedule of marketable securities - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Municipal bonds [Member]
Current marketable securities
Total current marketable securities		$ 9,961
Corporate bonds [Member]
Current marketable securities
Total current marketable securities	381	34,589
Cash and money market funds [Member]
Current marketable securities
Total non-current marketable securities	$ 381	$ 44,550

Fair Value Measures (Details) - Schedule of amortized cost and estimated fair value of marketable securities - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2021
Current marketable securities (due within 1 year)
Amortized cost	$ 381	$ 44,550
Unrealized loss	(10)	(81)
Estimated fair value	371	44,469
Corporate bonds [Member]
Current marketable securities (due within 1 year)
Amortized cost	381	34,589
Unrealized loss	(10)	(72)
Estimated fair value	$ 371	34,517
Municipal Bonds [Member]
Current marketable securities (due within 1 year)
Amortized cost		9,961
Unrealized loss		(9)
Estimated fair value		$ 9,952

Fair Value Measures (Details) - Schedule of fair value of the contingent consideration within other expenses - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Fair Value Of The Contingent Consideration Within Other Expenses Abstract
Contingent consideration – beginning of period	$ 6,137
Accrued contingent consideration	1,420	4,725
Accretion of contingent consideration	145
Payments made on contingent liabilities	(5,550)
Change in estimated fair value	(1,509)	1,412
Contingent consideration – end of period	$ 643	$ 6,137

Fair Value Measures (Details) - Schedule of valuation of warrant liabilities	9 Months Ended
	Sep. 30, 2022 $ / shares
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Stock price at issuance	$ 0.44
Expected term (Years)	5 years 6 months
Volatility	40.00%
Discount rate (Treasury yield)	0.00%
Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Option exercise price	$ 1.23
Discount rate (Treasury yield)	0.00%
Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Option exercise price	$ 2.15
Discount rate (Treasury yield)	4.06%

Fair Value Measures (Details) - Schedule of changes in the fair value of the level 3 warrant liabilities $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Schedule Of Changes In The Fair Value Of The Level3 Warrant Liabilities Abstract
Warrant liabilities – beginning of period
Initial fair value of warrant liabilities	6,657
Change in estimated fair value	(5,686)
Warrant liabilities – end of period	$ 971

Loan Receivable (Details)	9 Months Ended
Loan Receivable (Details)	Sep. 30, 2022 USD ($)
Loan Receivable (Details) [Line Items]
Business plans period	10 years
Term loan agreement, description	ended September 30, 2022, the Company provided a notice of default under the term loan agreement between the Company and Bud & Mary’s (the “Bud & Mary’s TTK Agreement”). On October 5, 2022, Bud & Mary’s Cultivation, Inc. (the “Bud & Mary’s”) filed a complaint in the Superior Court of Massachusetts in Suffolk County naming the Company as defendant. Bud & Mary’s is seeking, among other relief, monetary damages in connection with alleged unfair or deceptive trade practices, breach of contract and conversion arising from the Bud & Mary’s TTK Agreement. In response, the Company established a reserve of $14.7 million specifically related to Bud & Mary’s.
Outstanding balance	$ 14.7
Notes receivable balance	5,300,000
Established reserve	$ 7,100,000
Equity percentage	36.60%
Minimum [Member]
Loan Receivable (Details) [Line Items]
Maturity date	2 years
Interest rates	12.00%
Maximum [Member]
Loan Receivable (Details) [Line Items]
Maturity date	3 years
Interest rates	18.00%
Bud Marys TTK Solution [Member]
Loan Receivable (Details) [Line Items]
Allowance for doubtful accounts	$ 14,700,000
Greenstone [Member]
Loan Receivable (Details) [Line Items]
Allowance for doubtful accounts	$ 7,100,000

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company - USD ($)
$ in Thousands

9 Months Ended

12 Months Ended

Sep. 30, 2022

Dec. 31, 2021

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

Bud & Mary’s – TTK Solution [Member]

$ 29,232

$ 22,255

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

Greenstone – TTK Solution – Related Party [Member]

14,691

5,542

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

Company Customer Number 136 – TTK Solution [Member]

12,457

11,177

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

Company Customer Number 125 – TTK Solution [Member]

10,329

2,439

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

Company Customer Number 71 – Non-TTK Solution [Member]

5,563

1,105

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

Company Customer Number 140 – TTK Solution [Member]

^[1]

2,542

1,946

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

Other – Non-TTK Solutions [Member]

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

TTK Solution – Allowance for doubtful accounts [Member]

5,374

Loan Receivable (Details) - Schedule of breakdown of loans receivable by company [Line Items]

Note payable – Exchange Note

^[2]

$ (21,770)

[1]	The current portion of loan receivable are included within Note 3 – Supplemental Consolidated Balance Sheet Information, included elsewhere in the notes to the consolidated financial statements.
[2]	The Company established an allowance for doubtful accounts of approximately $14.7 million related to Bud & Mary’s ongoing litigation. The remaining balance of approximately $7.1 million relates to Greenstone consisting of capital advances, accrued interest and VFUs sales.

