0001213900-24-000433 | 10-Q | XBRL Viewer

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Debt (Details) - Schedule of Short-Term and Long-Term Portion $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Short-Term [Member]
Debt (Details) - Schedule of Short-Term and Long-Term Portion [Line Items]
Principal
Unamortized discount	316
Net carrying amount	316
Long-Term [Member]
Debt (Details) - Schedule of Short-Term and Long-Term Portion [Line Items]
Principal	18,509
Unamortized discount	298
Net carrying amount	18,807
Notes Payable, Net [Member]
Debt (Details) - Schedule of Short-Term and Long-Term Portion [Line Items]
Principal	18,509
Unamortized discount	614
Net carrying amount	$ 19,123

Stockholders’ Equity	9 Months Ended
Sep. 30, 2023
Stockholders’ Equity [Abstract]
Stockholders’ Equity	Note 10 — Stockholders’ Equity On July 11, 2022, the Company increased its authorized number of shares to 8,000,000, consisting of: 5,000,000 shares of Common Stock, par value $0.001 per share and 3,000,000 shares of preferred stock, par value $0.001 per share. On January 9, 2020, the Company designated 105,000 shares of the 3,000,000 authorized shares of Preferred Stock, as Series A Convertible Preferred Stock (“Series A Preferred Stock”). On March 1, 2023, the Company further increased its authorized number of shares to 13,000,000, consisting of: 10,000,000 shares of Common Stock, par value $0.001 per share and 3,000,000 shares of preferred stock, par value $0.001 per share. 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 12,253 shares (the “SA Shares”) of Common Stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 7,853 shares of Common Stock and warrants to purchase up to an aggregate of 15,079 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 $1,360.00 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 (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 $1,496.00 (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 (“CEO”) of the Company, and Stuart Wilcox, who formerly served as our Chief Operating Officer, and at the time he 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 $1,380.00 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 3,332 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 435 shares of its Common Stock to the Precision and Cascade shareholders for contingent liabilities. On December 31, 2021, the Company issued an aggregate of 1,202 shares of its Common Stock to the PurePressure shareholders in connection with the Company’s acquisition of PurePressure. On January 31, 2023, the remaining 372 Holdback Buyer Shares were released, including 6 Holdback Buyer Shares that were withheld to cover a tax indemnification claim in accordance with the Purchase Agreement. On February 1, 2022, the Company issued an aggregate of 1,491 shares of its Common Stock to the Lab Society shareholders in connection with the Company’s acquisition of Lab Society. On April 28, 2023, the Company issued the remaining 499 Holdback Buyer Shares to the Lab Society Owners in accordance with the Lab Society Merger Agreement. At The Marketing Offering On October 18, 2022, the Company entered into the ATM Program with the Agent pursuant to which it 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 Program allowed 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. As of December 31, 2022, the Company sold 306,628 shares of Common Stock, under the ATM at an average price of $50.85 per share, resulting in gross proceeds of $15.6 million, and net proceeds of $15.0 million after commissions and fees to the Agent totaling $0.5 million and legal fees totaling $0.1 million. $3.0 million of the proceeds under the ATM Program were used to repay amounts due to the Investor under the Exchange Note. The Company used 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. Due to the late filing of this Annual Report on Form 10-K, the Company is no longer eligible to utilize the registration statement on Form S-3 relating to the ATM Program, and does not anticipate any further sales under the ATM Program in the foreseeable future. Confidentially Marketed Public Offering On December 16, 2022, the Company issued 594,232 shares of its Common Stock, Pre-Funded 2022 Warrants to purchase 75,000 shares of its Common Stock and accompanying December 2022 Warrants to purchase 1,338,471 shares of the Company’s Common Stock. The Company received net proceeds from the Offering of approximately $8.2 million, after deducting underwriting discounts and commissions and estimated expenses. The Company intends to use the net proceeds from the Offering, together with its existing cash resources, for working capital and general corporate purposes, which may include capital expenditures and repayment of debt. The Pre-Funded 2022 Warrants were exercisable immediately upon issuance at an exercise price of $0.001 per share and do not have an expiration date. The December 2022 Warrants were exercisable immediately and have a term of exercise equal to five years from the initial exercise date at an exercise price of $13.00 per share. The offering price for the securities was $13.00 per share (or $12.98 for each Pre-Funded 2022 Warrant). The December 2022 Warrants may not be exercised by the holder to the extent that the holder, together with its affiliates, would beneficially own, after such exercise more than 4.99% of the shares of the Company’s Common Stock then outstanding (subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to the Company, provided that such limitation cannot exceed 9.99%) and provided that any increase in the beneficial ownership limitation shall not be effective until the sixty-first day after such notice is delivered. The Pre-Funded 2022 Warrants were classified as a component of permanent equity and the December 2022 Warrants were liability-classified and were recorded at the issuance date using a relative fair value allocation method. The Pre-Funded 2022 Warrants are equity-classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, and permit the holders to receive a fixed number of shares of Common Stock upon exercise. In addition, such warrants do not provide any guarantee of value or return. The December 2022 Warrants are liability-classified as there is a volatility floor and these warrants are not indexed to the Company’s own stock. As of December 31, 2022, the Company valued the December 2022 Warrants using the Black-Scholes option-pricing model and determined the fair value at $5.9 million. The key inputs to the valuation model included the annualized volatility of 98.0% and the expected term of about 5 years. Raymond Chang, Chairman and CEO, participated in the Offering and purchased 115,385 shares of Common Stock and 230,769 December 2022 Warrants for an aggregate purchase price of approximately $1.5 million. Additional information regarding the Company’s December 2022 Warrants 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 consolidated financial statements.

Stockholders’ Equity

9 Months Ended

Sep. 30, 2023

Stockholders’ Equity [Abstract]

Stockholders’ Equity

Note 10 — Stockholders’ Equity

On July 11, 2022, the Company increased its authorized number of shares to 8,000,000, consisting of: 5,000,000 shares of Common Stock, par value $0.001 per share and 3,000,000 shares of preferred stock, par value $0.001 per share. On January 9, 2020, the Company designated 105,000 shares of the 3,000,000 authorized shares of Preferred Stock, as Series A Convertible Preferred Stock (“Series A Preferred Stock”).

On March 1, 2023, the Company further increased its authorized number of shares to 13,000,000, consisting of: 10,000,000 shares of Common Stock, par value $0.001 per share and 3,000,000 shares of preferred stock, par value $0.001 per share.

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 12,253 shares (the “SA Shares”) of Common Stock, pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 7,853 shares of Common Stock and warrants to purchase up to an aggregate of 15,079 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 $1,360.00 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 (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 $1,496.00 (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 (“CEO”) of the Company, and Stuart Wilcox, who formerly served as our Chief Operating Officer, and at the time he 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 $1,380.00 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 3,332 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 435 shares of its Common Stock to the Precision and Cascade shareholders for contingent liabilities.

On December 31, 2021, the Company issued an aggregate of 1,202 shares of its Common Stock to the PurePressure shareholders in connection with the Company’s acquisition of PurePressure. On January 31, 2023, the remaining 372 Holdback Buyer Shares were released, including 6 Holdback Buyer Shares that were withheld to cover a tax indemnification claim in accordance with the Purchase Agreement.

On February 1, 2022, the Company issued an aggregate of 1,491 shares of its Common Stock to the Lab Society shareholders in connection with the Company’s acquisition of Lab Society. On April 28, 2023, the Company issued the remaining 499 Holdback Buyer Shares to the Lab Society Owners in accordance with the Lab Society Merger Agreement.

At The Marketing Offering

On October 18, 2022, the Company entered into the ATM Program with the Agent pursuant to which it 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 Program allowed 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. As of December 31, 2022, the Company sold 306,628 shares of Common Stock, under the ATM at an average price of $50.85 per share, resulting in gross proceeds of $15.6 million, and net proceeds of $15.0 million after commissions and fees to the Agent totaling $0.5 million and legal fees totaling $0.1 million. $3.0 million of the proceeds under the ATM Program were used to repay amounts due to the Investor under the Exchange Note. The Company used 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. Due to the late filing of this Annual Report on Form 10-K, the Company is no longer eligible to utilize the registration statement on Form S-3 relating to the ATM Program, and does not anticipate any further sales under the ATM Program in the foreseeable future.

Confidentially Marketed Public Offering

On December 16, 2022, the Company issued 594,232 shares of its Common Stock, Pre-Funded 2022 Warrants to purchase 75,000 shares of its Common Stock and accompanying December 2022 Warrants to purchase 1,338,471 shares of the Company’s Common Stock. The Company received net proceeds from the Offering of approximately $8.2 million, after deducting underwriting discounts and commissions and estimated expenses. The Company intends to use the net proceeds from the Offering, together with its existing cash resources, for working capital and general corporate purposes, which may include capital expenditures and repayment of debt.

The Pre-Funded 2022 Warrants were exercisable immediately upon issuance at an exercise price of $0.001 per share and do not have an expiration date. The December 2022 Warrants were exercisable immediately and have a term of exercise equal to five years from the initial exercise date at an exercise price of $13.00 per share. The offering price for the securities was $13.00 per share (or $12.98 for each Pre-Funded 2022 Warrant).

The December 2022 Warrants may not be exercised by the holder to the extent that the holder, together with its affiliates, would beneficially own, after such exercise more than 4.99% of the shares of the Company’s Common Stock then outstanding (subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to the Company, provided that such limitation cannot exceed 9.99%) and provided that any increase in the beneficial ownership limitation shall not be effective until the sixty-first day after such notice is delivered.

The Pre-Funded 2022 Warrants were classified as a component of permanent equity and the December 2022 Warrants were liability-classified and were recorded at the issuance date using a relative fair value allocation method. The Pre-Funded 2022 Warrants are equity-classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, and permit the holders to receive a fixed number of shares of Common Stock upon exercise. In addition, such warrants do not provide any guarantee of value or return. The December 2022 Warrants are liability-classified as there is a volatility floor and these warrants are not indexed to the Company’s own stock.

As of December 31, 2022, the Company valued the December 2022 Warrants using the Black-Scholes option-pricing model and determined the fair value at $5.9 million. The key inputs to the valuation model included the annualized volatility of 98.0% and the expected term of about 5 years.

Raymond Chang, Chairman and CEO, participated in the Offering and purchased 115,385 shares of Common Stock and 230,769 December 2022 Warrants for an aggregate purchase price of approximately $1.5 million.

Additional information regarding the Company’s December 2022 Warrants 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 consolidated financial statements.

- Definition

The entire disclosure for equity.

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+ Details

Leases (Details) - Schedule of Operating Activity - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule Of Operating Activity Abstract
Operating lease cost	$ 205	$ 293	$ 709	$ 828
Finance lease cost:
Amortization of right-of-use assets	21	54	112	148
Interest on lease liabilities	2	7	13	26
Total lease cost	$ 228	$ 354	$ 834	$ 1,002

Leases (Details)	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Weighted-average discount rate	7.39%	6.76%

Supplemental Consolidated Balance Sheet Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Supplemental Consolidated Balance Sheet Information [Abstract]
Recovery of bad debt	$ 0.4	$ 0.4	$ 1.0	$ 1.9
Depreciation expense	$ 0.5	$ 0.4	$ 1.5	$ 1.2

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, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Numerator:

Net loss attributable to Agrify Corporation

$ (2,092)

$ (57,413)

$ (19,224)

$ (130,235)

Denominator:

Weighted-average common shares outstanding

^[1]

1,649,741

133,526

1,426,016

129,832

Net loss per share attributable to Common Stockholders – basic

$ (1.27)

$ (429.98)

$ (13.48)

$ (1,003.1)

[1]

Periods presented have been adjusted to reflect the 1-for-20 reverse stock split on July 5, 2023. Additional information regarding 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

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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-URI https://asc.fasb.org//1943274/2147482689/260-10-45-7

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
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Reference 2: 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 13: http://www.xbrl.org/2003/role/exampleRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 7
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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Reference 37: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stock Warrants (Details) - USD ($)	3 Months Ended		9 Months Ended
Stock Warrants (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock Warrants [Member]
Stock Warrants (Details) [Line Items]
Exercise of warrants	$ 0	$ 1,000	$ 0	$ 2,000

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of Property and Equipment	Sep. 30, 2023
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 [Member] \| Minimum [Member]
Public Utility, Property, Plant and Equipment [Line Items]
Property and equipment estimated useful life	5 years
Leased equipment [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

Fair Value Measures (Details) - Schedule of Contingent Consideration $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Schedule of Contingent Consideration [Abstract]
Contingent consideration – beginning of period	$ 6,137
Accrued contingent consideration	1,420
Accretion of contingent consideration	149
Payments made on contingent liabilities	(5,550)
Change in estimated fair value	(2,156)
Contingent consideration – end of period

Net Loss Per Share

9 Months Ended

Sep. 30, 2023

Net Loss Per Share [Abstract]

Net Loss Per Share

Note 14 — 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 the Company’s Common Stock outstanding.

Basic net loss per share is calculated using the weighted-average number of Common Stock outstanding during the periods. Diluted net loss per share is computed by giving effect to all potential shares of Common Stock, including outstanding stock options, stock related to unvested restricted stock units, and outstanding warrants to the extent dilutive. 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)	2023			2022			2023			2022
Numerator:
Net loss attributable to Agrify Corporation		(2,092	)		(57,413	)		(19,224	)		(130,235	)
Denominator:
Weighted-average common shares outstanding –		1,649,741			133,526			1,426,016			129,832
Net loss per share attributable to Common Stockholders – basic and diluted	$	(1.27	)	$	(429.98	)	$	(13.48	)	$	(1,003.10	)

The Company’s potential dilutive securities, which include stock options, restricted stock units, 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 Stock 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:

	Nine months ended September 30, 2023		Nine months ended September 30, 2022
Shares subject to outstanding stock options		11,379		14,286
Shares subject to unvested restricted stock units		2,185		8,965
Shares subject to outstanding warrants		1,495,001		121,539
		1,508,565		144,790

Stockholders’ Equity (Details) - USD ($)
$ / shares in Units, $ in Millions

1 Months Ended

9 Months Ended

12 Months Ended

Jan. 31, 2023

Dec. 31, 2022

Dec. 16, 2022

Oct. 18, 2022

Feb. 01, 2022

Dec. 31, 2021

Oct. 01, 2021

Jan. 09, 2020

Jan. 25, 2022

Sep. 30, 2023

Dec. 31, 2022

Apr. 28, 2023

Apr. 01, 2023

Mar. 01, 2023

Oct. 04, 2022

Aug. 18, 2022

Aug. 17, 2022

Jul. 11, 2022

Class of Stock [Line Items]

Authorized number of shares

13,000,000

8,000,000

Shares of common stock

10,000,000

5,000,000

Common stock, par value (in Dollars per share)

$ 0.001

^[1]

$ 0.001

^[1]

$ 0.001

^[1]

$ 0.001

$ 1

$ 0.001

Preferred stock shares, authorized

2,895,000

3,000,000

Preferred stock, par value (in Dollars per share)

$ 0.001

Purchase price of pre-funded warrants (in Dollars per share)

$ 1

Common stock price per shares (in Dollars per share)

$ 1,496

Aggregate shares of common stock

1,202

3,332

Additional shares issued

375,629

Remaining shares

372

Share issued

1,491

Share issued

69,568

499

Common stock price per share (in Dollars per share)

$ 50.85

$ 4.93

Gross proceeds (in Dollars)

$ 15.6

Commissions and fees (in Dollars)

0.5

Legal fees (in Dollars)

$ 0.1

0.1

Repay amounts due (in Dollars)

$ 3.0

Aggregate shares of common stock

594,232

Purchase of warrants

71,139

Net proceeds received (in Dollars)

$ 8.2

Stockholder approval, term

5 years

Exercise price per share (in Dollars per share)

$ 13

Initial public offering per share (in Dollars per share)

$ 13

Warrants exercised price percentage

4.99%

Number of shares, percentage

9.99%

Aggregate purchase price (in Dollars)

$ 1.5

Warrants [Member]

Class of Stock [Line Items]

Purchase of warrants

75,000

Annualized volatility Percentage

98.00%

Volatility expected term

5 years

Pre-Funded Warrant [Member]

Class of Stock [Line Items]

Exercise price per share (in Dollars per share)

$ 0.001

Pre-funded warrant (in Dollars per share)

$ 12.98

Private Placement [Member]

Class of Stock [Line Items]

Purchase of warrants

15,079

Warrant per shares (in Dollars per share)

$ 1,360

Purchase price per share (in Dollars per share)

$ 1,380

Gross proceeds (in Dollars)

$ 27.3

Offering [Member]

Class of Stock [Line Items]

Purchase of warrants

1,338,471

Marketing Offering [Member]

Class of Stock [Line Items]

Purchase of warrants

230,769

ATM Program [Member]

Class of Stock [Line Items]

Additional shares of common stock

306,628

Series A Preferred Stock [Member]

Class of Stock [Line Items]

Preferred stock shares, authorized

3,000,000

Designated shares

105,000

Series A Convertible Preferred Stock [Member]

Class of Stock [Line Items]

Pre-funded warrants exercisable

Exercisable shares

Additional shares issued

435

Aggregate shares

50,000,000

Series A Convertible Preferred Stock [Member] | Private Placement [Member]

Class of Stock [Line Items]

Additional shares of common stock

12,253

Purchase of aggregate shares

7,853

Purchase price of stock (in Dollars per share)

$ 1

Black Scholes Option [Member]

Class of Stock [Line Items]

Fair value amount (in Dollars)

$ 5.9

CEO [Member]

Class of Stock [Line Items]

Additional shares of common stock

115,385

Marketing Offering [Member]

Class of Stock [Line Items]

Net proceeds (in Dollars)

$ 15.0

[1]

Periods presented have been adjusted to reflect the 1-for-20 reverse stock split on July 5, 2023. Additional information regarding the reverse stock splits may be found in Note 1 – Overview, Basis of Presentation, and Significant Accounting Policies, included in the notes to the consolidated financial statements

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Net of allowance for credit losses (in Dollars)

$ 2,535

$ 4,605

Inventory, net of reserves (in Dollars)

29,845

32,759

Net of allowance for credit losses (in Dollars)

$ 19,215

$ 33,050

Common stock, par value (in Dollars per share)

^[1]