Inventory (Details) - Schedule of Inventory - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Inventory Abstract
Raw materials	$ 17,130	$ 6,393
Prepaid inventory	4,827	2,237
Finished goods	21,743	12,810
Inventory, gross	43,700	21,440
Inventory reserves	(1,909)	(942)
Total inventory, net	$ 41,791	$ 20,498

Inventory (Details) - Schedule of establishes inventory reserves for obsolete, slow moving and defective items - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Establishes Inventory Reserves For Obsolete Slow Moving And Defective Items Abstract
Inventory reserves – beginning of period	$ 942
Increase in inventory reserves	967	942
Inventory reserves – end of period	$ 1,909	$ 942

Goodwill and Intangible Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Intangible Assets and Goodwill [Abstract]
Impairment charge			$ 69,900
Intangible assets	$ 15,200		15,200
Goodwill	54,700		54,700
Amortization expenses	$ 0	$ 57	$ 1,400	$ 172

Goodwill and Intangible Assets, Net (Details) - Schedule of changes in goodwill - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Schedule Of Changes In Goodwill Abstract
Goodwill - beginning of period	$ 50,090	$ 632
Goodwill acquired during period	4,368	49,458
Goodwill impairment loss	(54,747)
Goodwill purchase accounting adjustment	289
Goodwill - end of period		$ 50,090

Goodwill and Intangible Assets, Net (Details) - Schedule of intangible assets - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Goodwill and Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items]
Intangible Assets, Gross beginning	$ 14,952	$ 1,919
Intangible Assets, Gross Additions and Retirements, net	2,462	13,033
Intangible Assets, Gross ending	17,414	14,952
Accumulated Amortization and Impairment, beginning	(880)	(225)
Accumulated Amortization and Impairment, Expense and Retirements, net	(16,534)	(655)
Accumulated Amortization and Impairment, ending	(17,414)	(880)
Intangible Assets, Net ending		14,072
Intangible Assets, Net beginning	14,072	1,694
Trade names [Member]
Goodwill and Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items]
Intangible Assets, Gross beginning	2,418	930
Intangible Assets, Gross Additions and Retirements, net	317	1,488
Intangible Assets, Gross ending	2,735	2,418
Accumulated Amortization and Impairment, beginning	(227)	(88)
Accumulated Amortization and Impairment, Expense and Retirements, net	(2,508)	(139)
Accumulated Amortization and Impairment, ending	(2,735)	(227)
Intangible Assets, Net ending		2,191
Intangible Assets, Net beginning	2,191	842
Customer relationships [Member]
Goodwill and Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items]
Intangible Assets, Gross beginning	6,176	850
Intangible Assets, Gross Additions and Retirements, net	713	5,326
Intangible Assets, Gross ending	6,889	6,176
Accumulated Amortization and Impairment, beginning	(302)	(89)
Accumulated Amortization and Impairment, Expense and Retirements, net	(6,587)	(213)
Accumulated Amortization and Impairment, ending	(6,889)	(302)
Intangible Assets, Net ending		5,874
Intangible Assets, Net beginning	5,874	761
Acquired developed technology [Member]
Goodwill and Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items]
Intangible Assets, Gross beginning	4,911
Intangible Assets, Gross Additions and Retirements, net	1,432	4,911
Intangible Assets, Gross ending	6,343	4,911
Accumulated Amortization and Impairment, beginning	(191)
Accumulated Amortization and Impairment, Expense and Retirements, net	(6,152)	(191)
Accumulated Amortization and Impairment, ending	(6,343)	(191)
Intangible Assets, Net ending		4,720
Intangible Assets, Net beginning	4,720
Non-compete agreements [Member]
Goodwill and Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items]
Intangible Assets, Gross beginning	1,202
Intangible Assets, Gross Additions and Retirements, net		1,202
Intangible Assets, Gross ending	1,202	1,202
Accumulated Amortization and Impairment, beginning	(60)
Accumulated Amortization and Impairment, Expense and Retirements, net	(1,142)	(60)
Accumulated Amortization and Impairment, ending	(1,202)	(60)
Intangible Assets, Net ending		1,142
Intangible Assets, Net beginning	1,142
Capitalized website costs [Member]
Goodwill and Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items]
Intangible Assets, Gross beginning	245	139
Intangible Assets, Gross Additions and Retirements, net		106
Intangible Assets, Gross ending	245	245
Accumulated Amortization and Impairment, beginning	(100)	(48)
Accumulated Amortization and Impairment, Expense and Retirements, net	(145)	(52)
Accumulated Amortization and Impairment, ending	(245)	(100)
Intangible Assets, Net ending		145
Intangible Assets, Net beginning	$ 145	$ 91

Business Combination (Details) - USD ($) $ in Thousands		3 Months Ended	5 Months Ended	9 Months Ended
Business Combination (Details) - USD ($) $ in Thousands	Aug. 10, 2022	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2022
Business Combination (Details) [Line Items]
Business acquisition description				The aggregate consideration for the Lab Society Acquisition consisted of: $4.0 million in cash, subject to certain adjustments for working capital, cash, and indebtedness of Lab Society at closing; 42,561 shares of Common Stock (the “Buyer Shares”); and the Earn-out Consideration (as defined below), to the extent earned.
Transaction and related costs (in Dollars)		$ 0		$ 66
Aggregate consideration, description				The aggregate consideration for the Interest Purchase and the Merger consisted of: (a) the sum of $30 million in cash, plus consideration payable to holders of outstanding Sinclair equity awards, subject to certain adjustments for working capital, cash and indebtedness, payable in connection with the Interest Purchase; (b) the number of shares of Common Stock, subject to adjustment, equal to the quotient of (i) $20.0 million divided by (ii) the volume weighted-average price per share of Common Stock on The Nasdaq Capital Market for the 30 consecutive trading days ending on the Execution Date (the “VWAP Price”), issuable in connection with the Merger; and (c) the True-Up Buyer Shares, if any (as defined below), issuable in connection with the Merger.
Aggregate purchase, description				However, in no event shall the aggregate purchase price paid by the Company pursuant to the terms of the Purchase Agreement, taking into account any Aggregate True-Up Payment in favor of the Sinclair Members, exceed $65.0 million.
Purchase agreement description	On August 10, 2022, the Company entered into a post-closing adjustment settlement agreement (“Agreement”) with Sinclair. The Agreement was entered into in connection with the Purchase Agreement. According to the Purchase Agreement, $2.5 million was held by the escrow agent as the Adjustment Escrow Amount, $4.5 million was held by the escrow agent as the Indemnity Escrow Amount and 11,760 Buyer Shares were held by the Company as the Holdback Buyer Shares. During the three-month period ended September 30, 2022, the Company made the final Aggregate True-up Payment of approximately $5.6 million, of which, $3.3 million was paid in cash and 8,704 Holdback Buyer Shares were released to the Sinclair Members and the Company received $1.4 million from the Adjustment Escrow Amount, and the remaining $1.1 million balance of the Adjustment Escrow Amount became part of the Indemnity Escrow Amount.
Buyer shares issuable to certain members				8,888
Buyer shares working capital				1,456
Buyer shares pure purchase agreement				7,432
Pure purchase agreement, description				The Pure Purchase Agreement includes customary post-closing adjustments, representations and warranties and covenants of the parties. The Members may become entitled to additional consideration with a value of up to $3.0 million based on the eligible net revenues achieved by the PurePressure business during the fiscal years ending December 31, 2022 and December 31, 2023, of which 40% will be payable in cash and the remaining 60% will be payable by issuing shares of Common Stock (collectively, the “Earn-out Consideration”).
Holdback Lab Buyer Shares [Member]
Business Combination (Details) [Line Items]
Shares issuable		12,768		12,768
Working capital				2,785
Shares subject to merger agreement				9,983
Acquisition of Lab Society [Member]
Business Combination (Details) [Line Items]
Business acquisition description				The Owners may become entitled to additional consideration with a value of up to $3.5 million based on the eligible net revenues achieved by the Lab Society business during the fiscal years ending December 31, 2022 and December 31, 2023, of which 50% will be payable in cash and the remaining 50% will be payable by issuing shares of Common Stock.
Revenue (in Dollars)			$ 4,000
Cascade Sciences, LLC [Member]
Business Combination (Details) [Line Items]
Equity interest percentage		100.00%		100.00%
PurePressure [Member]
Business Combination (Details) [Line Items]
Transaction and related costs (in Dollars)		$ 0		$ 563
Intangible assets acquired (in Dollars)				$ 4,000
Common stock		32,918		32,918

Business Combination (Details) - Schedule of components and the allocation of the purchase price $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Acquisition of Lab Society [Member]
Purchase price consideration
Estimated closing proceeds	$ 4,002
Transaction expenses	80
Closing buyer shares	1,904
Holdback buyer shares	816
Earn-out consideration	1,420
Estimated working capital adjustment	(255)
Fair value of total consideration transferred	7,967
Total purchase price, net of cash acquired	7,402
Fair value allocation of purchase price
Cash and cash equivalents	565
Accounts receivable	511
Inventory	2,130
Prepaid expenses and other current receivables	55
Right - of-use assets, net	304
Property and equipment, net	177
Prepaid and refundable taxes	194
Accounts payable, accrued expenses, and other current liabilities	(1,244)
Deferred revenue	(963)
Deferred tax liability	(237)
Finance lease liabilities, current	(36)
Finance lease liabilities, non-current	(35)
Operating lease liabilities, current	(112)
Operating lease liabilities, non-current	(192)
Acquired intangible assets	2,462
Goodwill	4,388
Total purchase price	7,967
Acquisition of PurePressure [Member]
Purchase price consideration
Estimated closing proceeds	3,613
Indebtedness paid	320
Transaction expenses	115
Closing buyer shares	2,211
Holdback buyer shares	654
Earn-out consideration	707
Estimated working capital adjustment	330
Fair value of total consideration transferred	7,950
Total purchase price, net of cash acquired	7,647
Fair value allocation of purchase price
Cash and cash equivalents	303
Accounts receivable	48
Inventory	1,537
Prepaid expenses and other current receivables	61
Other non-current assets	16
Accounts payable and accrued expenses	(765)
Right - of-use assets, net	191
Property and equipment, net	219
Deferred revenue	(762)
Finance lease liabilities, current	(4)
Finance lease liabilities, non-current	(10)
Notes payable, current	(260)
Notes payable, non-current	(12)
Operating lease liabilities, current	(117)
Operating lease liabilities, non-current	(74)
Acquired intangible assets	3,037
Goodwill	4,542
Total purchase price	$ 7,950