$ 0.001

Common stock, shares authorized

^[1]

10,000,000

5,000,000

Common stock, shares issued

^[1]

1,651,281

1,038,298

Common stock, shares outstanding

^[1]

1,651,281

1,038,298

Preferred stock, par value (in Dollars per share)

$ 0.001

Preferred stock, shares authorized

2,895,000

Preferred stock, shares issued

Preferred stock, shares outstanding

Preferred A Stock

Preferred stock, par value (in Dollars per share)

$ 0.001

Preferred stock, shares authorized

105,000

Preferred stock, shares issued

Preferred stock, shares outstanding

[1]

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

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Income Statement [Abstract]

Revenue (including $0, $0, $46, and $1,763 from related parties, respectively)

$ 3,139

$ 7,019

$ 14,009

$ 52,369

Cost of goods sold

2,165

11,135

11,447

50,703

Gross profit (loss)

974

(4,116)

2,562

1,666

General and administrative

4,321

24,126

16,066

53,263

Selling and marketing

812

2,160

3,522

6,582

Research and development

486

1,747

1,864

6,269

Change in contingent consideration

(602)

(1,322)

(1,509)

Gain on disposal

(67)

(62)

Impairment of goodwill and intangible assets

69,904

Total operating expenses

5,552

27,431

20,068

134,509

Loss from operations

(4,578)

(31,547)

(17,506)

(132,843)

Interest expense, net

(363)

(4,654)

(1,562)

(7,404)

Change in fair value of warrant liabilities

1,975

16,268

3,599

47,234

Loss on extinguishment of notes payable

(38,985)

(4,631)

(38,985)

Other expense, net

874

1,506

874

1,506

Other (expense) income, net

2,486

(25,865)

(1,720)

2,351

Net loss before income taxes

(2,092)

(57,412)

(19,226)

(130,492)

Income tax benefit

262

Net loss

(2,092)

(57,412)

(19,226)

(130,230)

(Loss) income attributable to non-controlling interest

(1)

(5)

Net loss attributable to Agrify Corporation

$ (2,092)

$ (57,413)

$ (19,224)

$ (130,235)

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

$ (1.27)

$ (429.98)

$ (13.48)

$ (1,003.1)

Weighted average common shares outstanding – basic (in Shares)

^[1]

1,649,741

133,526

1,426,016

129,832

[1]

Debt (Details) - USD ($)						1 Months Ended			6 Months Ended	9 Months Ended
Debt (Details) - USD ($)	Jul. 12, 2023	May 01, 2023	Mar. 08, 2023	Aug. 07, 2022	Mar. 14, 2022	Aug. 19, 2023	Aug. 18, 2022	Jun. 23, 2022	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Apr. 28, 2023
Debt (Details) [Line Items]
Investor payment transaction					$ 65,000,000
Aggregate principal amount					$ 65,000,000
Exchange agreement payment			$ 10,300,000				$ 35,200,000
Repayment other fees										$ 5,000	$ 248,000
Original principal amount			$ 10,000,000				$ 35,000,000
Warrant purchase shares (in Shares)							71,139
Amortization payments rate			9.00%							9.00%
Interest on rate per year percentage			30.00%							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										30.00%
Equity financing amount										$ 15,000,000
Warrant description										The August 2022 Warrants 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).
Remain outstanding			$ 11,700,000
Loss on the extinguishment of debt										$ (4,631,000)	(38,985,000)
Principal balance			10,000,000
Convertible Note									30.00%
Outstanding principal amount		$ 2,000,000	$ 1,600,000
Convertible note shares of common stock (in Shares)		445,196	153,617
Shares of Common Stock (in Shares)										69,568		499
Remaining shares issued (in Shares)										375,629
Gain on debt										$ 11,609,000
Total proceeds amount										3,000,000
Debt issuance										$ 24,000	$ 508,000
Issuance remaining	$ 200,000
Interest rate	10.00%
Interest payments				$ 24,000
Common Stock [Member]
Debt (Details) [Line Items]
Aggregate shares (in Shares)					34,406
Exchange Note [Member]
Debt (Details) [Line Items]
Original principal amount										102.50%
Modified Warrant Shares [Member]
Debt (Details) [Line Items]
Exercise price per share (in Dollars per share)										$ 430
Note Exchange Warrant Shares [Member]
Debt (Details) [Line Items]
Exercise price per share (in Dollars per share)										$ 246
Note And Exchange [Member]
Debt (Details) [Line Items]
Principal amount price per share (in Dollars per share)			$ 10
Convertible Notes [Member]
Debt (Details) [Line Items]
Interest on rate per year percentage			20.00%
Fundamental change percentage									102.50%
Gross proceeds						$ 8,000,000
Interest rate per									15.00%
Conversion price per share (in Dollars per share)									$ 7.64
Aggregate excess									4.99%
Convertible Notes interest expense									$ 1,757,931,000
Accrued interest total									$ 1,041,388,000
Default Interest [Member]
Debt (Details) [Line Items]
Outstanding principal amount percentage									115.00%
PPP Loan [Member]
Debt (Details) [Line Items]
Total proceeds amount									$ 800,000
Maturity date								May 07, 2025	May 07, 2022
Loan forgiven									$ 800,000
Bears interest percentage								1.00%
Securities Exchange Agreement [Member]
Debt (Details) [Line Items]
Purchase of warrants (in Shares)							34,406
Outstanding principal amount percentage										115.00%
Common Stock [Member]
Debt (Details) [Line Items]
Repayment other fees							$ 300,000
Letter Agreement [Member]
Debt (Details) [Line Items]
Ownership percentage of common stock		4.99%								4.99%
Deferred Gain (Loss) on Early Extinguishment of Debt [Member]
Debt (Details) [Line Items]
Loss on the extinguishment of debt			$ 4,619,846,000
GIC Acquisition, LLC [Member]
Debt (Details) [Line Items]
Debt issuance	$ 300,000
Chief Executive Officer [Member]
Debt (Details) [Line Items]
Total proceeds amount	$ 500,000

Goodwill and Intangible Assets, Net

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets, Net [Abstract]

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 quarter 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 goodwill and intangible asset impairment testing purposes, the Company has one reporting unit.

During the quarter 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 was 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 goodwill and intangible assets.

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 goodwill and intangible assets, which totaled $54.7 million and $15.2 million, respectively.

Changes in goodwill consisted of the following:

(In thousands)	Year ended December 31, 2022
Goodwill - beginning of period	$	50,090
Goodwill acquired during period		4,368
Goodwill purchase accounting adjustment		289
Goodwill impairment loss		(54,747	)
Goodwill - end of period	$	—

Intangible assets, net as of December 31, 2022 were as follows:

	Intangible Assets, Gross						Accumulated Amortization and Impairment									Intangible Assets, Net
(In thousands)	January 1, 2022		Additions and Retirements, net		December 31, 2022		January 1, 2022			Expense and Retirements, net			December 31, 2022			January 1, 2022		December 31, 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		1,202		—		1,202		(60	)		(1,142	)		(1,202	)		1,142		—
Capitalized website costs		245		—		245		(100	)		(145	)		(245	)		145		—
Total	$	14,952	$	2,462	$	17,414	$	(880	)	$	(16,534	)	$	(17,414	)	$	14,072	$	—

Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Current assets:

Cash and cash equivalents

$ 154

$ 10,457

Restricted cash

10,000

Marketable securities

460

Accounts receivable, net of allowance for credit losses of $2,535 and $4,605 at September 30, 2023 and December 31, 2022, respectively

1,187

1,070

Inventory, net of reserves of $29,845 and $32,759 at September 30, 2023 and December 31, 2022, respectively

17,724

21,396

Prepaid expenses and other current assets

2,136

1,510

Total current assets

21,205

44,893

Loan receivable, net of allowance for credit losses of $19,215 and $33,050 at September 30, 2023 and December 31, 2022, respectively

11,298

12,214

Property and equipment, net

8,385

10,044

Operating lease right-of-use assets

2,036

2,210

Other non-current assets

141

326

Total assets

43,065

69,687

Current liabilities:

Accounts payable

22,160

20,543

Accrued expenses and other current liabilities

12,824

16,380

Operating lease liabilities, current

669

734

Long-term debt, current

1,140

28,833

Deferred revenue

4,079

4,112

Total current liabilities

41,372

70,602

Warrant liabilities

2,386

5,985

Other non-current liabilities

147

Operating lease liabilities, net of current

1,550

1,587

Long-term debt, net of current

18,998

407

Total liabilities

64,306

78,728

Commitments and contingencies (Note 15)

Stockholders’ (deficit) equity:

Common Stock, $0.001 par value per share, 10,000,000 and 5,000,000 shares authorized at September 30, 2023 and December 31, 2022, respectively, 1,651,281 and 1,038,298 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

^[1]

Preferred Stock

Additional paid-in capital

244,898

237,875

Accumulated deficit

(266,374)

(247,148)

Total stockholders’ deficit attributable to Agrify

(21,474)

(9,272)

Non-controlling interests

233

231

Total liabilities and stockholders’ equity

43,065

69,687

Preferred A Stock

Stockholders’ (deficit) equity:

Preferred Stock

Related Party

Current liabilities:

Related party debt, current

$ 500

[1]

Fair Value Measures (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Measures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

At September 30, 2023 and December 31, 2022, the Company’s assets and liabilities measured at fair value on a recurring basis were as follows:

	September 30, 2023								December 31, 2022
	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)	$	—	$	—	$	—	$	—	$	33	$	—	$	—	$	33
Money market funds		4		—		—		4		—		—		—		—
Corporate bonds		—		—		—		—		427		—		—		427
Total assets	$	4	$	—	$	—	$	4	$	460	$	—	$	—	$	460
Liabilities:
Warrant liabilities - January 2022 warrants		—		—		3		3		—		—		4		4
Warrant liabilities - March 2022 warrants		—		—		15		15		—		—		34		34
Warrant liabilities - August 2022 warrants		—		—		38		38		—		—		93		93
Warrant liabilities - December 2022 warrants		—		—		2,330		2,330		—		—		5,854		5,854
Total liabilities	$	—	$	—	$	2,386	$	2,386	$	—	$	—	$	5,985	$	5,985

Schedule of Composition Marketable Securities

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

(In thousands)	September 30, 2023		December 31, 2022
Current marketable securities:
Money market funds	$	4	$	—
Corporate bonds		—		427
Mutual funds		—		33
	$	4	$	460

Schedule of Contingent Consideration

The contingent earn-out payments to the sellers for each acquisition are based on the achievement of certain revenue thresholds.

(In thousands)	Year ended December 31, 2022
Contingent consideration – beginning of period	$	6,137
Accrued contingent consideration		1,420
Accretion of contingent consideration		149
Payments made on contingent liabilities		(5,550	)
Change in estimated fair value		(2,156	)
Contingent consideration – end of period	$	—

Schedule of Valuation of Warrant Liabilities

The following table summarizes the Company’s assumptions used in the valuation as of September 30, 2023 and for the year ended December 31, 2022:

	As of September 30, 2023			December 31, 2022
Stock price	$	2.17		$	6.66
Exercise price	$	1,496.00		$	1,496.00
Expected term (in years)		3.82			4.58
Volatility		136.00	%		98.30	%
Discount rate - treasury yield		4.72	%		4.05	%

The following table summarizes the Company’s assumptions used in the valuation as of September 30, 2023 and for the year ended December 31, 2022:

	As of September 30, 2023			December 31, 2022
Stock price	$	2.17		$	6.66
Exercise price	$	430.00		$	430.00
Expected term (in years)		4.38			5.13
Volatility		130.00	%		97.96	%
Discount rate - treasury yield		4.66	%		3.99	%

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, 2023:

	As of September 30, 2023			December 31, 2022
Stock price	$	2.17		$	6.66
Exercise price	$	246.00		$	246.00
Expected term (in years)		4.38			5.13
Volatility		130.00	%		97.96	%
Discount rate - treasury yield		4.66	%		3.99	%

	As of September 30, 2023			December 31, 2022
Stock price	$	2.17		$	6.66
Exercise price	$	3.45		$	13.00
Expected term (in years)		4.38			4.98
Volatility		130.00	%		98.00	%
Discount rate - treasury yield		4.66	%		3.99	%

Schedule of Changes in the Fair Value of the Level 3 Warrant Liabilities

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, 2023:

(In thousands)	Nine Months Ended September 30, 2023
Warrant liabilities – beginning of period	$	4
Change in estimated fair value		3
Warrant liabilities - March 31, 2023		7
Change in estimated fair value		(1	)
Warrant liabilities –June 30, 2023		6
Change in estimated fair value		(3	)
Warrant liabilities –September 30, 2023	$	3

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, 2023:

(In thousands)	Nine Months Ended September 30, 2023
Warrant liabilities – beginning of period	$	34
Change in estimated fair value		5
Warrant liabilities - March 31, 2023		39
Change in estimated fair value		(7	)
Warrant liabilities – June 30, 2023		32
Change in estimated fair value		(17	)
Warrant liabilities –September 30, 2023	$	15

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, 2023:

(In thousands)	Nine Months Ended September 30, 2023
Warrant liabilities – beginning of period	$	93
Change in estimated fair value		(4	)
Warrant liabilities - March 31, 2023		89
Change in estimated fair value		(12	)
Warrant liabilities – June 30, 2023		77
Change in estimated fair value		(39	)
Warrant liabilities –September 30, 2023	$	38

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, 2023:

(In thousands)	Nine Months Ended September 30, 2023
Warrant liabilities – beginning of period	$	5,854
Change in estimated fair value		(3,493	)
Warrant liabilities - March 31, 2023		2,361
Change in estimated fair value		1,885
Warrant liabilities – June 30, 2023		4,246
Change in estimated fair value		(1,916	)
Warrant liabilities –September 30, 2023	$	2,330

Fair Value Measures (Details) - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets:
Total assets	$ 4	$ 460
Liabilities:
Total liabilities	2,386	5,985
Warrant liabilities - January 2022 warrants [Member]
Liabilities:
Total liabilities	3	4
Warrant liabilities - March 2022 warrants [Member]
Liabilities:
Total liabilities	15	34
Warrant liabilities - August 2022 warrants [Member]
Liabilities:
Total liabilities	38	93
Warrant liabilities - December 2022 warrants [Member]
Liabilities:
Total liabilities	2,330	5,854
Mutual funds [Member]
Assets:
Total assets		33
Money market funds [Member]
Assets:
Total assets	4
Corporate bonds [Member]
Assets:
Total assets		427
Level 1 [Member]
Assets:
Total assets	4	460
Liabilities:
Total liabilities
Level 1 [Member] \| Warrant liabilities - January 2022 warrants [Member]
Liabilities:
Total liabilities
Level 1 [Member] \| Warrant liabilities - March 2022 warrants [Member]
Liabilities:
Total liabilities
Level 1 [Member] \| Warrant liabilities - August 2022 warrants [Member]
Liabilities:
Total liabilities
Level 1 [Member] \| Warrant liabilities - December 2022 warrants [Member]
Liabilities:
Total liabilities
Level 1 [Member] \| Mutual funds [Member]
Assets:
Total assets		33
Level 1 [Member] \| Money market funds [Member]
Assets:
Total assets	4
Level 1 [Member] \| Corporate bonds [Member]
Assets:
Total assets		427
Level 2 [Member]
Assets:
Total assets
Liabilities:
Total liabilities
Level 2 [Member] \| Warrant liabilities - January 2022 warrants [Member]
Liabilities:
Total liabilities
Level 2 [Member] \| Warrant liabilities - March 2022 warrants [Member]
Liabilities:
Total liabilities
Level 2 [Member] \| Warrant liabilities - August 2022 warrants [Member]
Liabilities:
Total liabilities
Level 2 [Member] \| Warrant liabilities - December 2022 warrants [Member]
Liabilities:
Total liabilities
Level 2 [Member] \| Mutual funds [Member]
Assets:
Total assets
Level 2 [Member] \| Money market funds [Member]
Assets:
Total assets
Level 2 [Member] \| Corporate bonds [Member]
Assets:
Total assets
Level 3 [Member]
Assets:
Total assets
Liabilities:
Total liabilities	2,386	5,985
Level 3 [Member] \| Warrant liabilities - January 2022 warrants [Member]
Liabilities:
Total liabilities	3	4
Level 3 [Member] \| Warrant liabilities - March 2022 warrants [Member]
Liabilities:
Total liabilities	15	34
Level 3 [Member] \| Warrant liabilities - August 2022 warrants [Member]
Liabilities:
Total liabilities	38	93
Level 3 [Member] \| Warrant liabilities - December 2022 warrants [Member]
Liabilities:
Total liabilities	2,330	5,854
Level 3 [Member] \| Mutual funds [Member]
Assets:
Total assets
Level 3 [Member] \| Money market funds [Member]
Assets:
Total assets
Level 3 [Member] \| Corporate bonds [Member]
Assets:
Total assets

Overview, Basis of Presentation and Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Overview, Basis of Presentation, and Significant Accounting Policies [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 a leading provider of innovative 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 we believe to be unmatched consistency, yield, and return investment at scale. The Company’s comprehensive extraction product line, which includes hydrocarbon, alcohol, 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-positioned to capture market share and create a dominant market position in the indoor cannabis 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” and the Company also has ownership interests in certain companies.

Reverse Stock Splits

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.

On July 5, 2023, the Company effected a 1-for-20 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.

Confidentially Marketed Public Offering

On December 16, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity LLC as the underwriter, pursuant to which the Company agreed to issue and sell an aggregate of 594,232 shares of its Common Stock, and, in lieu of Common Stock to certain investors that so chose, pre-funded warrants (the “Pre-Funded 2022 Warrants”) to purchase 75,000 shares of our Common Stock, and accompanying warrants (the “December 2022 Warrants”) to purchase 1,338,462 shares of the Company’s Common Stock (the “Offering”). The shares of Common Stock (or Pre-Funded 2022 Warrants) and the accompanying December 2022 Warrants will be issued separately but can only be purchased together in this Offering. Additional information regarding the Company’s December 2022 Warrants may be found in Note 4 – Fair Value Measures and Note 10 – Stockholders’ Equity, included elsewhere in the notes to the consolidated financial statements.

The aggregate gross proceeds to the Company from the Offering were approximately $8.7 million including offering costs of approximately $0.5 million for broker fees and legal expenses, for net proceeds of $8.2 million. The Company has used the net proceeds from the Offering, together with its existing cash resources, for working capital and general corporate purposes, which may include capital expenditures and repayment of debt.

Nasdaq Deficiency Notice

On October 4, 2022, the Company received a deficiency letter 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 exercised 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.

On January 19, 2023, the Company received a new deficiency letter from the Staff of Nasdaq notifying the Company that, for the previous 30 consecutive business days, the bid price for its 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 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 July 19, 2023, the Company received a notice from Nasdaq confirming its recompliance with the minimum bid price rule.

As disclosed in the Current Report on Form 8-K filed on April 17, 2023, the Company’s audit committee concluded that, as a result of inadvertent errors in the accounting for warrants previously issued by the Company, it was appropriate to restate the Company’s previously issued unaudited condensed consolidated interim financial statements as of and for the quarterly periods ended March 31, 2022, June 30, 2022 and September 30, 2022 included in the Company’s Quarterly Reports on Form 10-Q for such periods in amended quarterly reports for the affected periods. As a result of such restatements, the Company was unable to timely file the 2022 Form 10-K, the First Quarter 2023 Form 10-Q and the Second Quarter 2023 Form 10-Q without unreasonable effort or expense.

On April 18, 2023, the Company received a notice from Nasdaq (the “April Nasdaq Notice”) that it was noncompliant with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to file its Annual Report on Form 10-K (the “Form 10-K”) with the SEC by the required due date.

On May 17, 2023, the Company received a second notice from Nasdaq (the “May Nasdaq Notice”) that it remained noncompliant with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “First Quarter Form 10-Q”) with the SEC by the required due date.

On August 16, 2023, the Company received a third notice from Nasdaq that it remain noncompliant with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to file its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (the “Second Quarter Form 10-Q”) with the SEC by the required filing date (the “August Nasdaq Notice” and, together with the April Nasdaq Notice and the May Nasdaq Notice, the “Nasdaq Notices”).

The Nasdaq granted the Company an exception until October 16, 2023, to file its 2022 Form 10-K and First and Second Quarter 2023 Forms 10-Q. The Nasdaq Notice had no immediate effect on the listing of the Company’s Common Stock on The Nasdaq Stock Market LLC.

On October 17, 2023, the Company received a Staff Delisting Determination (the “Staff Determination”) from the Listing Qualifications Department of Nasdaq notifying the Company that it was not in compliance with Nasdaq’s continued listing requirements under the Listing Rule as a result of its failure to file the First Quarter Form 10-Q, the Second Quarter Form 10-Q and the Form 10-K (collectively, the “Delinquent Reports”) in a timely manner.

On November 16, 2023, the Company received a notice from Nasdaq that the Company remains noncompliant with the Listing Rule as a result of its failure to file its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 with the SEC by the required filing date (the “November Nasdaq Notice” and, together with the April Nasdaq Notice, the May Nasdaq Notice, and the August Nasdaq Notice, the “Nasdaq Notices”).

The Company timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”), and the Panel scheduled a hearing for January 11, 2024. In connection with the hearing request, the Company requested that the stay be extended through the hearing and the expiration of any additional extension period granted by the Panel following the hearing. In that regard, pursuant to the Nasdaq Listing Rules, the Panel granted the additional extension period. However, there can be no assurance that the Company will be able to regain compliance by the end of any additional extension period.

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 $0.8 million from the PPP Loan. On February 18, 2022, the Company applied for forgiveness of the outstanding balance of the PPP Loan and the application was denied by the SBA on March 18,2022. However, on June 23, 2022, the Company received a letter from Bank of America agreeing to extend the maturity date to May 7, 2025 and the loan will bear 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.

Basis of Presentation and Principles of Consolidation

Accounting for Wholly-Owned Subsidiaries

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of Agrify Corporation and its wholly-owned subsidiaries, as described above, 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, Agrify-Valiant LLC (“Agrify-Valiant”), and Agrify Brands, LLC (“Agrify Brands”), the Company first analyzes whether these entities are a variable interest entity (a “VIE”) in accordance with ASC Topic 810, Consolidation (“ASC 810”), 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.

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 and a working capital deficiency. The Company also has an accumulated deficit of $266 million as of September 30, 2023. 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, 2023, the Company had $0.2 million of cash, cash equivalents, and marketable securities. The Company had no restricted cash as of September 30, 2023. As of December 31, 2022 the Company’s restricted cash balance of $10.0 million was associated with its new senior secured note (the “Exchange Note”). Current liabilities were $41.4 million as of September 30, 2023. Additional information regarding the Company’s Exchange Note may be found in Note 8 – Debt, included elsewhere in the notes to the consolidated financial statements.

On October 18, 2022, the Company entered into the ATM Program with Canaccord Genuity LLC (the “Agent”) pursuant to which it 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 Program allowed 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. In 2022, the Company sold 306,628 shares of Common Stock under the ATM at an average price of $50.85, resulting in gross proceeds of $15.6 million and net proceeds $15.1 million after commissions and fees to the Agent totaling $0.5 million and legal fees totaling $0.1 million. As of April 1, 2023, after which time the ATM program was discontinued, the Company sold an additional 323,082 shares of Common Stock under the ATM at an average price of $4.93, resulting in gross proceeds of $1.6 million and net proceeds of $1.6 million after commissions and fees to the Agent totaling $48 thousand. $3.0 million of the proceeds under the ATM Program were used to repay amounts due to High Trail Special Situations LLC (the “Investor”) under the Exchange Note. The Company used 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. Due to the late filing of the Company’s Annual Report on Form 10-K, the Company is no longer eligible to utilize the registration statement on Form S-3 relating to the ATM Program.

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 include assumptions about collection of accounts and notes receivable, the valuation and recognition of stock-based compensation expense, valuation allowance for deferred tax assets, the valuation of inventory, and useful life of fixed assets and intangible assets. The Company bases its estimates on historical experience, known trends and other market-specific information, 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.

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 months ended September 30, 2023 and 2022.

In addition, the Company effected a 1-for-10 reverse stock split of its Common Stock on October 18, 2022 and a 1-for-20 reverse stock split of its Common Stock on July 5, 2023. 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’ equity section of the Consolidated Balance Sheet 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 and Cash Equivalents

Cash and cash equivalents consist principally of cash and deposits with maturities of three months or less as of September 30, 2023 and December 31, 2022. All cash equivalents are carried at cost, which approximates fair value.

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, marketable securities, 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 and nine months ended September 30, 2023 and 2022, the Company’s customers that accounted for 10% or more of the total revenue were as follows:

	Three months ended September 30, 2023				Three months ended September 30, 2022					Nine months ended September 30, 2023					Nine months ended September 30, 2022
(In thousands)	Amount		% of Total Revenue		Amount		% of Total Revenue			Amount		% of Total Revenue			Amount		% of Total Revenue
Company Customer Number - 136		*		*	$	908		12.9	%	$	1,930		13.8	%	$	7,054		13.5	%
Company Customer Number - 125		*		*		*		*		$	1,855		13.2	%		*		*
Company Customer Number - 139		*		*		*		*			*		*		$	8,590		16.4	%

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

Accounts Receivable, Net

As of September 30, 2023 and December 31, 2022, the Company’s customers that accounted for 10% or more of the total accounts receivable, net, were as follows:

	As of September 30, 2023					As of December 31, 2022
(In thousands)	Amount		% of Total Accounts			Amount		% of Total Accounts
Company Customer Number – 15095	$	718		60.5	%	$	352		32.9	%
Company Customer Number – 15874	$	405		34.1	%		*		*
Company Customer Number - 16491		*		*		$	123		11.5	%
Company Customer Number – 10888		*		*		$	251		23.5	%

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

Inventories

The Company values all 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.

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		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 expense 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. During construction, costs are accumulated in a construction-in-progress account, with no depreciation. Upon completion, costs are transferred to the appropriate asset account, and depreciation begins when the asset is 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.

During the quarter 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 property and equipment and accordingly performed interim testing as of June 30, 2022.

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. Accordingly, the Company concluded that the entire carrying value of its goodwill was impaired, resulting in a second-quarter impairment charge of $54.7 million in 2022. 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 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 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 intangible assets. Accordingly, the Company concluded that the entire carrying value of its intangible assets should be impaired, resulting in a second-quarter impairment charge of $15.2 million in 2022. 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 (“ASC 815”). The accounting treatment of derivative financial instruments requires that the Company identify and record certain 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.

Warrant Liabilities

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all 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 (“ASC 480”) and ASC 815. 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 ASC 480 and ASC 815. Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, 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 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 “August 2022 Exchange Agreement”). Pursuant to the August 2022 Exchange Agreement, the Company issued a new warrant to purchase 71,139 shares of Common Stock (the “Note Exchange Warrant”) and modified an existing warrant (the “SPA Warrant”) to purchase up to an aggregate of 34,406 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 “August 2022 Warrants”). Additional information regarding the August 2022 Exchange Agreement and August 2022 Warrants may be found in Note 4 – Fair Value Measures and Note 9 – Debt, included elsewhere in the notes to the consolidated financial statements.

Additionally, on April 18, 2023, the Company modified the exercise price of certain warrants, to reduce this from $13.00 per share to $3.45 per share.

Debt Issuance Costs and Debt Discount

The Company may record debt issuance costs and/or debt discounts in connection with the issuance 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

Certain convertible debt issued by the Company, 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 an 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 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 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 the Company can recognize. The Company recognizes deferred revenue and non-current 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 values of accounts receivable and accounts payable approximate their carrying values 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, directors and consultants 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 is probable. Specifically, the Company obtains written/electronic signatures on contracts and purchase orders, 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 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 the 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 nine months ended September 30, 2023 and 2022, 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 receivable 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 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 $0.6 million and $0.6 million for September 30, 2023 and December 31, 2022, 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.

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 (“Agrify Insights™”).

Capitalization of Internal Software Development Costs

The Company capitalizes certain software engineering efforts related to the continued development of Agrify Insights™ under ASC Topic 350-40 The costs incurred in the preliminary stages of development are expensed as incurred as research costs. Once the application has reached the development stage, internal and external costs incurred to develop internal-use software are capitalized and amortized on a straight-line basis over the estimated useful life of the software. Maintenance and enhancement costs, including those costs in the post-implementation stages, are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the software that result in added functionality, in which case the costs are capitalized and amortized on a straight-line basis over the estimated useful life of the software. 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. The estimated useful life of capitalized internal-use software ranges from two to five years.

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 tax asset will not be realized.

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.

The Company recognizes the benefit of a tax position when it is effectively settled. ASC 740-10-25-10, 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.

The Company’s quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the period presented. To determine the annual effective tax rate, the Company estimates both the total income (loss) before income taxes for the full year and the jurisdictions in which that income (loss) is subject to tax. The actual effective tax rate for the full year may differ from these estimates if income (loss) before income taxes is greater than or less than what was estimated or if the allocation of income (loss) to jurisdictions in which it is taxed is different from the estimated allocations.

The provision for income taxes represents Federal and state and local income taxes. The effective rate differs from statutory rates due to the effect of certain nondeductible expenses. Our effective tax rate will change from quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation, and state and local income taxes. In addition, changes in judgment from the evaluation of new information resulting in the recognition de-recognition or re-measurement of a tax position taken in a prior annual period is recognized separately in the quarter of the change.

Tax contingencies are recorded, if needed, to address potential exposure involving tax positions the Company has taken that could be challenged by tax authorities. These potential exposures could result from applications of various statutes, rules, regulations and interpretations. Any estimates of tax contingencies contain assumptions and judgments about potential actions by taxing jurisdictions. Any interest and penalties related to uncertain tax positions would be included as part of the income tax provision. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors.

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 October 18, 2022 and July 5, 2023. 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 an 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 Company adopted this standard as of January 1, 2022. The adoption of this new accounting guidance had no impact on the Company’s consolidated financial position.

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 for fiscal years beginning after December 15, 2022. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of this standard did not have a material impact on these condensed consolidated financial statements.

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 Company adopted ASU 2021-08 on January 1, 2023. The adoption of this standard did not have a material impact on these condensed consolidated financial statements.

Other recent accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Loans Receivable (Tables)

9 Months Ended

Sep. 30, 2023

Loans Receivable [Abstract]

Schedule of Breakdown of Loans Receivable by Customer

The breakdown of loans receivable by customer as of September 30, 2023 and December 31, 2022 were as follows:

(In thousands)	September 30, 2023			December 31, 2022
Customer 139	$	14,691		$	14,691
Customer 136		—			12,457
Customer 125		9,012			9,048
Customer 24096		6,810			5,890
Other – Non-TTK Solution (1)		—			3,178
Allowance for credit losses (2)(3)		(19,215	)		(33,050	)
Total loan receivable	$	11,298		$	12,214

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

(2)	The balance was written off at December 31, 2022 due to the cancellation of this TTK Solution project.

(3)	The Company established an allowance for credit losses of approximately $14.7 million related to Bud & Mary’s ongoing litigation. Approximately $4.5 million relates to Hannah.

Inventory (Tables)

9 Months Ended

Sep. 30, 2023

Inventory [Abstract]

Schedule of Inventory

Inventory consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023			December 31, 2022
Raw materials	$	24,100		$	24,960
Prepaid inventory		10,838			15,506
Finished goods		7,607			13,689
Inventory for resale		5,024			—
Inventory, gross		47,569			54,155
Inventory reserves		(29,845	)		(32,759	)
Total inventory, net	$	17,724		$	21,396

Schedule of Changes in Company’s Inventory Reserve

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

(In thousands)	Nine Months Ended September 30, 2023			Year Ended December 31, 2022
Inventory reserves – beginning of period	$	32,759		$	942
(Decrease) increase in inventory reserves		(2,914	)		31,817
Inventory reserves – end of period	$	29,845		$	32,759

Supplemental Consolidated Balance Sheet Information

9 Months Ended

Sep. 30, 2023

Supplemental Consolidated Balance Sheet Information [Abstract]

Supplemental Consolidated Balance Sheet Information

Note 3 — Supplemental Consolidated Balance Sheet Information

Accounts Receivable

Accounts receivable consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023			December 31, 2022
Accounts receivable, gross	$	3,722		$	5,675
Less allowance for credit losses		(2,535	)		(4,605	)
Accounts receivable, net	$	1,187		$	1,070

The changes in the allowance for credit losses accounts consisted of the following:

(In thousands)	Nine months ended September 30, 2023			Year ended December 31, 2022
Allowance for credit losses - beginning of period	$	4,605		$	1,415
(Recovery of) allowance for credit losses		(983	)		4,928
Write-offs of uncollectible accounts		(1,087	)		(1,510	)
Other adjustments		—			(228	)
Allowance for credit losses - end of period	$	2,535		$	4,605

The Company recognized a net recovery of bad debt income of $0.4 million, relative to a bad debt expense of $0.4 million, for the three months ended September 30, 2023 and 2022, respectively, and a net recovery of bad debt of $1.0 million, relative to a bad debt expense of $1.9 million, for the nine months ended September 30, 2023 and 2022, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023		December 31, 2022
Legal settlement receivables	$	1,206	$	—
Prepaid insurance		669		219
Prepaid expenses, other		124		230
Prepaid software		44		129
Prepaid materials		33		45
Deferred issuance costs, net		—		463
Other receivables, other		60		424
Total prepaid expenses and other current assets	$	2,136	$	1,510

Property and Equipment, Net

Property and equipment, net consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023			December 31, 2022
Leased equipment		4,465			602
Leasehold improvements	$	1,123		$	1,111
Machinery and equipment		904			1,049
Software		606			606
Computer and office equipment		588			627
Research and development laboratory equipment		183			260
Furniture and fixtures		116			504
Trade show assets		79			78
Vehicles		73			136
Total property and equipment, gross		8,137			4,973
Accumulated depreciation		(2,695	)		(2,372	)
Construction in progress		2,943			7,443
Total property and equipment, net	$	8,385		$	10,044

Depreciation expense for the three months ended September 30, 2023 and 2022 was $0.5 million and $0.4 million, respectively, and $1.5 million and $1.2 million for the nine months ended September 30, 2023 and 2022, respectively. Depreciation expense is recorded within general and administrative expenses, research and development expenses, and selling and marketing expenses depending on the nature of the property and equipment depreciated.

Other Non-Current Assets

Other non-current assets consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023		December 31, 2022
Security deposits	$	141	$	153
Long-term deferred commissions expense		—		173
Total other non-current assets	$	141	$	326

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023		December 31, 2022
Sales tax payable (1)	$	6,019	$	5,950
Accrued acquisition liabilities (2)		2,180		3,502
Accrued construction costs		1,540		2,669
Accrued interest expense		1,041		240
Compensation related fees		944		2,285
Accrued warranty expenses		585		553
Accrued professional fees		443		313
Accrued inventory purchases		63		569
Accrued consulting fees		9		20
Financing lease liabilities		—		152
Other current liabilities		—		127
Total accrued expenses and other current liabilities	$	12,824	$	16,380

(1)

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

(2)	Accrued acquisition liabilities includes both the contingent consideration and the value of held back Common Stock associated with the 2022 acquisition of Lab Society and the 2021 acquisitions of Precision, Cascade and PurePressure.