Business Combination (Details) - Schedule of intangible assets consist of trade names, technology, and customer relationships $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Acquisition of Lab Society [Member] \| Trade Names [Member]
Identified intangible assets
Asset Value	$ 317
Useful Life	5 years
Acquisition of Lab Society [Member] \| Acquired developed Technology [Member]
Identified intangible assets
Asset Value	$ 1,432
Useful Life	8 years
Acquisition of Lab Society [Member] \| Customer relationships [Member]
Identified intangible assets
Asset Value	$ 713
Useful Life	6 years
Acquisition of Lab Society [Member] \| Total identified intangible assets [Member]
Identified intangible assets
Asset Value	$ 2,462
Cascade and Precision [Member] \| Trade Names [Member]
Identified intangible assets
Asset Value	$ 1,260
Cascade and Precision [Member] \| Trade Names [Member] \| Minimum [Member]
Identified intangible assets
Useful Life	6 years
Cascade and Precision [Member] \| Trade Names [Member] \| Maximum [Member]
Identified intangible assets
Useful Life	7 years
Cascade and Precision [Member] \| Acquired developed Technology [Member]
Identified intangible assets
Asset Value	$ 3,818
Useful Life	5 years
Cascade and Precision [Member] \| Customer relationships [Member]
Identified intangible assets
Asset Value	$ 3,609
Cascade and Precision [Member] \| Customer relationships [Member] \| Minimum [Member]
Identified intangible assets
Useful Life	7 years
Cascade and Precision [Member] \| Customer relationships [Member] \| Maximum [Member]
Identified intangible assets
Useful Life	8 years
Cascade and Precision [Member] \| Total identified intangible assets [Member]
Identified intangible assets
Asset Value	$ 9,889
Cascade and Precision [Member] \| Non-compete agreements [Member]
Identified intangible assets
Asset Value	$ 1,202
Useful Life	5 years
PurePressure [Member] \| Trade Names [Member]
Identified intangible assets
Asset Value	$ 227
Useful Life	5 years
PurePressure [Member] \| Acquired developed Technology [Member]
Identified intangible assets
Asset Value	$ 1,093
Useful Life	8 years
PurePressure [Member] \| Total identified intangible assets [Member]
Identified intangible assets
Asset Value	$ 3,037
PurePressure [Member] \| Non-compete agreements [Member]
Identified intangible assets
Asset Value	$ 1,717
Useful Life	5 years

Business Combination (Details) - Schedule of components and the allocation of the purchase price - Cascade and Precision [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Purchase price consideration
Cash paid to Sinclair Members at the close	$ 23,000
Cash contributed to escrow accounts at the close	7,000
Cash paid for excess net working capital	1,430
Stock issued at the close	14,535
Fair value of contingent consideration to be achieved	3,953
Fair value of total consideration transferred	49,918
Total purchase price, net of cash acquired	48,630
Fair value allocation of purchase price
Cash and cash equivalents	1,288
Accounts receivable	897
Inventory	6,761
Prepaid expenses and other current receivables	1,736
Property and equipment, net	970
Right-of-use assets, net	730
Capitalized web costs, net	2
Accounts payable and accrued expenses	(9,223)
Deferred revenue	(5,419)
Long-term debt	(1,961)
Operating lease liabilities, current	(392)
Operating lease liabilities, non-current	(362)
Acquired intangible assets	9,889
Goodwill	45,002
Total purchase price	$ 49,918