Accrued Warranty Costs

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

(In thousands)	September 30, 2023			December 31, 2022
Warranty accrual – beginning of period	$	553		$	398
Liabilities accrued for warranties issued during the period		230			264
Warranty accruals paid during the during		(198	)		(109	)
Warranty accrual – end of period		585			553

Fair Value Measures (Details) - Schedule of Valuation of Warrant Liabilities - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
January 2022 Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Stock price	$ 2.17	$ 6.66
Exercise price	$ 1,496	$ 1,496
Expected term (in years)	3 years 9 months 25 days	4 years 6 months 29 days
Volatility	136.00%	98.30%
Discount rate - treasury yield	4.72%	4.05%
March 2022 Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Stock price	$ 2.17	$ 6.66
Exercise price	$ 430	$ 430
Expected term (in years)	4 years 4 months 17 days	5 years 1 month 17 days
Volatility	130.00%	97.96%
Discount rate - treasury yield	4.66%	3.99%
August 2022 Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Stock price	$ 2.17	$ 6.66
Exercise price	$ 246	$ 246
Expected term (in years)	4 years 4 months 17 days	5 years 1 month 17 days
Volatility	130.00%	97.96%
Discount rate - treasury yield	4.66%	3.99%
December 2022 Warrants [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Stock price	$ 2.17	$ 6.66
Exercise price	$ 3.45	$ 13
Expected term (in years)	4 years 4 months 17 days	4 years 11 months 23 days
Volatility	130.00%	98.00%
Discount rate - treasury yield	4.66%	3.99%

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Operating Activity

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

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2023		2022		2023		2022
Operating lease cost	$	205	$	293	$	709	$	828
Finance lease cost:
Amortization of right-of-use assets		21		54		112		148
Interest on lease liabilities		2		7		13		26
Total lease cost	$	228	$	354	$	834	$	1,002

Schedule of Financing Lease Activity

	September 30, 2023			December 31, 2022
Weighted-average remaining lease term – operating leases		3.23 years			3.59 years
Weighted-average remaining lease term – finance leases		0 years			2.30 years
Weighted-average discount rate – operating leases		7.39	%		6.76	%
Weighted-average discount rate – finance leases		—	%		7.83	%

(In thousands)	Balance Sheet Location	September 30, 2023		December 31, 2022
Assets
Right-of-use assets, net	Right-of-use, net	$	2,036	$	2,210
Finance lease assets	Property and equipment, net		—		261
Liabilities
Operating lease liabilities, current	Operating lease liabilities, current		669		734
Operating lease liabilities, non-current	Operating lease liabilities, non-current		1,550		1,587
Total operating lease liabilities		$	2,219	$	2,321

Finance lease liabilities, current	Accrued expenses and other current liabilities		—		152
Finance lease liabilities, non-current	Other non-current liabilities		—		147
Total finance lease liabilities		$	—	$	299

Schedule of Maturities of Operating and Finance Lease Liabilities

Maturities of operating and finance lease liabilities as of September 30, 2023 are as follows:

Years ending December 31 (In thousands),	Operating lease			Finance lease
Remaining 2023	$	212		$	—
2024		782			—
2025		748			—
2026		560			—
2027		202			—
Total minimum lease payments		2,504			—
Less imputed interest		(285	)		—
Total lease liabilities	$	2,219		$	—

Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

Note 17 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued.

Nasdaq Deficiency Notices

The Nasdaq granted the Company an exception until October 16, 2023, to file its 2022 Form 10-K and First and Second Quarter 2023 Forms 10-Q (the “Delayed Reports”). The Nasdaq Notice had no immediate effect on the listing of the Company’s Common Stock on The Nasdaq Stock Market LLC. The Company filed its 2022 Form 10-K, First Quarter 2023 Form 10-Q and Second Quarter 2023 Form 10-Q, on November 28, 2023, November 28, 2023 and December 12, 2023, respectively.

On October 17, 2023, the Company received the Staff Determination from the Listing Qualifications Department of Nasdaq notifying the Company that it was not in compliance with Nasdaq’s continued listing requirements under the Listing Rule as a result of its failure to file the Delinquent Reports in a timely manner. The Company timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”), and the Panel scheduled a hearing for January 11, 2024.

Mack Molding Modification Agreement

On October 27, 2023, and with an effective date as of October 18, 2023, the Company entered into a Modification and Settlement Agreement (the “Modification Agreement”) with Mack Molding Company (“Mack”). Pursuant to the Modification Agreement, the Company and Mack agreed to settle an outstanding dispute under the Supply Agreement between the parties dated December 7, 2020 (the “Supply Agreement”). The Modification Agreement requires the Company to make payments of $500,000 and $250,000 to Mack on or before November 1, 2023 and February 15, 2024, respectively. The Company has made the first of these two payments in the amount of $500,000. Following the November 1, 2023 payment, the Company is entitled to take possession of certain Vertical Farming Units (“VFUs”) that were assembled under the Supply Agreement. The Modification Agreement also requires the Company to purchase from Mack a minimum of 25 VFUs per quarter for each quarter during 2024 and a minimum of 50 VFUs per quarter for the six quarters beginning with the first quarter of 2025. The Company is required to pay a storage fee of $25,000 per month for VFUs subject to the Modification Agreement.

Additionally, as part of the Modification Agreement, the Company agreed to issue to Mack a warrant to purchase 750,000 shares of Common Stock. The warrant has an exercise price of $4.00 per share, was exercisable upon issuance, has a term of three years from the date of issuance, and is exercisable on a cash basis unless at the time of exercise there is no effective registration statement for the resale of the underlying shares, in which case the warrant may be exercised on a cashless exercise basis at Mack’s election.

Note Purchase

On October 27, 2023, CP Acquisitions LLC (the “New Lender”), an entity affiliated with and controlled by Raymond Chang, the Company’s Chief Executive Officer, purchased the Exchange Note and the Convertible Note from their holder (the “Note Purchase”). In connection with the Note Purchase, the New Lender has agreed to waive any events of default under the acquired notes through December 31, 2023 and to enter into an agreement with the Company to extend the maturity date thereon to December 31, 2025.

Warrant Issuance

On October 27, 2023, as a condition precedent to the Note Purchase, the Company entered into a letter agreement (the “Letter Agreement”) with the holder of the Exchange Note and the Convertible Note. Pursuant to the agreement, the Company agreed to exchange $3.0 million in principal and approximately $1.1 million in accrued but unpaid interest outstanding under the Exchange Note to purchase 2,809,669 shares of common stock (the “Exchange Warrant”). Additionally, the Company agreed to exchange the 375,629 shares of common stock held in abeyance for the Investor under the terms of the Letter Agreement for a warrant to purchase 375,629 shares of common stock (the “Abeyance Warrant”).

Each warrant has an exercise price of $0.001 per share, was exercisable upon issuance, has a term of five years from the date of issuance and is exercisable on a cash basis or on a cashless exercise basis at the holder’s election.

The Exchange Warrant provides that in the event that Raymond Chang or his affiliates acquire securities from the Company, exercise convertible securities or amend the terms of convertible securities at a purchase or conversion price lower than $1.46, then the number of shares of common stock underlying Exchange Warrant will be increased to an amount equal to $3.0 million divided by such purchase or conversion price, subject to proportional adjustment in the event the Exchange Warrant has been partially exercised. Additionally, in the event that the Company has not issued equity securities in exchange for gross proceeds of at least $3.0 million to Mr. Chang or his affiliates (subject to certain offsets) by the third calendar day after the date when the Company receives stockholder approval, then on December 26, 2023, the number of shares of common stock underlying Exchange Warrant will be increased to an amount equal to $3.0 million divided by the Minimum Price as defined under Nasdaq listing rules, subject to proportional adjustment in the event the Exchange Warrant has been partially exercised.

The Letter Agreement requires that the Company issue equity securities to Mr. Chang or his affiliates for aggregate gross proceeds of at least $3.0 million, minus any funds advanced by Mr. Chang to the Company since July 1, 2023.

Note Amendment and Secured Promissory Note

On October 27, 2023, GIC and the Company amended and restated the Related Party Note (the “Restated Related Party Note”). Pursuant to the terms of the Restated Related Party Note, the Maturity Date was extended until December 31, 2023 and the Company granted a security interest in the Company’s assets that ranks junior to the Exchange Note and the Convertible Note.

Concurrent with the Restated Related Party Note, the Company issued a junior secured promissory note (the “Junior Secured Note”) to the New Lender. Pursuant to the Junior Secured Note, the New Lender will lend up to $3,000,000 to the Company, of which $2,000,000 was drawn. The Junior Secured Note bears interest at a rate of 10% per annum, will mature in full on December 31, 2023, and may be prepaid without any fee or penalty. The Junior Secured Note is a secured obligation of the Company that ranks junior to the notes acquired in the Note Purchase

On December 4, 2023, the New Lender and the Company amended and restated the Junior Secured Note (the “Junior Secured Note Amendment”). Pursuant to the terms of the Junior Secured Note Amendment, the maximum principal amount that may be loaned by CP to the Company was increased to $4,000,000.

Subsequent Events (Details) - USD ($)		1 Months Ended	9 Months Ended
Subsequent Events (Details) - USD ($)	Dec. 04, 2023	Oct. 27, 2023	Sep. 30, 2023	Aug. 18, 2022
Subsequent Event [Line Items]
Payments amount			$ 500,000
Storage fee			$ 25,000
Warrant purchase shares (in Shares)			750,000
Purchase shares of common stock (in Shares)				71,139
Exercise price per share (in Dollars per share)			$ 0.001
Warrant increased amount			$ 3,000,000
Gross proceeds			3,000,000
Divided cost			3,000,000
Junior secured note			3,000,000
Drawn amount			$ 2,000,000
Bearing interest rate			10.00%
Maximum principal amount loan was increased	$ 4,000,000
Maximum [Member]
Subsequent Event [Line Items]
Warrant exercise price (in Dollars per share)				$ 3.45
Minimum [Member]
Subsequent Event [Line Items]
Warrant exercise price (in Dollars per share)				$ 13
Warrant Issuance [Member]
Subsequent Event [Line Items]
Conversion price (in Dollars per share)			$ 1.46
Secured Promissory Note [Member]
Subsequent Event [Line Items]
Maturity date			Dec. 31, 2023
Subsequent Event [Member]
Subsequent Event [Line Items]
Extension of maturity date		Dec. 31, 2023
Forecast [Member]
Subsequent Event [Line Items]
Warrant issuance cost		$ 3,000,000
Accrued interest		1,100,000
Forecast [Member] \| Maximum [Member]
Subsequent Event [Line Items]
Modification expenses		500,000
Forecast [Member] \| Minimum [Member]
Subsequent Event [Line Items]
Modification expenses		$ 250,000
Forecast [Member] \| Warrant Issuance [Member]
Subsequent Event [Line Items]
Purchase shares of common stock (in Shares)		2,809,669
Exchange shares of common stock (in Shares)		375,629
Warrant to purchase shares (in Shares)		375,629
Mr. Chang [Member]
Subsequent Event [Line Items]
Gross proceeds			$ 3,000,000
Warrant [Member]
Subsequent Event [Line Items]
Warrant exercise price (in Dollars per share)			$ 4

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of Useful Lives	Sep. 30, 2023
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

Goodwill and Intangible Assets, Net (Details) - Schedule of Changes in Goodwill $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Schedule of Changes in Goodwill [Abstract]
Goodwill - beginning of period	$ 50,090
Goodwill acquired during period	4,368
Goodwill purchase accounting adjustment	289
Goodwill impairment loss	(54,747)
Goodwill - end of period

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482548/350-20-55-24

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1A

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of Revenue - Revenue Benchmark [Member] - Customer Concentration Risk [Member] - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

^[1]

Sep. 30, 2022

^[1]

Sep. 30, 2023

Sep. 30, 2022

Company Customer Number - 136 [Member]

Principal Transaction Revenue [Line Items]

Amount

$ 908

$ 1,930

$ 7,054

Total Revenue percentage

12.90%

13.80%

13.50%

Company Customer Number - 125 [Member]

Principal Transaction Revenue [Line Items]

Amount

$ 1,855

^[1]

Total Revenue percentage

13.20%

^[1]

Company Customer Number - 139 [Member]

Principal Transaction Revenue [Line Items]

Amount

^[1]

$ 8,590

Total Revenue percentage

^[1]

16.40%

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

- Definition

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).

+ References

+ Details

Inventory

9 Months Ended

Sep. 30, 2023

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, 2023 and December 31, 2022:

(In thousands)	September 30, 2023			December 31, 2022
Raw materials	$	24,100		$	24,960
Prepaid inventory		10,838			15,506
Finished goods		7,607			13,689
Inventory for resale		5,024			—
Inventory, gross		47,569			54,155
Inventory reserves		(29,845	)		(32,759	)
Total inventory, net	$	17,724		$	21,396

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, 2023			Year Ended December 31, 2022
Inventory reserves – beginning of period	$	32,759		$	942
(Decrease) increase in inventory reserves		(2,914	)		31,817
Inventory reserves – end of period	$	29,845		$	32,759

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

Sep. 30, 2023

Dec. 31, 2022

Schedule of Debt [Abstract]

Note payable – Exchange Note

$ 18,509

$ 31,975

PPP Loan

518

656

Navitas loan

Related party debt

500

Other notes payable

^[1]

487

Total debt

20,024

32,654

Unamortized debt premium (discount)

614

(3,415)

Total debt, net of debt discount

20,638

29,239

Less: current portion, net of current unamortized debt discount

(1,640)

(28,832)

Long-term debt, net of current

$ 18,998

$ 407

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

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, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue	$ 3,139	$ 7,019	$ 14,009	$ 52,369
Transferred at a point in time [Member]
Disaggregation of Revenue [Line Items]
Total revenue	2,831	5,657	12,384	28,675
Transferred over time [Member]
Disaggregation of Revenue [Line Items]
Total revenue	$ 308	$ 1,362	$ 1,625	$ 23,694

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

+ References

+ Details

Fair Value Measures (Details) - Schedule of Changes in the Fair Value of the Level 3 Warrant Liabilities - Level 3 [Member] - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023
January 2022 Warrants [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrant liabilities – beginning of period	$ 6	$ 7	$ 4
Change in estimated fair value	(3)	(1)	3
Warrant liabilities – ending of period	3	6	7
March 2022 Warrants [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrant liabilities – beginning of period	32	39	34
Change in estimated fair value	(17)	(7)	5
Warrant liabilities – ending of period	15	32	39
August 2022 Warrants [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrant liabilities – beginning of period	77	89	93
Change in estimated fair value	(39)	(12)	(4)
Warrant liabilities – ending of period	38	77	89
December 2022 Warrants [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrant liabilities – beginning of period	4,246	2,361	5,854
Change in estimated fair value	(1,916)	1,885	(3,493)
Warrant liabilities – ending of period	$ 2,330	$ 4,246	$ 2,361

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of Prepaid Expenses and Other Current Assets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of Prepaid Expenses and Other Current Assets [Abstract]
Legal settlement receivables	$ 1,206
Prepaid insurance	669	219
Prepaid expenses, other	124	230
Prepaid software	44	129
Prepaid materials	33	45
Deferred issuance costs, net		463
Other receivables, other	60	424
Total prepaid expenses and other current assets	$ 2,136	$ 1,510

Revenue and Deferred Revenue

9 Months Ended

Sep. 30, 2023

Revenue and Deferred Revenue [Abstract]

Revenue and Deferred Revenue

Note 2 — Revenue and Deferred Revenue

Revenue

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)	2023		2022		2023		2022
Transferred at a point in time	$	2,831	$	5,657	$	12,384	$	28,675
Transferred over time		308		1,362		1,625		23,694
Total revenue	$	3,139	$	7,019	$	14,009	$	52,369

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.

Deferred Revenue

Changes in the Company’s current deferred revenue balance for the three months ended September 30, 2023 and the year ended December 31, 2022 were as follows:

(In thousands)	Three months ended September 30, 2023			Year ended December 31, 2022
Deferred revenue – beginning of period	$	4,112		$	3,772
Additions		3,685			13,392
Recognized		(3,718	)		(13,052	)
Deferred revenue – end of period	$	4,079		$	4,112

Deferred revenue balances primarily consist of customer deposits on the Company’s cultivation and extraction solutions equipment. As of September 30, 2023 and December 31, 2022, all of the Company’s deferred revenue balances were reported as current liabilities in the accompanying consolidated balance sheets.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of Accounts Receivable - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of Accounts Receivable [Abstract]
Accounts receivable, gross	$ 3,722	$ 5,675
Less allowance for credit losses	(2,535)	(4,605)
Accounts receivable, net	$ 1,187	$ 1,070

Leases (Details) - Schedule of Maturities of Operating and Finance Lease Liabilities $ in Thousands	Sep. 30, 2023 USD ($)
Operating Lease [Member]
Leases (Details) - Schedule of Maturities of Operating and Finance Lease Liabilities [Line Items]
Operating Lease, Remaining 2023	$ 212
Operating Lease, 2024	782
Operating Lease, 2025	748
Operating Lease, 2026	560
Operating Lease, 2027	202
Operating Lease, Total minimum lease payments	2,504
Operating Lease, Less imputed interest	(285)
Operating Lease, Total lease liabilities	2,219
Finance lease [Member]
Leases (Details) - Schedule of Maturities of Operating and Finance Lease Liabilities [Line Items]
Finance Lease, Remaining 2023
Finance Lease, 2024
Finance Lease, 2025
Finance Lease, 2026
Finance Lease, 2027
Finance Lease, Total minimum lease payments
Finance Lease, Less imputed interest
Finance Lease, Total lease liabilities

Debt (Details) - Schedule of PPP Loan Balances by Current and Non-Current - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of PPP Loan Balances by Current and Non-Current [Abstract]
PPP Loan, current	$ 328	$ 255
PPP Loan, non-current	189	401
Total PPP Loan outstanding	$ 518	$ 656

Fair Value Measures (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
Fair Value Measures (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2022	Sep. 30, 2022
Fair Value Measures [Line Items]
Contingent consideration liability			$ 0.2
Second earn contingent consideration	$ 0.5
Contingent consideration	0.1
Total contingent consideration		$ 5.6
Business Combination [Member]
Fair Value Measures [Line Items]
Contingent consideration liability			$ 0.6
Second earn contingent consideration	$ 1.0

Leases (Details) - Schedule of Financing Lease Activity - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Schedule Of Financing Lease Activity Abstract
Weighted-average remaining lease term – operating leases	3 years 2 months 23 days	3 years 7 months 2 days
Weighted-average remaining lease term – finance leases	0 years	2 years 3 months 18 days
Weighted-average discount rate – operating leases	7.39%	6.76%
Weighted-average discount rate – finance leases		7.83%
Assets
Balance Sheet Classification, Right-of-use assets, net	Right-of-use, net
Right-of-use assets, net	$ 2,036	$ 2,210
Balance Sheet Classification, Finance lease assets	Property and equipment, net
Finance lease assets		261
Liabilities
Balance Sheet Classification, Operating lease liabilities, current	Operating lease liabilities, current
Operating lease liabilities, current	$ 669	734
Balance Sheet Classification, Operating lease liabilities, non-current	Operating lease liabilities, non-current
Operating lease liabilities, non-current	$ 1,550	1,587
Total operating lease liabilities	$ 2,219	2,321
Balance Sheet Classification, Finance lease liabilities, current	Accrued expenses and other current liabilities
Finance lease liabilities, current		152
Balance Sheet Classification, Finance lease liabilities, non-current	Other non-current liabilities
Finance lease liabilities, non-current		147
Total finance lease liabilities		$ 299

Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of Restricted Stock Unit Activity	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Schedule of Restricted Stock Unit Activity [Abstract]
Number of Shares, Unvested Balance begining \| shares	7,691
Weighted- Average Grant Date Fair Value,Unvested Balance begining \| $ / shares	$ 230.75
Number of Shares, Vested \| shares	(2,406)
Weighted- Average Grant Date Fair Value, Vested \| $ / shares	$ 230.8
Number of Shares, Forfeitures \| shares	(3,100)
Weighted- Average Grant Date Fair Value, Forfeitures \| $ / shares	$ 230.8
Number of Shares, Unvested Balance ending \| shares	2,185
Weighted- Average Grant Date Fair Value, Unvested Balance ending \| $ / shares	$ 230.8

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of Accounts Receivable, Net - Accounts Receivable [Member] - Customer Concentration Risk [Member] - USD ($)
$ in Thousands

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Company Customer Number – 15095 [Member]

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of Accounts Receivable, Net [Line Items]

Amount

$ 718

$ 352

% of Total Accounts Receivable

60.50%

32.90%

Company Customer Number – 15874 [Member]

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of Accounts Receivable, Net [Line Items]

Amount

$ 405

% of Total Accounts Receivable

34.10%

Company Customer Number – 16491 [Member]

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of Accounts Receivable, Net [Line Items]

Amount

^[1]

$ 123

% of Total Accounts Receivable

^[1]

11.50%

Company Customer Number - 10888 [Member]

Overview, Basis of Presentation and Significant Accounting Policies (Details) - Schedule of Accounts Receivable, Net [Line Items]

Amount

^[1]

$ 251

% of Total Accounts Receivable

^[1]

23.50%

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

Stock Warrants

9 Months Ended

Sep. 30, 2023

Stock Warrants [Abstract]

Stock Warrants

Note 12 — Stock Warrants

The following tables present all warrant activity of the Company for the nine months ended September 30, 2023 and 2022:

	Number of Warrants			Weighted- Average Exercise Price
Warrants outstanding at December 31, 2022		1,530,001		$	38.07
Exercised		(35,000	)		—
Warrants outstanding at September 30, 2023		1,495,001		$	38.07

	Number of Warrants			Weighted- Average Exercise Price
Warrants outstanding at December 31, 2021		1,358		$	4.00
Granted		128,476			427.00
Exercised		(8,295	)		0.20
Warrants outstanding at September 30, 2022		121,539		$	451.40

The Company received proceeds from the exercise of cashless warrants of $0 for the three and nine months ended September 30, 2023, and $1 thousand and $2 thousand for the three and nine months ended September 30, 2022, respectively.

Stock-Based Compensation and Employee Benefit Plans

9 Months Ended

Sep. 30, 2023

Stock-Based Compensation and Employee Benefit Plans [Abstract]

Stock-Based Compensation and Employee Benefit Plans

Note 11 — 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 26,483 shares, which includes the 10,000 shares authorized under the 2022 Plan, plus the rollover of 16,483 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, 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. As of September 30, 2023, there were 13,198 shares of Common Stock available to be granted under the Company’s 2022 Plan.

The Company’s stock compensation expense was $0.5 million and $1.6 million for the three months ended September 30, 2023 and 2022, respectively. The Company’s stock compensation expense was $2.1 million and $3.5 million for the nine months ended September 30, 2023 and 2022, respectively.

Stock Options

Stock options granted under the Company’s 2022 Plan are generally non-qualified and are granted with an exercise price equal to the market price of the Company’s Common Stock on the date of grant. The fair value of each option grant was estimated on the date of the 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 three and nine months ended September 30, 2023 and 2022.

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. 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 consolidated 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 consolidated 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.

The following table presents option activity under the Company’s stock option plans for the three and six months ended September 30, 2023:

(In thousands, except share and per share data)	Number of Options			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at January 1, 2023		13,439		$	1,518.05	$	—
Exercised		(104	)		6.67
Forfeited		(83	)		—
Expired		(54	)		1,213.74
Options outstanding at September 30, 2023		13,198		$	1,540.76	$	—

Options vested and exercisable as of September 30, 2023		11,379		$	1,467.77
Options vested and expected to vest as of September 30, 2023		12,124		$	1,498.89

As of September 30, 2023, total unrecognized compensation expense related to unvested options under the Company’s 2022 Plan was $1.3 million, which is expected to be recognized over a weighted average period of 0.46 years.

The following table summarizes information about options vested and exercisable at September 30, 2023:

		Options Vested and Exercisable
Price ($)		Number of Options		Weighted-Average Remaining Contractual Life (Years)		Weighted-Average Exercise Price
$	456.00		3,758		5.38	$	456.00
$	972.00		3,526		5.47	$	972.00
$	1,536.00		25		9.59	$	1,536.00
$	1,840.00		146		12.39	$	1,840.00
$	2,768.00		3,924		10.36	$	2,768.00

The following table summarizes information about options expected to vest after September 30, 2023:

		Options Vested and Expected to Vest
Price ($)		Number of Options		Weighted-Average Remaining Contractual Life (Years)		Weighted-Average Exercise Price
	456.00		3,758		5.38	$	456.00
	972.00		3,566		5.47	$	972.00
	1,536.00		50		9.59	$	1,536.00
	1,840.00		250		12.39	$	1,840.00
	2,768.00		4,500		10.36	$	2,768.00

Restricted Stock Units

Under the 2022 Plan, the Company may grant restricted stock units to employees, directors and officers. The restricted stock units granted generally vest equally over periods ranging from one to three years. The fair value of restricted stock units is determined based on the closing market price of the Company’s Common Stock on the date of grant. Compensation expense related to the restricted stock units is recognized using a straight-line attribution method over the vesting period.

	Number of Shares			Weighted- Average Grant Date Fair Value
Unvested at December 31, 2022		7,691		$	230.75
Vested		(2,406	)		230.80
Forfeited		(3,100	)		230.80
Unvested at September 30, 2023		2,185		$	230.80

As of September 30, 2023, total unrecognized compensation expense related to unvested restricted stock units was $0.7 million, which is expected to be recognized over a weighted average period of 2.10 years.

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 2,500 shares of Common Stock for issuance under the ESPP. On September 30, 2023, 2,500 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 three and nine months ended September 30, 2023.

Employee Benefit Plan

The Company maintains an employee’s savings and retirement plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). All full-time U.S. employees become eligible to participate in the 401(k) Plan. The Company’s contribution to the 401(k) Plan is discretionary. During the three and nine months ended September 30, 2023, the Company did not contribute to the 401(k) Plan.

Supplemental Consolidated Balance Sheet Information (Tables)

9 Months Ended

Sep. 30, 2023

Supplemental Consolidated Balance Sheet Information [Abstract]

Schedule of Accounts Receivable

Accounts receivable consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023			December 31, 2022
Accounts receivable, gross	$	3,722		$	5,675
Less allowance for credit losses		(2,535	)		(4,605	)
Accounts receivable, net	$	1,187		$	1,070

Schedule of Allowance for Credit Losses Accounts

The changes in the allowance for credit losses accounts consisted of the following:

(In thousands)	Nine months ended September 30, 2023			Year ended December 31, 2022
Allowance for credit losses - beginning of period	$	4,605		$	1,415
(Recovery of) allowance for credit losses		(983	)		4,928
Write-offs of uncollectible accounts		(1,087	)		(1,510	)
Other adjustments		—			(228	)
Allowance for credit losses - end of period	$	2,535		$	4,605

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023		December 31, 2022
Legal settlement receivables	$	1,206	$	—
Prepaid insurance		669		219
Prepaid expenses, other		124		230
Prepaid software		44		129
Prepaid materials		33		45
Deferred issuance costs, net		—		463
Other receivables, other		60		424
Total prepaid expenses and other current assets	$	2,136	$	1,510

Schedule of Property and Equipment

Property and equipment, net consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023			December 31, 2022
Leased equipment		4,465			602
Leasehold improvements	$	1,123		$	1,111
Machinery and equipment		904			1,049
Software		606			606
Computer and office equipment		588			627
Research and development laboratory equipment		183			260
Furniture and fixtures		116			504
Trade show assets		79			78
Vehicles		73			136
Total property and equipment, gross		8,137			4,973
Accumulated depreciation		(2,695	)		(2,372	)
Construction in progress		2,943			7,443
Total property and equipment, net	$	8,385		$	10,044

Schedule of Other Non-Current Assets

Other non-current assets consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023		December 31, 2022
Security deposits	$	141	$	153
Long-term deferred commissions expense		—		173
Total other non-current assets	$	141	$	326

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023		December 31, 2022
Sales tax payable (1)	$	6,019	$	5,950
Accrued acquisition liabilities (2)		2,180		3,502
Accrued construction costs		1,540		2,669
Accrued interest expense		1,041		240
Compensation related fees		944		2,285
Accrued warranty expenses		585		553
Accrued professional fees		443		313
Accrued inventory purchases		63		569
Accrued consulting fees		9		20
Financing lease liabilities		—		152
Other current liabilities		—		127
Total accrued expenses and other current liabilities	$	12,824	$	16,380

(1)

(2)	Accrued acquisition liabilities includes both the contingent consideration and the value of held back Common Stock associated with the 2022 acquisition of Lab Society and the 2021 acquisitions of Precision, Cascade and PurePressure.

Schedule of Accrued Liability for Estimated Future Warranty Cost

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

(In thousands)	September 30, 2023			December 31, 2022
Warranty accrual – beginning of period	$	553		$	398
Liabilities accrued for warranties issued during the period		230			264
Warranty accruals paid during the during		(198	)		(109	)
Warranty accrual – end of period		585			553

Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt [Abstract]

Schedule of Debt

The Company’s debt consisted of:

(In thousands)	September 30, 2023			December 31, 2022
Note payable – Exchange Note	$	18,509		$	31,975
PPP Loan		518			656
Navitas loan		10			23
Related party debt		500			—
Other notes payable (1)		487			—
Total debt		20,024			32,654
Unamortized debt premium (discount)		614			(3,415	)
Total debt, net of debt discount		20,638			29,239
Less: current portion, net of current unamortized debt discount		(1,640	)		(28,832	)
Long-term debt, net of current	$	18,998		$	407

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

Schedule of Short-Term and Long-Term Portion

The following table summarizes the short-term and long-term portions of the Exchange Note as of September 30, 2023:

(In thousands)	Short-Term		Long-Term		Notes payable, net
Principal	$	—	$	18,509	$	18,509
Unamortized premium		316		298		614
Net carrying amount	$	316	$	18,807	$	19,123

Schedule of Future Minimum Payments

As of September 30, 2023, future minimum payments were as follows:

Years ending December 31 (In thousands),
Remaining 2023	$	748
2024		648
2025		18,628
Total future payments	$	20,024

Schedule of PPP Loan Balances by Current and Non-Current

The breakdown of PPP Loan balances by current and non-current as of September 30, 2023 and December 31, 2022 were as follows:

(In thousands)	Balance Sheet Location	September 30, 2023		December 31, 2022
PPP Loan, current	Long-term debt, current	$	328	$	255
PPP Loan, non-current	Long-term debt		189		401
Total PPP Loan outstanding		$	518	$	656

Goodwill and Intangible Assets, Net (Details) - Schedule of Intangible Assets, Net $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Schedule of Intangible Assets, Net [Line Items]
Intangible Assets, Gross beginning	$ 14,952
Intangible Assets, Gross Additions and Retirements, net	2,462
Intangible Assets, Gross ending	17,414
Accumulated Amortization and Impairment, beginning	(880)
Accumulated Amortization and Impairment, Expense and Retirements, net	(16,534)
Accumulated Amortization and Impairment, ending	(17,414)
Intangible Assets, Net ending
Intangible Assets, Net beginning	14,072
Trade names [Member]
Schedule of Intangible Assets, Net [Line Items]
Intangible Assets, Gross beginning	2,418
Intangible Assets, Gross Additions and Retirements, net	317
Intangible Assets, Gross ending	2,735
Accumulated Amortization and Impairment, beginning	(227)
Accumulated Amortization and Impairment, Expense and Retirements, net	(2,508)
Accumulated Amortization and Impairment, ending	(2,735)
Intangible Assets, Net ending
Intangible Assets, Net beginning	2,191
Customer relationships [Member]
Schedule of Intangible Assets, Net [Line Items]
Intangible Assets, Gross beginning	6,176
Intangible Assets, Gross Additions and Retirements, net	713
Intangible Assets, Gross ending	6,889
Accumulated Amortization and Impairment, beginning	(302)
Accumulated Amortization and Impairment, Expense and Retirements, net	(6,587)
Accumulated Amortization and Impairment, ending	(6,889)
Intangible Assets, Net ending
Intangible Assets, Net beginning	5,874
Acquired developed technology [Member]
Schedule of Intangible Assets, Net [Line Items]
Intangible Assets, Gross beginning	4,911
Intangible Assets, Gross Additions and Retirements, net	1,432
Intangible Assets, Gross ending	6,343
Accumulated Amortization and Impairment, beginning	(191)
Accumulated Amortization and Impairment, Expense and Retirements, net	(6,152)
Accumulated Amortization and Impairment, ending	(6,343)
Intangible Assets, Net ending
Intangible Assets, Net beginning	4,720
Non-compete agreements [Member]
Schedule of Intangible Assets, Net [Line Items]
Intangible Assets, Gross beginning	1,202
Intangible Assets, Gross Additions and Retirements, net
Intangible Assets, Gross ending	1,202
Accumulated Amortization and Impairment, beginning	(60)
Accumulated Amortization and Impairment, Expense and Retirements, net	(1,142)
Accumulated Amortization and Impairment, ending	(1,202)
Intangible Assets, Net ending
Intangible Assets, Net beginning	1,142
Capitalized website costs [Member]
Schedule of Intangible Assets, Net [Line Items]
Intangible Assets, Gross beginning	245
Intangible Assets, Gross Additions and Retirements, net
Intangible Assets, Gross ending	245
Accumulated Amortization and Impairment, beginning	(100)
Accumulated Amortization and Impairment, Expense and Retirements, net	(145)
Accumulated Amortization and Impairment, ending	(245)
Intangible Assets, Net ending
Intangible Assets, Net beginning	$ 145

Stock-Based Compensation and Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2023

Stock-Based Compensation and Employee Benefit Plans [Abstract]

Schedule of Option Activity under the Company's Stock Option Plans

The following table presents option activity under the Company’s stock option plans for the three and six months ended September 30, 2023:

(In thousands, except share and per share data)	Number of Options			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at January 1, 2023		13,439		$	1,518.05	$	—
Exercised		(104	)		6.67
Forfeited		(83	)		—
Expired		(54	)		1,213.74
Options outstanding at September 30, 2023		13,198		$	1,540.76	$	—

Options vested and exercisable as of September 30, 2023		11,379		$	1,467.77
Options vested and expected to vest as of September 30, 2023		12,124		$	1,498.89

Schedule of Options Vested and Exercisable

The following table summarizes information about options vested and exercisable at September 30, 2023:

		Options Vested and Exercisable
Price ($)		Number of Options		Weighted-Average Remaining Contractual Life (Years)		Weighted-Average Exercise Price
$	456.00		3,758		5.38	$	456.00
$	972.00		3,526		5.47	$	972.00
$	1,536.00		25		9.59	$	1,536.00
$	1,840.00		146		12.39	$	1,840.00
$	2,768.00		3,924		10.36	$	2,768.00

The following table summarizes information about options expected to vest after September 30, 2023:

		Options Vested and Expected to Vest
Price ($)		Number of Options		Weighted-Average Remaining Contractual Life (Years)		Weighted-Average Exercise Price
	456.00		3,758		5.38	$	456.00
	972.00		3,566		5.47	$	972.00
	1,536.00		50		9.59	$	1,536.00
	1,840.00		250		12.39	$	1,840.00
	2,768.00		4,500		10.36	$	2,768.00

Schedule of Restricted Stock Unit Activity

Compensation expense related to the restricted stock units is recognized using a straight-line attribution method over the vesting period.

	Number of Shares			Weighted- Average Grant Date Fair Value
Unvested at December 31, 2022		7,691		$	230.75
Vested		(2,406	)		230.80
Forfeited		(3,100	)		230.80
Unvested at September 30, 2023		2,185		$	230.80

Goodwill and Intangible Assets, Net (Details) $ in Millions	9 Months Ended
Goodwill and Intangible Assets, Net (Details) $ in Millions	Sep. 30, 2023 USD ($)
Goodwill and Intangible Assets, Net [Abstract]
Impairment charges	$ 69.9
Goodwill	54.7
Intangible assets	$ 15.2

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Net Loss Per Share [Abstract]

Schedule of Basic and Diluted Net Loss Per Share

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)	2023			2022			2023			2022
Numerator:
Net loss attributable to Agrify Corporation		(2,092	)		(57,413	)		(19,224	)		(130,235	)
Denominator:
Weighted-average common shares outstanding –		1,649,741			133,526			1,426,016			129,832
Net loss per share attributable to Common Stockholders – basic and diluted	$	(1.27	)	$	(429.98	)	$	(13.48	)	$	(1,003.10	)

Schedule of Anti-Dilutive Shares

The Company excluded the following potential Common Stock 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:

	Nine months ended September 30, 2023		Nine months ended September 30, 2022
Shares subject to outstanding stock options		11,379		14,286
Shares subject to unvested restricted stock units		2,185		8,965
Shares subject to outstanding warrants		1,495,001		121,539
		1,508,565		144,790

Fair Value Measures (Details) - Schedule of Composition Marketable Securities - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current marketable securities:
Total current marketable securities	$ 4	$ 460
Money market funds [Member]
Current marketable securities:
Total current marketable securities	4
Corporate bonds [Member]
Current marketable securities:
Total current marketable securities		427
Mutual funds [Member]
Current marketable securities:
Total current marketable securities		$ 33

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 15 — Commitments and Contingencies

Legal Matters

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 the 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 due to the current litigation and the uncertainty of the customer’s ability to repay the 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.

If the Company is unable to realize revenue from its TTK Solution offerings on a timely basis or at all, or if it incurs an additional loss as a result of the Bud & Mary’s claim, the Company’s business and financial performance will be adversely affected. On November 14, 2022, the Company filed its answers and affirmative defenses to the Bud & Mary’s complaint and counterclaims. The Company is seeking, among other relief, monetary damages in connection with the breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and enforcement of the guarantees. Bud & Mary’s is permitted to file an amended complaint during October 2023, and Agrify will be permitted to make responsive filings, which may include an answer and counterclaim.

Bowdoin Construction Corp. Litigation

On February 22, 2023, Bowdoin Construction Corp. (“Bowdoin”) filed a complaint (the “Bowdoin Complaint”) in the Superior Court of Massachusetts in Norfolk County naming the Company, Bud & Mary’s and certain related parties as defendants, captioned Bowdoin Construction Corp. v. Agrify Corporation, Bud & Mary’s Cultivation, Inc. and BMLC2, LLC, case no. 2382CV00173. The Bowdoin Complaint relates to a construction contract between Bowdoin and the Company relating to the property that is the subject of the Bud & Mary’s Complaint, and alleges breach of contract by Bud & Mary’s and by the Company due to nonpayment of approximately $6.3 million due under the contract and related indemnification claims and mechanics’ liens. The Company is entitled to indemnification by Bud & Mary’s and intends to vigorously defend this claim.

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. Since February 2021, the Company increased the purchase order with Mack to approximately $26.5 million towards production of VFUs during 2021 and 2022. The Company believed the supply agreement with Mack would 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 believed this approach would result in both parties making a more informed decision with respect to the pricing and other terms of the supply agreement with Mack.

On October 11, 2022, the Company received a $9.4 million invoice from Mack for inventory purchased on the Company’s behalf to build VFUs. As part of the terms of the contract manufacturing agreement, Mack had the contractual right to bill the Company for any inventory that had aged greater than nine months. Due to the slowdown in the demand for the VFUs and the lack of a demand forecast that the Company could provide to the vendor, Mack exercised the right to invoice the Company for the slow-moving inventory. As of December 31, 2022, the Company owed Mack $8.4 million for purchased inventory on behalf of the Company to produce VFUs, which is included in accounts payable in the consolidated balance sheet.

On March 2, 2023, Mack filed an arbitration action seeking the amounts owed to Mack for purchased inventory. On October 27, 2023, and effective as of October 18, 2023, Mack and the Company entered into a Modification and Settlement Agreement with respect to the dispute. See Note 17 – Subsequent Events.

TRC Electronics Litigation

The Company was named as a defendant in a complaint filed by TRC Electronics, Inc. (“TRC”) on April 13, 2023 in the United States District Court for the Eastern District of Pennsylvania. In the Complaint, TRC asserts two causes of action against the Company: (1) breach of contract, and (2) promissory estoppel. TRC’s claims are based on allegations that the Company failed to make payments due under three purchase orders for commercial electronics parts. TRC seeks damages in the amount of $565,210, plus attorneys’ fees, costs, and post-judgment interest. The Company has filed an answer denying liability on TRC’s claims and is proceeding with discovery.

Sinclair Scientific Litigation

On June 15, 2023, the Company and its wholly-owned subsidiary Precision Extraction Newco, LLC (“Precision”), filed an Amended Verified Complaint in the Court of Chancery of the State of Delaware against Sinclair Scientific, LLC (“Sinclair”) and certain individual defendants (the “Delaware Action”). The claims filed in the Delaware Action concern various breaches of the Plan of Merger and Equity Purchase Agreement dated September 29, 2021, by and between the Company, Sinclair, Mass2Media, LLC, and certain of their members (the “Merger Agreement”). In response to the Delaware Action, certain of the defendants filed counterclaims for breach of contract and declaratory judgment against the Company and Precision alleging breach of the Merger Agreement. The Company and Precision filed an answer to the counterclaims denying all liability on the claims and discovery in the Delaware Action has recently commenced.

Other Litigation

In September 2023, the Company settled a legal dispute with a specific customer which resulted in the recognition of a gain of approximately $0.9 million, of which $0.3 million was paid in October 2023, with the remaining approximate $0.6 million to be paid in equal monthly installments, beginning in January, 2024. This gain was recognized as part of Other expense, net per the Condensed Consolidated Statement of Operations for the quarter ended September 30, 2023, with the approximate $0.9 million receivable balance recognized as part of Prepaid expenses and other current assets, per the Condensed Consolidated Balance Sheet, as of September 30, 2023. The settlement also resulted in the return of equipment to the Company, in October 2023.

In addition to the above, the Company entered into several additional vendor settlement agreements during the quarter ended September 30, 2023, which resulted in an aggregate gain being recognized for the quarter ended September 30, 2023, and a corresponding reduction in accounts payable owing by the Company, as of September 30, 2023, of approximately $1 million.

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 would 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. Since February 2021, the Company increased the purchase order with Mack to approximately $26.5 million towards production of VFUs during 2021 and 2022. The Company believed the supply agreement with Mack would 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 believed this approach would result in both parties making a more informed decision with respect to the pricing and other terms of the supply agreement with Mack.

On October 11, 2022, the Company received a $9.4 million invoice from Mack for inventory purchased on the Company’s behalf to build VFUs. As part of the terms of the contract manufacturing agreement, Mack had the contractual right to bill the Company for any inventory that had aged greater than nine months. Due to the slowdown in the demand for the VFUs and the lack of a demand forecast that the Company could provide to the vendor, Mack exercised the right to invoice the Company for the slow-moving inventory. As of June 30, 2023, the Company owed Mack $8.4 million for purchased inventory on behalf of the Company to produce VFUs, which is included in accounts payable in the consolidated balance sheet. On October 27, 2023, and effective as of October 18, 2023, Mack and the Company entered into a Modification and Settlement Agreement with respect to the dispute. See Note 17 – Subsequent Events.

Distribution Agreements with Related Party – Bluezone Products, Inc.

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 $0.5 million and $0.6 million 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 $0.3 million of the committed $0.7 million second-year purchases through December 31, 2021. Bluezone is a related party to the Company.

Committed Purchase Agreement with Related Party – 4D Bios, Inc.

On September 18, 2021, the Company entered into an amended purchase agreement with 4D Bios, Inc. (“4D”) to secure purchases of horticultural equipment. The original agreement required minimum purchases of between $577 dollars and $607 dollars per unit of 4D products until December 31, 2020. The amended agreement requires minimum purchases of $582 dollars per unit with a final payment of approximately $0.9 million paid to 4D. 4D is a related party to the Company. The Company settled all outstanding commitments, leaving no open committed purchases as of December 31, 2021.

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. Stuart Wilcox, the Company’s former Chief Operating Officer, is the Chairman of Ora.

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 8 – Debt, included elsewhere in the notes to the consolidated financial statements for details of the Company’s future minimum debt payments. Refer to Note 9 – 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 13 – Income Taxes, included elsewhere in the notes to the consolidated financial statements for information regarding income tax contingencies.

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

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Net loss per share attributable to Common Stockholders – diluted

$ (1.27)

$ (429.98)

$ (13.48)

$ (1,003.10)

Weighted average common shares outstanding - diluted

^[1]

1,649,741

133,526

1,426,016

129,832

Related Party

Revenue from related parties

$ 0

$ 46

$ 1,763

[1]

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: 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 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Inventory (Details) - Schedule of Changes in Company’s Inventory Reserve - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Schedule of Changes in Company’s Inventory Reserve [Abstract]
Inventory reserves – beginning of period	$ 32,759	$ 942
(Decrease) increase in inventory reserves	(2,914)	31,817
Inventory reserves – end of period	$ 29,845	$ 32,759

Goodwill and Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets, Net [Abstract]

Schedule of Changes in Goodwill

Changes in goodwill consisted of the following:

(In thousands)	Year ended December 31, 2022
Goodwill - beginning of period	$	50,090
Goodwill acquired during period		4,368
Goodwill purchase accounting adjustment		289
Goodwill impairment loss		(54,747	)
Goodwill - end of period	$	—

Schedule of Intangible Assets, Net

Intangible assets, net as of December 31, 2022 were as follows:

	Intangible Assets, Gross						Accumulated Amortization and Impairment									Intangible Assets, Net
(In thousands)	January 1, 2022		Additions and Retirements, net		December 31, 2022		January 1, 2022			Expense and Retirements, net			December 31, 2022			January 1, 2022		December 31, 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		1,202		—		1,202		(60	)		(1,142	)		(1,202	)		1,142		—
Capitalized website costs		245		—		245		(100	)		(145	)		(245	)		145		—
Total	$	14,952	$	2,462	$	17,414	$	(880	)	$	(16,534	)	$	(17,414	)	$	14,072	$	—

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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+ Details

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2023	Dec. 21, 2023
Document Information Line Items
Entity Registrant Name	AGRIFY CORPORATION
Trading Symbol	AGFY
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		1,701,243
Amendment Flag	false
Entity Central Index Key	0001800637
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Ex Transition Period	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-39946
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	30-0943453
Entity Address, Address Line One	2468 Industrial Row Dr.
Entity Address, City or Town	Troy
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48084
City Area Code	(855)
Local Phone Number	420-0020
Title of 12(b) Security	Common Stock, par value $0.001 per share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	No

Debt (Details) - Schedule of Future Minimum Payments $ in Thousands	Sep. 30, 2023 USD ($)
Schedule of Future Minimum Payments [Abstract]
Remaining 2023	$ 748
2024	648
2025	18,628
Total future payments	$ 20,024

Stock Warrants (Tables)

9 Months Ended

Sep. 30, 2023

Stock Warrants [Abstract]

Schedule of Company’s Warrant Activity

The following tables present all warrant activity of the Company for the nine months ended September 30, 2023 and 2022:

	Number of Warrants			Weighted- Average Exercise Price
Warrants outstanding at December 31, 2022		1,530,001		$	38.07
Exercised		(35,000	)		—
Warrants outstanding at September 30, 2023		1,495,001		$	38.07

	Number of Warrants			Weighted- Average Exercise Price
Warrants outstanding at December 31, 2021		1,358		$	4.00
Granted		128,476			427.00
Exercised		(8,295	)		0.20
Warrants outstanding at September 30, 2022		121,539		$	451.40

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of Accrued Expenses and Other Current Liabilities - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Dec. 31, 2021

Schedule of Accrued Expenses and Other Current Liabilities [Abstract]

Sales tax payable

^[1]

$ 6,019

$ 5,950

Accrued acquisition liabilities

^[2]

2,180

3,502

Accrued construction costs

1,540

2,669

Accrued interest expense

1,041

240

Compensation related fees

944

2,285

Accrued warranty expenses

585

553

$ 398

Accrued professional fees

443

313

Accrued inventory purchases

569

Accrued consulting fees

Financing lease liabilities

152

Other current liabilities

127

Total accrued expenses and other current liabilities

$ 12,824

$ 16,380

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

Commitments and Contingencies (Details) - USD ($)		1 Months Ended			9 Months Ended
Commitments and Contingencies (Details) - USD ($)	Feb. 22, 2023	Jun. 30, 2022	Feb. 28, 2022	Feb. 28, 2021	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Oct. 11, 2022	Sep. 30, 2022	Dec. 31, 2021	Sep. 18, 2021	Dec. 31, 2020	Sep. 07, 2019
Commitments and Contingencies [Line Items]
Reserve outstanding									$ 14,700,000
Contingent loss									$ 14,700,000
Due to nonpayment	$ 6,300,000
Purchase order mack amount			$ 26,500,000	$ 5,200,000
Inventory purchased								$ 9,400,000
Seeks damages					$ 565,210
Settled legal customer recognition of a gain					900,000
Paid amount					300,000
Paid in equal monthly installments					600,000
Prepaid expenses and other current assets					900,000
Accounts payable					$ 1,000,000
Initial production				5,200,000
Minimum purchases amount first year										$ 300,000
Minimum purchases amount second year										$ 700,000
Agreement minimum purchases											$ 582,000
Final payment paid											$ 900,000
Ora pharm purchased		$ 1,600,000
Vertical Farming Units [Member]
Commitments and Contingencies [Line Items]
Inventory purchased						$ 8,400,000	$ 8,400,000	$ 9,400,000
Maximum [Member]
Commitments and Contingencies [Line Items]
Agreement minimum purchases												$ 577,000
Minimum [Member]
Commitments and Contingencies [Line Items]
Agreement minimum purchases												$ 607,000
Mack Molding Co [Member]
Commitments and Contingencies [Line Items]
Purchase order mack amount				26,500,000
Supply Agreement with Mack Molding Co [Member]
Commitments and Contingencies [Line Items]
Purchase order mack amount			$ 26,500,000	$ 26,500,000
Bluezone Products, Inc. [Member]
Commitments and Contingencies [Line Items]
Minimum purchases amount first year													$ 500,000
Minimum purchases amount second year													$ 600,000

Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of Options Vested and Exercisable	9 Months Ended
	Sep. 30, 2023 $ / shares shares
456.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	3,758
Weighted-Average Remaining Contractual Life (Years)	5 years 4 months 17 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 456
972.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	3,526
Weighted-Average Remaining Contractual Life (Years)	5 years 5 months 19 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 972
1,536.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	25
Weighted-Average Remaining Contractual Life (Years)	9 years 7 months 2 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 1,536
1,840.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	146
Weighted-Average Remaining Contractual Life (Years)	12 years 4 months 20 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 1,840
2,768.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	3,924
Weighted-Average Remaining Contractual Life (Years)	10 years 4 months 9 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 2,768
456.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	3,758
Weighted-Average Remaining Contractual Life (Years)	5 years 4 months 17 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 456
972.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	3,566
Weighted-Average Remaining Contractual Life (Years)	5 years 5 months 19 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 972
1,536.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	50
Weighted-Average Remaining Contractual Life (Years)	9 years 7 months 2 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 1,536
1,840.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	250
Weighted-Average Remaining Contractual Life (Years)	12 years 4 months 20 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 1,840
2,768.00 [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Number of Options \| shares	4,500
Weighted-Average Remaining Contractual Life (Years)	10 years 4 months 9 days
Weighted-Average Exercise Price (in Dollars per share) \| $ / shares	$ 2,768

Related Parties (Details) - Schedule of Net Purchasing (Sales) Activity - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Bluezone [Member]
Related Parties (Details) - Schedule of Net Purchasing (Sales) Activity [Line Items]
Net purchase			$ 4	$ 5
Cannae Policy Group [Member]
Related Parties (Details) - Schedule of Net Purchasing (Sales) Activity [Line Items]
Net purchase				25
Topline Performance Group [Member]
Related Parties (Details) - Schedule of Net Purchasing (Sales) Activity [Line Items]
Net purchase		1	(1)	71
NEIA [Member]
Related Parties (Details) - Schedule of Net Purchasing (Sales) Activity [Line Items]
Net purchase			(43)	(1,763)
Greenstone Holdings [Member]
Related Parties (Details) - Schedule of Net Purchasing (Sales) Activity [Line Items]
Net purchase		212	(2)	392
Valiant Americas, LLC [Member]
Related Parties (Details) - Schedule of Net Purchasing (Sales) Activity [Line Items]
Net purchase		$ 1,315		$ 11,120

Revenue and Deferred Revenue (Details) - Schedule of Current Deferred Revenue - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Schedule of Current Deferred Revenue [Abstract]
Deferred revenue – beginning of period	$ 4,112	$ 3,772
Additions	3,685	13,392
Recognized	(3,718)	(13,052)
Deferred revenue – end of period	$ 4,079	$ 4,112

Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of Option Activity under the Company's Stock Option Plans	9 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares
Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of Option Activity under the Company's Stock Option Plans [Line Items]
Number of Options, Options outstanding beginning \| shares	13,439
Weighted- Average Exercise Price, Options outstanding beginning \| $ / shares	$ 1,518.05
Aggregate Intrinsic Value, Options outstanding beginning \| $
Number of Options, Exercised \| shares	(104)
Weighted- Average Exercise Price, Exercised \| $ / shares	$ 6.67
Number of Options, Forfeited \| shares	(83)
Weighted- Average Exercise Price, Forfeited \| $ / shares
Number of Options, Expired \| shares	(54)
Weighted- Average Exercise Price, Expired \| $ / shares	$ 1,213.74
Number of Options, Options outstanding ending \| shares	13,198
Weighted- Average Exercise Price, Options outstanding ending \| $ / shares	$ 1,540.76
Aggregate Intrinsic Value, Options outstanding ending \| $
Equity Option [Member]
Stock-Based Compensation and Employee Benefit Plans (Details) - Schedule of Option Activity under the Company's Stock Option Plans [Line Items]
Number of Options, Options vested and exercisable \| shares	11,379
Weighted- Average Exercise Price, Options vested and exercisable \| $ / shares	$ 1,467.77
Number of Options, Options vested and expected \| shares	12,124
Weighted- Average Exercise Price, Options vested and expected \| $ / shares	$ 1,498.89