Debt (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended		9 Months Ended	12 Months Ended
	Aug. 18, 2022	Aug. 07, 2022	Mar. 14, 2022	Aug. 18, 2022	Jun. 23, 2022	Sep. 30, 2022	Dec. 31, 2021
Debt (Details) [Line Items]
Securities purchase agreements description			On March 14, 2022, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with the Investor, pursuant to which the Company agreed to issue and sell to the Investor, in a private placement transaction, in exchange for the payment by the Investor of $65 million, less applicable expenses, as set forth in the Securities Purchase Agreement, a senior secured promissory note in an aggregate principal amount of $65 million (the “SPA Note”), and a SPA Warrant to purchase up to an aggregate of 688,111 shares of Common Stock.			If an event of default under the Exchange Note occurs, the Investor can elect to redeem the Exchange Note for cash equal to 115% of the then-outstanding principal amount of the Note (or such lesser principal amount accelerated by the Investor), plus accrued and unpaid interest, including default interest, which accrues at a rate per year equal to 15% from the date of a default or event of default.
Exchange agreement payment (in Dollars)	$ 35,200
Original principal amount (in Dollars)	$ 35,000
Purchase of common stock (in Shares)	1,422,764
Warrant purchase shares (in Shares)				688,111
Purchase of shares (in Shares)				688,111		2,110,875
Interest rate percentage , description						The Exchange Note will mature on the three-year anniversary of its issuance (the “Maturity Date”) and contains a 9.0% annualized interest rate, with interest to be paid monthly, in cash, beginning September 1, 2022.
amortization payments rate						9.00%
Interest on rate per year percentage						20.00%
Original principal amount						102.50%
Fundamental change percentage						102.50%
Outstanding principal amount percentage						115.00%
Accrues at rate per annum						15.00%
Participate any debt					1.00%	30.00%
Exercise price per share (in Dollars per share)						$ 21.5
Exercise price per share (in Dollars per share)						$ 12.3
Equity financing amount (in Dollars)						$ 15,000
Warrant description						The Warrant Liabilities will each provide that in no event will the number of shares of Common Stock issued upon exercise of such warrant result in the Investor’s beneficial ownership exceeding 4.99% of the Company’s shares of Common Stock outstanding at the time of exercise (which percentage may be decreased or increased by the Investor, but to no greater than 9.99%, and provided that any increase above 4.99% will not be effective until the sixty-first day after notice of such request by the Investor to increase its beneficial ownership limit has been delivered to the Company).
Aggregate shares (in Shares)						530,858
Total proceeds (in Dollars)						$ 779	$ 159
Maturity date						May 07, 2022
Interest payments (in Dollars)		$ 24
PPP loan [Member]
Debt (Details) [Line Items]
Maturity date					May 07, 2025
Loan forgiven (in Dollars)						$ 779
Bears interest percentage					1.00%

Debt (Details) - Schedule of debt consisted - USD ($)
$ in Thousands

Sep. 30, 2022

Dec. 31, 2021

Schedule Of Debt Consisted Abstract

$ 35,000

PPP Loan

726

804

Navitas Loan

Other notes payable

^[1]

218

297

Total debt

35,971

1,101

Less: unamortized debt discount

(5,099)

Total debt, net of debt discount

30,872

1,101

Less: current portion, net of current unamortized debt discount

(492)

(1,089)

Long-term debt

$ 30,380

$ 12

[1]	Other notes payable relates to a one-year insurance premium that was financed over nine months.

Debt (Details) - Schedule of short-term and long-term portion of debt $ in Thousands	Sep. 30, 2022 USD ($)
Short-Term [Member]
Debt Instrument [Line Items]
Direct issuance costs	$ 191
Principal
Unamortized discount
Net carrying amount
Long-Term [Member]
Debt Instrument [Line Items]
Direct issuance costs	454
Principal	35,000
Unamortized discount	(5,099)
Net carrying amount	29,901
Notes payable, net [Member]
Debt Instrument [Line Items]
Direct issuance costs	645
Principal	35,000
Unamortized discount	(5,099)
Net carrying amount	$ 29,901

Debt (Details) - Schedule of future minimum payments $ in Thousands	Sep. 30, 2022 USD ($)
Schedule Of Future Minimum Payments Abstract
Remaining 2022	$ 269
2023	303
2024	282
2025	35,117
2026 and thereafter
Total future payments	$ 35,971

Debt (Details) - Schedule of PPP loan balances by current and non-current - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Ppp Loan Balances By Current And Non Current Abstract
Balance Sheet Location, PPP Loan, current	Long-term debt, current
PPP Loan, current	$ 256	$ 792
Balance Sheet Location, PPP Loan, non-current	Long-term debt
PPP Loan, non-current	$ 470	12
Total PPP Loan outstanding	$ 726	$ 804

Leases (Details)	Sep. 30, 2022	Dec. 31, 2021
Leases (Details) [Line Items]
Lease term	12 months
Weighted-average discount rate	7.27%	7.16%
Minimum [Member]
Leases (Details) [Line Items]
Finance leases terms	1 year
Leases remaining lease terms	1 year
Maximum [Member]
Leases (Details) [Line Items]
Finance leases terms	5 years
Leases remaining lease terms	5 years

Leases (Details) - Schedule of operating activity - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Schedule Of Operating Activity Abstract
Operating lease cost	$ 293	$ 100	$ 828	$ 184
Finance lease cost:
Amortization of right-of-use assets	54	44	148	134
Interest on lease liabilities	7	10	26	32
Total lease cost	$ 354	$ 154	$ 1,002	$ 350

Leases (Details) - Schedule of financing lease activity - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Assets
Balance Sheet Classification, Right-of-use assets, net	Right-of-use, net
Right-of-use assets, net	$ 2,470	$ 1,479
Balance Sheet Classification, Finance lease assets	Property and equipment, net
Finance lease assets	$ 304	380
Total lease assets	$ 2,774	1,859
Current:
Balance Sheet Classification, Operating Cuurent	Operating lease liabilities, current
Operating	$ 822	814
Balance Sheet Classification, Financing Current	Accrued expenses and other current liabilities
Financing	$ 153	156
Non-current:
Balance Sheet Classification, Operating Non Current	Operating lease liabilities, non-current
Operating	$ 1,744	704
Balance Sheet Classification, Financing Non Current	Other non-current liabilities
Financing	$ 187	293
Total lease liabilities	$ 2,906	$ 1,967
Weighted-average remaining lease term – operating leases	3 years 8 months 4 days	3 years 1 month 9 days
Weighted-average remaining lease term – finance leases	2 years 6 months	2 years 4 months 9 days
Weighted-average discount rate – operating leases	6.70%	8.03%
Weighted-average discount rate – finance leases	7.84%	6.29%

Leases (Details) - Schedule of maturities of operating and finance lease liabilities $ in Thousands	Sep. 30, 2022 USD ($)
Schedule Of Maturities Of Operating And Finance Lease Liabilities Abstract
Operating Lease, Remaining 2022	$ 227
Finance Lease, Remaining 2022	37
Operating Lease, 2023	921
Finance Lease, 2023	182
Operating Lease, 2024	614
Finance Lease, 2024	91
Operating Lease, 2025	493
Finance Lease, 2025	51
Operating Lease, 2026	461
Finance Lease, 2026	15
Thereafter	200
Thereafter
Operating Lease, Total minimum lease payments	2,916
Finance Lease, Total minimum lease payments	376
Operating Lease, Less imputed interest	(350)
Finance Lease, Less imputed interest	(36)
Operating Lease, Total lease liabilities	2,566
Finance Lease, Total lease liabilities	$ 340

Convertible Promissory Notes (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Feb. 01, 2021	Sep. 30, 2022	Jan. 11, 2021
Convertible Promissory Notes (Details) [Line Items]
Derivative liabilities		$ 7,100
Fair value of beneficial conversion feature		3,800
IPO [Member]
Convertible Promissory Notes (Details) [Line Items]
Conversion price (in Dollars per share)	$ 77.2
Aggregate principal amount	$ 13,100
Shares of common stock (in Shares)	169,707
Convertible Notes Payable [Member]
Convertible Promissory Notes (Details) [Line Items]
Conversion price (in Dollars per share)			$ 77.2
Gain on extinguishment		2,700
Extinguished debit		19,600
Principal		13,100
Debt discount		587
Fair value of the new convertible notes		16,900
Convertible notes principal amount		$ 13,100

Stockholders’ Equity (Details) - USD ($) $ / shares in Units, $ in Millions									1 Months Ended				3 Months Ended	6 Months Ended	9 Months Ended
	Sep. 14, 2022	Aug. 12, 2022	Feb. 01, 2022	Dec. 31, 2021	Oct. 01, 2021	Feb. 04, 2021	Feb. 01, 2021	Jan. 11, 2021	Jan. 25, 2022	Mar. 22, 2021	Feb. 19, 2021	May 31, 2020	Mar. 31, 2020	Jun. 30, 2022	Sep. 30, 2022	Jul. 11, 2022	Jan. 09, 2020
Class of Stock [Line Items]
Authorized number of shares																103,000,000
Shares of common stock																100,000,000
Preferred stock shares																3,000,000
Preferred stock shares, authorized				2,895,000											2,895,000
Additional shares of common stock		8,704									555,556
Common stock price per share (in Dollars per share)										$ 135	$ 135
Purchase of warrants						2,430	16,200			2,500	16,667
Exercise price per share (in Dollars per share)															$ 12.3
Percentage of IPO price											125.00%
Percentage of exercised											3.00%
Total net proceeds (in Dollars)										$ 80.0
Conversion price (in Dollars per share)															$ 77.72
Total net proceeds shares										638,889
Cash payment (in Dollars)	$ 2.4
Public offering, percentage	10.00%
Purchase of aggregate shares									157,064
Purchase price description									The combined purchase price for one share of Common Stock (or one Pre-Funded Warrant) and the accompanying fraction of a Common Warrant was $68.00 per share.
Pre-funded warrant description															Each Pre-Funded Warrant was exercisable into one share of Common Stock at a price per share of $0.001 (as adjusted from time to time in accordance with the terms thereof). Each Common Warrant is exercisable into one share of Common Stock at a price per share of $74.80 (as adjusted from time to time in accordance with the terms thereof) and will expire on the fifth anniversary of the initial exercise date.
Aggregate shares of common stock				24,030	66,640
Share issued			29,793
IPO [Member]
Class of Stock [Line Items]
Additional shares of common stock							540,000
Common stock price per share (in Dollars per share)						$ 100	$ 100
Additional shares of common stock							81,000
Aggregate number of shares of common stock issued percentage							3.00%
Exercise price per share (in Dollars per share)							$ 125
Percentage of IPO price							125.00%
IPO shares						621,000
Total net proceeds (in Dollars)						$ 57.0
Over-Allotment Option [Member]
Class of Stock [Line Items]
Additional shares of common stock						81,000					83,333
Exercise price per share (in Dollars per share)						$ 125				$ 168.75
Percentage of exercised						3.00%				3.00%
Additional shares of common stock										83,333
Private Placement [Member]
Class of Stock [Line Items]
Additional shares of common stock									245,035
Purchase of warrants aggregate									301,575
Purchase price per share (in Dollars per share)															$ 69
Gross proceeds (in Dollars)															$ 27.3
Public Offering [Member]
Class of Stock [Line Items]
Exercise price per share (in Dollars per share)											$ 168.75
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Designated shares																	100,000
Preferred stock shares, authorized																	3,000,000
Converted shares of common stock														137,304
Shares of common stock														169,707
Series A Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Aggregate shares													60,000
Aggregate purchase price (in Dollars)												$ 4.0	$ 6.0
Additional shares of common stock												40,000
Convertible preferred stock terms of conversion description								●the Series A Preferred Stock is convertible, at any time after the issuance or immediately prior to the closing of a public transaction, into Common Stock in an amount of shares equal to (i) the product of the Series A Preferred Stock original price plus accrued but unpaid dividends on the shares being converted, multiplied by the number of shares of Series A Preferred Stock being converted, divided by (ii) a conversion price of $77.20 per share (after the reverse split taking effect); and ● immediately prior to the consummation of a public transaction, the outstanding principal amount of the Convertible Notes together with all accrued and unpaid interest shall convert into a number of fully paid and non-assessable shares of Common Stock equal to the quotient of (i) the outstanding principal amount of the Convertible Notes together with all accrued and unpaid interest thereunder immediately prior to such public transaction divided by (ii) a conversion price of $77.20 per share (after the reverse split taking effect).