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss attributable to Agrify Corporation	$ (19,224)	$ (130,235)
Adjustments to reconcile net loss attributable to Agrify Corporation to net cash used in operating activities:
Depreciation and amortization	1,469	2,602
Amortization of premium on investment securities		606
Amortization of debt (premium) discount	(6)	4,195
Interest on investment securities		(700)
Amortization of issuance costs	24	508
Deferred income taxes		(262)
Prepaid and refundable taxes		(10)
Stock based compensation expense	2,136	3,538
Non-cash interest income		(1,581)
Change in fair value of warrant liabilities	(3,599)	(47,234)
Loss on extinguishment of notes payable, net	4,631	38,985
Impairment of goodwill and intangible assets		69,904
(Recovery of) provision for credit losses	(14,818)	23,708
(Recovery of) provision for slow-moving inventory	(2,914)	967
(Gain) loss on disposal of fixed assets	(63)	6
Change in fair value of contingent consideration		(1,509)
(Income) loss attributable to non-controlling interests	(2)	5
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	866	1,217
Inventory	6,619	(20,129)
Prepaid expenses and other current assets	630	969
Right of use assets, net	66	55
Other non-current assets	170	(10)
Accounts payable	1,505	303
Accrued expenses and other current liabilities	(3,406)	(8,165)
Operating lease liabilities	9
Deferred revenue	(33)	4,247
Net cash and cash equivalents used in operating activities	(25,940)	(58,020)
Cash flows from investing activities:
Purchases of property and equipment	(59)	(8,002)
Proceeds from disposal of property and equipment	87
Purchase of securities		(283,271)
Proceeds from sale of securities	10,456	317,593
Issuance of loans receivable	(591)	(26,942)
Proceeds from repayment of loan receivable	15,342
Cash paid for business combination, net of cash acquired		(3,513)
Net cash and cash equivalents provided by (used in) investing activities	25,235	(4,135)
Cash flows from financing activities:
Proceeds from issuance of debt and warrants in private placement, net		61,891
Proceeds from issuance of Common Stock and warrants in private placement, net of fees		25,797
Proceeds from “at the market” Program, net	1,545
Proceeds from Employee Stock Purchase Plan Shares	25
Proceeds from exercise of options		20
Proceeds from exercise of warrants		3
Proceeds from issuance of related party note	500
Repayment of debt in private placement	(10,307)	(33,170)
Repayments of notes payable, other	(71)	(48)
Payments on other financing loans	(5)	(248)
Payments on insurance financing loans	(1,205)	(1,714)
Payments of financing leases	(80)	(241)
Impact of reverse stock split		2
Net cash and cash equivalents (used in) provided by financing activities	(9,598)	52,292
Net decrease in cash and cash equivalents	(10,303)	(9,863)
Cash and cash equivalents at the beginning of period	10,457	12,014
Cash and cash equivalents at the end of period	154	2,151
Cash, cash equivalents, and restricted cash at end of period
Cash and cash equivalents	154	2,151
Restricted cash		10,000
Total cash, cash equivalents, and restricted cash at the end of period	154	12,151
Supplemental disclosures of non-cash flow information
Initial fair value of warrants		50,705
Financing of prepaid insurance	1,694	1,928
Transfer of property and equipment to inventory	33
Conversion of convertible notes	$ 3,306

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of Allowance for Credit Losses Accounts - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Schedule of Allowance for Credit Losses Accounts [Abstract]
Allowance for credit losses - beginning of period	$ 4,605	$ 1,415
(Recovery of) allowance for credit losses	(983)	4,928
Write-offs of uncollectible accounts	(1,087)	(1,510)
Other adjustments		(228)
Allowance for credit losses - end of period	$ 2,535	$ 4,605

Related Parties

9 Months Ended

Sep. 30, 2023

Related Parties [Abstract]

Related Parties

Note 16 — 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)	2023		2022		2023			2022
Bluezone	$	—	$	—	$	4		$	5
Cannae Policy Group		—		—		—			25
Topline Performance Group		—		1		(1	)		71
NEIA		—		—		(43	)		(1,763	)
Greenstone Holdings		—		212		(2	)		392
Valiant Americas, LLC		—		1,315		—			11,120

The following table summarizes net related party (payable) receivable as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023			December 31, 2022
Bluezone	$	(4	)	$	—
Valiant Americas, LLC		1			(1	)
Topline Performance Group		—			1

On July 12, 2023, the Company issued an unsecured promissory note in favor of GIC Acquisition, LLC, an entity that is owned and managed by the Company’s Chairman and Chief Executive Officer. Refer to footnote 8 for further disclosure related to this Related Party Note.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Stock Warrants (Details) - Schedule of Company’s Warrant Activity - $ / shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Warrant [Member]
Class of Warrant or Right [Line Items]
Number of Warrants, outstanding beginning	1,530,001	1,358
Number of Warrants, Granted		128,476
Number of Warrants, Exercised	(35,000)	(8,295)
Number of Warrants, outstanding Ending	1,495,001	121,539
Weighted Average Exercise Price [Member]
Class of Warrant or Right [Line Items]
Weighted average exercise price, outstanding beginning	$ 38.07	$ 4
Weighted Average Exercise Price, Granted		427
Weighted Average Exercise Price, Exercised		0.2
Weighted Average Exercise Price, outstanding ending	$ 38.07	$ 451.4

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total Stockholders’ Equity attributable to Agrify	Non- Controlling Interests	Total
Balance at Dec. 31, 2021		$ 196,034	$ (58,975)	$ 137,059	$ 365	$ 137,424
Balance (in Shares) at Dec. 31, 2021	111,035
Stock-based compensation		1,893		1,893		1,893
Issuance of Common Stock and warrants in private placement		14,800		14,800		14,800
Issuance of Common Stock and warrants in private placement (in Shares)	12,252
Acquisition of Lab Society		1,903		1,903		1,903
Acquisition of Lab Society (in Shares)	1,490
Exercise of options		20		20		20
Exercise of options (in Shares)	42
Exercise of warrants		2		2		2
Exercise of warrants (in Shares)	8,138
Net income (loss)			(72,824)	(72,824)	4	(72,820)
Balance at Jun. 30, 2022		214,652	(131,799)	82,853	369	83,222
Balance (in Shares) at Jun. 30, 2022	132,957
Balance at Dec. 31, 2021		196,034	(58,975)	137,059	365	137,424
Balance (in Shares) at Dec. 31, 2021	111,035
Balance at Sep. 30, 2022		218,523	(189,212)	29,311	370	29,681
Balance (in Shares) at Sep. 30, 2022	134,550
Balance at Jun. 30, 2022		214,652	(131,799)	82,853	369	83,222
Balance (in Shares) at Jun. 30, 2022	132,957
Stock-based compensation		1,645		1,645		1,645
Issuance of Common Stock in connection with acquisition		2,220		2,220		2,220
Issuance of Common Stock in connection with acquisition (in Shares)	435
Reclass of warrant liability		4		4		4
Issuance of restricted stock
Issuance of restricted stock (in Shares)	1,000
Vesting of restricted stock units
Exercise of warrants		2		2		2
Exercise of warrants (in Shares)	158
Net income (loss)			(57,413)	(57,413)	1	(57,412)
Balance at Sep. 30, 2022		218,523	(189,212)	29,311	370	29,681
Balance (in Shares) at Sep. 30, 2022	134,550
Balance at Dec. 31, 2022	$ 1	237,875	(247,148)	(9,272)	231	(9,041)
Balance (in Shares) at Dec. 31, 2022	1,038,298
Stock-based compensation		1,611		1,611		1,611
Issuance of restricted stock
Issuance of Common Stock through an “at the market” offering, net of fees		1,545		1,545		1,545
Issuance of Common Stock through an “at the market” offering, net of fees (in Shares)	323,082
Issuance of held-back shares to Lab Society
Issuance of held-back shares to Lab Society (in Shares)	499
Issuance of Common Stock to Pure Pressure
Issuance of Common Stock to Pure Pressure (in Shares)	366
Vesting of restricted stock units
Vesting of restricted stock units (in Shares)	17
Exercise of prefunded warrants in private placement
Exercise of prefunded warrants in private placement (in Shares)	35,000
Conversion of Exchange Note		2,146		2,146		2,146
Conversion of Exchange Note (in Shares)	69,567
Conversion of Convertible Note	$ 1	1,171		1,172		1,172
Conversion of Convertible Note (in Shares)	153,617
Proceeds from Employee Stock Purchase Plan Shares		25		25		25
Proceeds from Employee Stock Purchase Plan Shares (in Shares)	2,500
Net income (loss)			(17,134)	(17,134)	2	(17,132)
Balance at Jun. 30, 2023	$ 2	244,373	(264,282)	(19,907)	233	(19,674)
Balance (in Shares) at Jun. 30, 2023	1,622,946
Balance at Dec. 31, 2022	$ 1	237,875	(247,148)	(9,272)	231	$ (9,041)
Balance (in Shares) at Dec. 31, 2022	1,038,298
Exercise of options (in Shares)						104
Balance at Sep. 30, 2023	$ 2	244,898	(266,374)	(21,474)	233	$ (21,241)
Balance (in Shares) at Sep. 30, 2023	1,651,281
Balance at Jun. 30, 2023	$ 2	244,373	(264,282)	(19,907)	233	(19,674)
Balance (in Shares) at Jun. 30, 2023	1,622,946
Stock-based compensation		525		525		525
Reverse stock split fractional share settlement
Reverse stock split fractional share settlement (in Shares)	28,335
Net income (loss)			(2,092)	(2,092)		(2,092)
Balance at Sep. 30, 2023	$ 2	$ 244,898	$ (266,374)	$ (21,474)	$ 233	$ (21,241)
Balance (in Shares) at Sep. 30, 2023	1,651,281

Income Taxes (Details) - USD ($)	9 Months Ended
Income Taxes (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Income Taxes [Abstract]
Effective income tax rate	0.00%	0.20%
Provision for income taxes (in Dollars)	$ 0	$ 200,000
Statutory tax rate	21.00%	21.00%

Overview, Basis of Presentation and Significant Accounting Policies (Details) - USD ($)
$ / shares in Units, $ in Thousands

1 Months Ended

3 Months Ended

9 Months Ended

12 Months Ended

Apr. 01, 2023

Dec. 31, 2022

Aug. 07, 2022

Dec. 16, 2022

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Mar. 01, 2023

Jan. 19, 2023

Oct. 28, 2022

Oct. 18, 2022

Oct. 04, 2022

Aug. 18, 2022

Jul. 11, 2022

Jun. 23, 2022

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Proceeds from offering cost

$ 8,700

Broker fees

$ 500

Common stock, par value (in Dollars per share)

$ 0.001

^[1]

$ 0.001

^[1]

$ 0.001

^[1]

$ 0.001

^[1]

$ 0.001

$ 1

$ 0.001

Bid price of common stock (in Dollars per share)

$ 1

Received total proceeds from the unsecured PPP Loans

$ 800

Maturity date

May 07, 2025

Interest rate percentage

1.00%

Principal and interest payment

$ 24

Accumulated deficit

$ (247,148)

$ (266,374)

$ (247,148)

Cash equivalents, and marketable securities

200

Restricted cash balance

10,000

Current liabilities

$ 70,602

$ 41,372

41,372

$ 70,602

Aggregate offering price

$ 50,000

Average price (in Dollars per share)

$ 4.93

$ 50.85

Gross proceeds

$ 1,600

$ 25,797

Net proceeds

1,600

Commissions and fees to the agent

$ 48

Legal fees

$ 100

Impairment charge

54,700

Reclassification of impairment

15,200

Warrants to purchase common stock (in Shares)

71,139

Reserve for warranty returns

$ 600

Tax benefit percentage

50.00%

Common Stock [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Share issued (in Shares)

594,232

Minimum [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Exercise price (in Dollars per share)

$ 13

Maximum [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Exercise price (in Dollars per share)

$ 3.45

Revenues [Member] | Customer Concentration Risk [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Revenue percentage

10.00%

Revenues [Member] | Revenue from Rights Concentration Risk [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Revenue percentage

10.00%

Accounts Receivable [Member] | Customer Concentration Risk [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Accounts receivable percentage

10.00%

Accounts Receivable [Member] | Credit Availability Concentration Risk [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Revenue percentage

10.00%

Accounts receivable percentage

10.00%

SPA Warrant [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Warrants to purchase common stock (in Shares)

34,406

Pre-Funded 2022 Warrants [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Warrant purchase shares (in Shares)

75,000

December 2022 Warrants [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Warrant purchase shares (in Shares)

1,338,462

IPO [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Average price (in Dollars per share)

$ 50.85

Common Stock [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Bid price of common stock (in Dollars per share)

$ 1

Agrify Valiant LLC’s [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Ownership percentage

60.00%

Agrify Brands, LLC’s [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Ownership percentage

75.00%

Exchange Note [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Current liabilities

$ 41,400

Canaccord Genuity LLC [Member]

Overview, Basis of Presentation and Significant Accounting Policies [Line Items]

Net proceeds from offering cost

8,200

Shares sold (in Shares)

323,082

306,628

Gross proceeds

$ 15,600

Net proceeds

15,100

Commissions and fees to the agent

$ 500

Proceeds from ATM Program

$ 3,000

[1]

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of Property and Equipment, Net - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 8,137	$ 4,973
Accumulated depreciation	(2,695)	(2,372)
Construction in progress	2,943	7,443
Total property and equipment, net	8,385	10,044
Leased equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	4,465	602
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,123	1,111
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	904	1,049
Software [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	606	606
Computer and office equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	588	627
Research and development laboratory equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	183	260
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	116	504
Trade show assets [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	79	78
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 73	$ 136

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Note 9 - 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, 2023, the Company’s weighted-average discount rate utilized for its leases was 7.39%.

When a contract contained lease and non-lease elements, both were accounted for 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 common area maintenance associated with the property.

The Company had several non-cancellable 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 was as follows:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2023		2022		2023		2022
Operating lease cost	$	205	$	293	$	709	$	828
Finance lease cost:
Amortization of right-of-use assets		21		54		112		148
Interest on lease liabilities		2		7		13		26
Total lease cost	$	228	$	354	$	834	$	1,002

	September 30, 2023			December 31, 2022
Weighted-average remaining lease term – operating leases		3.23 years			3.59 years
Weighted-average remaining lease term – finance leases		0 years			2.30 years
Weighted-average discount rate – operating leases		7.39	%		6.76	%
Weighted-average discount rate – finance leases		—	%		7.83	%

(In thousands)	Balance Sheet Location	September 30, 2023		December 31, 2022
Assets
Right-of-use assets, net	Right-of-use, net	$	2,036	$	2,210
Finance lease assets	Property and equipment, net		—		261
Liabilities
Operating lease liabilities, current	Operating lease liabilities, current		669		734
Operating lease liabilities, non-current	Operating lease liabilities, non-current		1,550		1,587
Total operating lease liabilities		$	2,219	$	2,321

Finance lease liabilities, current	Accrued expenses and other current liabilities		—		152
Finance lease liabilities, non-current	Other non-current liabilities		—		147
Total finance lease liabilities		$	—	$	299

Maturities of operating and finance lease liabilities as of September 30, 2023 are as follows:

Years ending December 31 (In thousands),	Operating lease			Finance lease
Remaining 2023	$	212		$	—
2024		782			—
2025		748			—
2026		560			—
2027		202			—
Total minimum lease payments		2,504			—
Less imputed interest		(285	)		—
Total lease liabilities	$	2,219		$	—

Supplemental Consolidated Balance Sheet Information (Details) - Schedule of Other Non-Current Assets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of Other Non-Current Assets [Abstract]
Security deposits	$ 141	$ 153
Long-term deferred commissions expense		173
Total other non-current assets	$ 141	$ 326

Related Parties (Details) - Schedule of Net Related Party (Payable) Receivable - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Bluezone [Member]
Related Party Transaction [Line Items]
Related party (payable)	$ (4)
Valiant Americas, LLC [Member]
Related Party Transaction [Line Items]
Related party (payable)	1	(1)
Topline Performance Group [Member]
Related Party Transaction [Line Items]
Related party (payable)		$ 1

Revenue and Deferred Revenue (Tables)

9 Months Ended

Sep. 30, 2023

Revenue and Deferred Revenue [Abstract]

Schedule of Revenue Disaggregated by Timing of Revenue Recognition

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)	2023		2022		2023		2022
Transferred at a point in time	$	2,831	$	5,657	$	12,384	$	28,675
Transferred over time		308		1,362		1,625		23,694
Total revenue	$	3,139	$	7,019	$	14,009	$	52,369

Schedule of Current Deferred Revenue

Changes in the Company’s current deferred revenue balance for the three months ended September 30, 2023 and the year ended December 31, 2022 were as follows:

(In thousands)	Three months ended September 30, 2023			Year ended December 31, 2022
Deferred revenue – beginning of period	$	4,112		$	3,772
Additions		3,685			13,392
Recognized		(3,718	)		(13,052	)
Deferred revenue – end of period	$	4,079		$	4,112

Related Parties (Tables)

9 Months Ended

Sep. 30, 2023

Related Parties [Abstract]

Schedule of Net Purchasing (Sales) Activity

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)	2023		2022		2023			2022
Bluezone	$	—	$	—	$	4		$	5
Cannae Policy Group		—		—		—			25
Topline Performance Group		—		1		(1	)		71
NEIA		—		—		(43	)		(1,763	)
Greenstone Holdings		—		212		(2	)		392
Valiant Americas, LLC		—		1,315		—			11,120

Schedule of Net Related Party (Payable) Receivable

The following table summarizes net related party (payable) receivable as of September 30, 2023 and December 31, 2022:

(In thousands)	September 30, 2023			December 31, 2022
Bluezone	$	(4	)	$	—
Valiant Americas, LLC		1			(1	)
Topline Performance Group		—			1

Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2023

Overview, Basis of Presentation, and Significant Accounting Policies [Abstract]

Description of Business

Description of Business

The Company has nine wholly-owned subsidiaries, which are collectively referred to as the “Subsidiaries” and the Company also has ownership interests in certain companies.

Reverse Stock Splits

Reverse Stock Splits

Confidentially Marketed Public Offering

Confidentially Marketed Public Offering

Nasdaq Deficiency Notice

Nasdaq Deficiency Notice

The Paycheck Protection Program

The Paycheck Protection Program

Basis of Presentation and Principles of Consolidation

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

Reclassifications

Reclassifications

Cash and Cash Equivalents

Cash and Cash Equivalents

Marketable Securities

Marketable Securities

Accounts Receivable, Net

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 and nine months ended September 30, 2023 and 2022, the Company’s customers that accounted for 10% or more of the total revenue were as follows:

	Three months ended September 30, 2023				Three months ended September 30, 2022					Nine months ended September 30, 2023					Nine months ended September 30, 2022
(In thousands)	Amount		% of Total Revenue		Amount		% of Total Revenue			Amount		% of Total Revenue			Amount		% of Total Revenue
Company Customer Number - 136		*		*	$	908		12.9	%	$	1,930		13.8	%	$	7,054		13.5	%
Company Customer Number - 125		*		*		*		*		$	1,855		13.2	%		*		*
Company Customer Number - 139		*		*		*		*			*		*		$	8,590		16.4	%

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

Accounts Receivable, Net

As of September 30, 2023 and December 31, 2022, the Company’s customers that accounted for 10% or more of the total accounts receivable, net, were as follows:

	As of September 30, 2023					As of December 31, 2022
(In thousands)	Amount		% of Total Accounts			Amount		% of Total Accounts
Company Customer Number – 15095	$	718		60.5	%	$	352		32.9	%
Company Customer Number – 15874	$	405		34.1	%		*		*
Company Customer Number - 16491		*		*		$	123		11.5	%
Company Customer Number – 10888		*		*		$	251		23.5	%

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

Inventories

Inventories

Property and Equipment

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		5 to 13
Trade show assets		3 to 5
Leasehold improvements		Lower of estimated useful life or remaining lease term

Goodwill

Goodwill

Intangible Assets

Intangible Assets

The 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

Convertible Notes Payable

Convertible Notes Payable

Warrant Liabilities

Warrant Liabilities

Additionally, on April 18, 2023, the Company modified the exercise price of certain warrants, to reduce this from $13.00 per share to $3.45 per share.