Stock-Based Compensation and Employee Benefit Plans (Details) - USD ($)		3 Months Ended		9 Months Ended
	Jun. 08, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Jul. 11, 2022	Apr. 29, 2022
Stock-Based Compensation and Employee Benefit Plans (Details) [Line Items]
Shares authorized						103,000,000
Stock option compensation expense		$ 1,600	$ 941	$ 3,500	$ 4,000,000
Unrecognized compensation cost		$ 4,300,000		$ 4,300,000
2022 Plan [Member]
Stock-Based Compensation and Employee Benefit Plans (Details) [Line Items]
Shares available to be granted	529,665			64,688
Shares authorized	200,000
Shares issued and outstanding	329,665
Two Zero Two Two Employee Stock Purchase Plan [Member]
Stock-Based Compensation and Employee Benefit Plans (Details) [Line Items]
Common stock shares reserved		50,000		50,000			50,000
Fair market value percentage				85.00%
Fair market value exercise		85.00%		85.00%
Purchase of common stock		$ 25		$ 25

Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of valuation of options granted	9 Months Ended
	Sep. 30, 2022
Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of valuation of options granted [Line Items]
Volatility	40.00%
Dividend yield	0.00%
0% Expected life (years)	10 years
Forfeiture rate	0.00%
Minimum [Member]
Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of valuation of options granted [Line Items]
Risk-free interest rate	1.10%
Dividend yield	0.00%
Maximum [Member]
Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of valuation of options granted [Line Items]
Risk-free interest rate	1.63%
Dividend yield	4.06%

Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of option activity under the company's stock option plans - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Schedule Of Option Activity Under The Companys Stock Option Plans Abstract
Number of Options, outstanding beginning	356,429	313,311
Weighted- Average Exercise Price, outstanding beginning	$ 71.8	$ 35.1
Aggregate Intrinsic Value, outstanding beginning	$ 12,572
Number of Options, Granted		152,002
Weighted- Average Exercise Price, Granted		$ 121.3
Number of Options, Options vested and exercisable	218,172
Weighted- Average Exercise Price, Options vested and exercisable	$ 62.87
Number of Options, Options vested and expected to vest	272,209
Weighted- Average Exercise Price, Options vested and expected to vest	$ 71.93
Number of Options, Exercised	(851)	(65,763)
Weighted- Average Exercise Price, Exercised	$ 22.92	$ 32.3
Number of Options, Forfeited	(47,013)	(43,021)
Weighted- Average Exercise Price, Forfeited	$ 51.11	$ 39.8
Number of Options, Canceled	(22,890)	(100)
Weighted- Average Exercise Price, Canceled	$ 92.93	$ 44.3
Number of Options, outstanding Ending	285,675	356,429
Weighted- Average Exercise Price, outstanding Ending	$ 73.66	$ 71.8
Aggregate Intrinsic Value, outstanding Ending		$ 12,572

Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of restricted stock units activity	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Schedule Of Restricted Stock Units Activity Abstract
Number of Shares, Unvested at Beginning \| shares
Weighted- Average Grant Date Fair Value, Unvested at Beginning \| $ / shares
Number of Shares, Granted \| shares	188,800
Weighted- Average Grant Date Fair Value, Granted \| $ / shares	$ 12.62
Number of Shares, Vested \| shares	(20,000)
Weighted- Average Grant Date Fair Value, Vested \| $ / shares	$ 19.2
Number of Shares, Forfeited \| shares	(9,500)
Weighted- Average Grant Date Fair Value, Forfeited \| $ / shares	$ 15.7
Number of Shares, Unvested at Ending \| shares	159,300
Weighted- Average Grant Date Fair Value, Unvested at Ending \| $ / shares	$ 12.46

Stock Warrants (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Stock Warrants (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Stock Warrants [Member]
Stock Warrants (Details) [Line Items]
Exercise of warrants	$ 1	$ 4	$ 2	$ 9

Stock Warrants (Details) - Schedule of company’s warrant activity - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Warrant [Member]
Class of Warrant or Right [Line Items]
Number of Warrants, outstanding beginning	27,184	82,817
Number of Warrants, Granted	2,569,518	37,797
Number of Warrants, Exercised	(165,915)	(93,430)
Number of Warrants, outstanding Ending	2,430,787	27,184
Weighted Average Exercise Price [Member]
Class of Warrant or Right [Line Items]
Weighted average exercise price, outstanding beginning	$ 0.2	$ 0.2
Weighted Average Exercise Price, Granted	21.35	14.72
Weighted Average Exercise Price, Exercised	0.01	6.07
Weighted Average Exercise Price, outstanding ending	$ 22.57	$ 0.2

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended	9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Income Taxes [Abstract]
Income tax rate			0.00%		0.20%	0.00%
Income taxes (in Dollars)			$ 0
Income tax benefit (in Dollars)		$ 200		$ 62	$ (262)
Deferred tax assets	21.00%		21.00%		21.00%	21.00%

Net loss attributable to Agrify Corporation

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Net Loss Per Share (Details) - Schedule of basic and diluted net loss per share - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Sep. 30, 2021

Numerator:

$ (46,268)

$ (9,758)

$ (148,551)

$ (19,204)

Accrued dividend attributable to Preferred A Stockholders

(61)

Net loss available for Common Stockholders

$ (46,268)

$ (9,758)

$ (148,551)

$ (19,265)

Denominator:

Weighted-average common shares outstanding – basic and diluted (in Shares)

^[1]

2,670,501

2,083,439

2,596,649

1,806,874

Net loss per share attributable to Common Stockholders – basic and diluted (in Dollars per share)

^[1]

$ (17.33)

$ (4.68)

$ (57.21)

$ (10.66)

[1]

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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Net Loss Per Share (Details) - Schedule of anti-dilutive shares - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	2,875,762	383,613
Options outstanding [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	285,675	356,429
Restricted stock units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	159,300
Warrants outstanding [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	2,430,787	27,184

Commitments and Contingencies (Details) - USD ($)		1 Months Ended			9 Months Ended
Commitments and Contingencies (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2022	Jun. 28, 2022	Dec. 29, 2021	Sep. 30, 2022	Dec. 31, 2021	Feb. 28, 2021	Sep. 07, 2019
Commitments and Contingencies (Details) [Line Items]
Affiliated entities					$ 800,000
Horticulture grow lights			$ 623,000
Purchase order mack amount							$ 5,200,000
Purchase order increased	$ 11,500,000
Minimum purchases amount first year						$ 309,000
Minimum purchases amount second year						$ 660,000
Production service fee				$ 300
Agreement term				10 years
Ora pharm purchased		$ 1,600,000
Bluezone Products, Inc. [Member]
Commitments and Contingencies (Details) [Line Items]
Minimum purchases amount first year								$ 480,000
Minimum purchases amount second year								$ 600,000

Related Parties (Details) $ in Thousands	9 Months Ended
Related Parties (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Related Parties [Abstract]
Down payment on inventory orders	$ 384

Related Parties (Details) - Schedule of net purchasing (sales) activity - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Sep. 30, 2021

Bluezone [Member]

$ 217

$ 5

$ 310

4D Bios [Member]

^[1]

864

1,311

Enzo [Member]

Cannae Policy Group [Member]

Topline Performance Group [Member]

NEIA [Member]

(3,217)

(1,763)

(19,572)

Greenstone [Member]

Valiant Americas, LLC. [Member]

212

(1,998)

392

(1,998)

Living Greens Farm [Member]

1,315

606

11,120

2,323

Cannae Policy Group [Member]

$ (58)

[1]	Purchases from 4D for the nine months ended September 30, 2021 include $384 thousand for a down payment on inventory orders.

Related Parties (Details) - Schedule of net related party (payable) receivable - USD ($)
$ in Thousands

Sep. 30, 2022

Dec. 31, 2021

Accounts payable, related parties

$ (8)

Cannaquip [Member]

(21)

Greenstone [Member]

Accounts receivable, related Parties

^[1]

5,308

11,177

Living Greens Farm [Member]

^[2]

NEIA [Member]

Valiant Americas, LLC. [Member]

3,500

Topline Performance Group [Member]

(599)

(922)