Debt Issuance Costs and Debt Discount

Debt Issuance 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

Income Taxes

Income Taxes

Net Loss Per Share

Net Loss Per Share

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Other recent accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Loans Receivable (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
Loans Receivable (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Loan Receivable [Line Items]
Business plans period	10 years
Term loan agreement, description	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
Established reserve	$ 14.7	$ 12.5
Outstanding balance	14.7
Relates to settle amount	4.5
Bud Marys TTK Solution [Member]
Loan Receivable [Line Items]
Allowance for doubtful accounts	$ 14.7

Stock-Based Compensation and Employee Benefit Plans (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended	9 Months Ended
	Apr. 29, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Apr. 28, 2023
Stock-Based Compensation and Employee Benefit Plans (Details) [Line Items]
Shares issued		69,568			69,568		499
Stock option compensation expense		$ 500	$ 1,600		$ 2,100	$ 3,500
Compensation expense					$ 1,300
Weighted average period term					5 months 15 days
Unrecognized compensation expense				$ 700
2022 Plan [Member]
Stock-Based Compensation and Employee Benefit Plans (Details) [Line Items]
Shares available to be granted	26,483				13,198
Shares authorized	10,000
Shares issued	16,483
Shares outstanding	16,483
2022 Employee Stock Purchase Plan [Member]
Stock-Based Compensation and Employee Benefit Plans (Details) [Line Items]
Common stock shares reserved	2,500			2,500
Fair market value percentage				85.00%
Fair market value exercise percentage				85.00%
Purchase of common stock				$ 25

Inventory (Details) - Schedule of Inventory - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule of Inventory [Abstract]
Raw materials	$ 24,100	$ 24,960
Prepaid inventory	10,838	15,506
Finished goods	7,607	13,689
Inventory for resale	5,024
Inventory, gross	47,569	54,155
Inventory reserves	(29,845)	(32,759)
Total inventory, net	$ 17,724	$ 21,396

Income Taxes

9 Months Ended

Sep. 30, 2023

Income Taxes [Abstract]

Income Taxes

Note 13 — Income Taxes

The Company’s effective income tax rate was 0.0% and 0.2% for the nine months ended September 30, 2023 and 2022, respectively. The provision for (benefit from) income taxes was $0 and $0.2 million for the nine months ended September 30, 2023 and 2022, respectively. The difference between the Company’s effective tax rates for the 2023 and 2022 periods and the U.S. statutory tax rate of 21% was primarily due a valuation allowance recorded against certain deferred tax assets. The change in the provision for (benefit from) income taxes for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily due to a recording of a valuation allowance on the company’s net deferred tax assets.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
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-Paragraph 1
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 21
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

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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-Paragraph 17
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (SAB TOPIC 6.I.5.Q1)
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-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

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

9 Months Ended

Sep. 30, 2023

Overview, Basis of Presentation, and Significant Accounting Policies [Abstract]

Schedule of Revenue

For the three and nine months ended September 30, 2023 and 2022, the Company’s customers that accounted for 10% or more of the total revenue were as follows:

	Three months ended September 30, 2023				Three months ended September 30, 2022					Nine months ended September 30, 2023					Nine months ended September 30, 2022
(In thousands)	Amount		% of Total Revenue		Amount		% of Total Revenue			Amount		% of Total Revenue			Amount		% of Total Revenue
Company Customer Number - 136		*		*	$	908		12.9	%	$	1,930		13.8	%	$	7,054		13.5	%
Company Customer Number - 125		*		*		*		*		$	1,855		13.2	%		*		*
Company Customer Number - 139		*		*		*		*			*		*		$	8,590		16.4	%

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

Schedule of Accounts Receivable, Net

As of September 30, 2023 and December 31, 2022, the Company’s customers that accounted for 10% or more of the total accounts receivable, net, were as follows:

	As of September 30, 2023					As of December 31, 2022
(In thousands)	Amount		% of Total Accounts			Amount		% of Total Accounts
Company Customer Number – 15095	$	718		60.5	%	$	352		32.9	%
Company Customer Number – 15874	$	405		34.1	%		*		*
Company Customer Number - 16491		*		*		$	123		11.5	%
Company Customer Number – 10888		*		*		$	251		23.5	%

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

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		5 to 13
Trade show assets		3 to 5
Leasehold improvements		Lower of estimated useful life or remaining lease term

Schedule of Useful Lives

The 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

Net Loss Per Share (Details) - Schedule of Basic and Diluted Net Loss Per Share (Parentheticals) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule of Basic and Diluted Net Loss Per Share [Abstract]
Net loss per share attributable to Common Stockholders – diluted	$ (1.27)	$ (429.98)	$ (13.48)	$ (1,003.10)

- Definition

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
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-URI https://asc.fasb.org//1943274/2147482635/260-10-55-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Paragraph 11
-Subparagraph (a)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Subparagraph (b)
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-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Name Accounting Standards Codification
-Section 50
-Paragraph 7
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
-Name Accounting Standards Codification
-Section 45
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-URI https://asc.fasb.org//1943274/2147482689/260-10-45-2

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
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-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Name Accounting Standards Codification
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-Paragraph 4
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-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(25))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(27))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 15: http://www.xbrl.org/2003/role/exampleRef
-Topic 260
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-URI https://asc.fasb.org//1943274/2147482635/260-10-55-52

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
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-Section 45
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-7

+ Details

Fair Value Measures

9 Months Ended

Sep. 30, 2023

Fair Value Measures [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, 2023 and December 31, 2022, the Company’s assets and liabilities measured at fair value on a recurring basis were as follows:

	September 30, 2023								December 31, 2022
	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)	$	—	$	—	$	—	$	—	$	33	$	—	$	—	$	33
Money market funds		4		—		—		4		—		—		—		—
Corporate bonds		—		—		—		—		427		—		—		427
Total assets	$	4	$	—	$	—	$	4	$	460	$	—	$	—	$	460
Liabilities:
Warrant liabilities - January 2022 warrants		—		—		3		3		—		—		4		4
Warrant liabilities - March 2022 warrants		—		—		15		15		—		—		34		34
Warrant liabilities - August 2022 warrants		—		—		38		38		—		—		93		93
Warrant liabilities - December 2022 warrants		—		—		2,330		2,330		—		—		5,854		5,854
Total liabilities	$	—	$	—	$	2,386	$	2,386	$	—	$	—	$	5,985	$	5,985

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 as well as other balances of the Company are 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, 2023, approximated fair value.

●

The Company’s deferred consideration was recorded in connection with acquisitions during the six months ended September 30, 2023 and fiscal 2022 using an estimated fair value discount at the time of the transactions. As of September 30, 2023 and December 31, 2022, the carrying value of the deferred consideration approximated fair value.

●

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

Marketable Securities

As of September 30, 2023, the Company held investments in municipal bonds and corporate bonds. 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, 2023		December 31, 2022
Current marketable securities:
Money market funds	$	4	$	—
Corporate bonds		—		427
Mutual funds		—		33
	$	4	$	460

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. The company recorded no change in contingent consideration for the nine months ended September 30, 2023. The contingent earn-out payments to the sellers for each acquisition are based on the achievement of certain revenue thresholds.

(In thousands)	Year ended December 31, 2022
Contingent consideration – beginning of period	$	6,137
Accrued contingent consideration		1,420
Accretion of contingent consideration		149
Payments made on contingent liabilities		(5,550	)
Change in estimated fair value		(2,156	)
Contingent consideration – end of period	$	—

The Company included contingent consideration within accrued expenses and other current liabilities on its consolidated balance sheets as of September 30, 2023 and December 31, 2022.

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 $0.6 million and their second earn-out by approximately $0.2 million. As required by ASC Topic 805 Business Combination (“ASC 805”), the change in contingent consideration was recorded as a reduction in operating expenses during the third and fourth quarters of 2022, respectively.

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 and their second earn-out by approximately $0.5 million. As required by ASC 805, the change in contingent consideration was recorded as a reduction in operating expenses during the second and fourth quarters of 2022, respectively.

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 $0.1 million, to reflect the final contingent consideration amount due. This amount was recorded as an increase in operating expenses during the second quarter of 2022. During the period ended December 31, 2022, the Company made the final payment on the contingent consideration of approximately $5.6 million to the members of Precision and Cascade.

Warrant Liabilities

The estimated fair value of the warrant liabilities on September 30, 2023 is determined using Level 3 inputs. Inherent in a Black-Scholes option-pricing model are assumptions used in calculating the estimated fair values that represent the Company’s best estimate. The volatility rate is determined utilizing the Company’s own share price and the share price of competitors over time.

However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair values could be materially different.

January 2022 Warrants

The following table summarizes the Company’s assumptions used in the valuation as of September 30, 2023 and for the year ended December 31, 2022:

	As of September 30, 2023			December 31, 2022
Stock price	$	2.17		$	6.66
Exercise price	$	1,496.00		$	1,496.00
Expected term (in years)		3.82			4.58
Volatility		136.00	%		98.30	%
Discount rate - treasury yield		4.72	%		4.05	%

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, 2023:

(In thousands)	Nine Months Ended September 30, 2023
Warrant liabilities – beginning of period	$	4
Change in estimated fair value		3
Warrant liabilities - March 31, 2023		7
Change in estimated fair value		(1	)
Warrant liabilities –June 30, 2023		6
Change in estimated fair value		(3	)
Warrant liabilities –September 30, 2023	$	3

March 2022 Warrants

The following table summarizes the Company’s assumptions used in the valuation as of September 30, 2023 and for the year ended December 31, 2022:

	As of September 30, 2023			December 31, 2022
Stock price	$	2.17		$	6.66
Exercise price	$	430.00		$	430.00
Expected term (in years)		4.38			5.13
Volatility		130.00	%		97.96	%
Discount rate - treasury yield		4.66	%		3.99	%

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, 2023:

(In thousands)	Nine Months Ended September 30, 2023
Warrant liabilities – beginning of period	$	34
Change in estimated fair value		5
Warrant liabilities - March 31, 2023		39
Change in estimated fair value		(7	)
Warrant liabilities – June 30, 2023		32
Change in estimated fair value		(17	)
Warrant liabilities –September 30, 2023	$	15

August 2022 Warrants

The following table summarizes the Company’s assumptions used in the valuation as of September 30, 2023 and for the year ended December 31, 2022:

	As of September 30, 2023			December 31, 2022
Stock price	$	2.17		$	6.66
Exercise price	$	246.00		$	246.00
Expected term (in years)		4.38			5.13
Volatility		130.00	%		97.96	%
Discount rate - treasury yield		4.66	%		3.99	%

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, 2023:

(In thousands)	Nine Months Ended September 30, 2023
Warrant liabilities – beginning of period	$	93
Change in estimated fair value		(4	)
Warrant liabilities - March 31, 2023		89
Change in estimated fair value		(12	)
Warrant liabilities – June 30, 2023		77
Change in estimated fair value		(39	)
Warrant liabilities –September 30, 2023	$	38

December 2022 Warrants

The following table summarizes the Company’s assumptions used in the valuation as of September 30, 2023 and for the year ended December 31, 2022:

	As of September 30, 2023			December 31, 2022
Stock price	$	2.17		$	6.66
Exercise price	$	3.45		$	13.00
Expected term (in years)		4.38			4.98
Volatility		130.00	%		98.00	%
Discount rate - treasury yield		4.66	%		3.99	%

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, 2023:

(In thousands)	Nine Months Ended September 30, 2023
Warrant liabilities – beginning of period	$	5,854
Change in estimated fair value		(3,493	)
Warrant liabilities - March 31, 2023		2,361
Change in estimated fair value		1,885
Warrant liabilities – June 30, 2023		4,246
Change in estimated fair value		(1,916	)
Warrant liabilities –September 30, 2023	$	2,330

- Definition

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

Loans Receivable (Details) - Schedule of Breakdown of Loans Receivable by Customer - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Loans Receivable (Details) - Schedule of Breakdown of Loans Receivable by Customer [Line Items]

Total loan receivable

$ 11,298

$ 12,214

Customer 139 [Member]

Loans Receivable (Details) - Schedule of Breakdown of Loans Receivable by Customer [Line Items]

Loan receivable

14,691

Customer 136 [Member]

Loans Receivable (Details) - Schedule of Breakdown of Loans Receivable by Customer [Line Items]

Loan receivable

12,457

Customer 125 [Member]

Loans Receivable (Details) - Schedule of Breakdown of Loans Receivable by Customer [Line Items]

Loan receivable

9,012

9,048

Customer 24096 [Member]

Loans Receivable (Details) - Schedule of Breakdown of Loans Receivable by Customer [Line Items]

Loan receivable

6,810

5,890

Other – Non-TTK Solution [Member]

Loans Receivable (Details) - Schedule of Breakdown of Loans Receivable by Customer [Line Items]

Other – Non-TTK Solution

^[1]

3,178

Allowance for credit losses [Member]

Loans Receivable (Details) - Schedule of Breakdown of Loans Receivable by Customer [Line Items]

Allowance for credit losses

^[2],[3]

$ (19,215)

$ (33,050)

[1]	The current portion of loan receivable is 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 credit losses of approximately $14.7 million related to Bud & Mary’s ongoing litigation. Approximately $4.5 million relates to Hannah.
[3]	The balance was written off at December 31, 2022 due to the cancellation of this TTK Solution project.

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, 2023	Dec. 31, 2022
Schedule of Accrued Liability for Estimated Future Warranty Cost [Abstract]
Warranty accrual – beginning of period	$ 553	$ 398
Liabilities accrued for warranties issued during the period	230	264
Warranty accruals paid during the during	(198)	(109)
Warranty accrual – end of period	$ 585	$ 553

Net Loss Per Share (Details) - Schedule of Anti-Dilutive Shares - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive effect shares	1,508,565	144,790
Shares subject to outstanding stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive effect shares	11,379	14,286
Shares subject to outstanding warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive effect shares	1,495,001	121,539
Shares subject to unvested restricted stock units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive effect shares	2,185	8,965

Debt

9 Months Ended

Sep. 30, 2023

Debt [Abstract]

Debt

Note 8 – Debt

The Company’s debt consisted of:

(In thousands)	September 30, 2023			December 31, 2022
Note payable – Exchange Note	$	18,509		$	31,975
PPP Loan		518			656
Navitas loan		10			23
Related party debt		500			—
Other notes payable (1)		487			—
Total debt		20,024			32,654
Unamortized debt premium (discount)		614			(3,415	)
Total debt, net of debt discount		20,638			29,239
Less: current portion, net of current unamortized debt discount		(1,640	)		(28,832	)
Long-term debt, net of current	$	18,998		$	407

(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 $65.0 million, less applicable expenses, as set forth in the Securities Purchase Agreement, a senior secured promissory note in an aggregate principal amount of $65.0 million (the “SPA Note”), and a SPA Warrant to purchase up to an aggregate of 34,406 shares of Common Stock.

August 2022 Securities Exchange Agreement

On August 18, 2022, the Company reached an agreement with the Investor to amend its existing senior SPA Note and entered into the August 2022 Exchange Agreement. Pursuant to the August 2022 Exchange Agreement, the Company partially paid $35.2 million along with approximately $0.3 million in repayments for other fees 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 71,139 shares of Common Stock and modified an existing SPA Warrants to purchase up to an aggregate of 34,406 shares of Common Stock. The Company exchanged the SPA Warrant for new August 2022 Warrants.

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 holder 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 holder 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 holder 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.

Until the date the Exchange Note is fully repaid, the holder 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 has an exercise price of $430.00 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 has an exercise price of $246.00 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 completed 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 issued 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 August 2022 Warrants 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).

Modification of Notes Payable

On March 8, 2023, the Company entered into a Securities Exchange Agreement (the “Exchange Agreement” or “Second Amendment”) with the Investor. Pursuant to the Exchange Agreement, at closing the Company prepaid approximately $10.3 million in principal amount under the August 2022 Note and exchange $10.0 in principal amount of the remaining balance of the August 2022 Note for a new senior secured convertible note (the “Convertible Note”) with an original principal amount of $10.0 million. After the closing of the Exchange Agreement, the August 2022 Note remained outstanding with a remaining balance of $11.7 million.

This exchange was deemed to be an extinguishment under ASC 470, as the modified debt added a substantive conversion option that was not inherent in the August 2022 Note. As a result, the Company recognized a loss on the extinguishment of debt of $4,619,846.

Convertible Notes

On March 8, 2023, as a result of the Exchange Agreement, the Company issued a Convertible Note to the Investor with a principal balance of $10 million. The Convertible Note bears a 9.0% annualized interest rate, with interest to be paid monthly, in cash, beginning April 1, 2023. The principal amount of the Convertible Note will be payable on the Maturity Date, provided that the holder will be entitled to a cash sweep of 30% of the proceeds of any at-the-market equity offering and 20% of the proceeds received by the Company in connection with any other equity financing, which will reduce the outstanding principal amount under the August 2022 Note or the Convertible Note.

At any time, the Company may prepay all of the Convertible Note by redemption at a price equal to 102.5% of the then-outstanding principal amount under the Convertible Note plus accrued but unpaid interest. The holder will also have the option of requiring the Company to redeem the Convertible Note (i) on August 19, 2023 or August 19, 2024 at a price equal to the then-outstanding principal amount under the Convertible Note plus accrued but unpaid interest, provided that the redemption right on August 19, 2023 will not be exercisable if the Company raises at least $8.0 million in gross proceeds from equity offerings prior to such date, or (ii) if the Company undergoes a fundamental change (as defined below) at a price equal to 102.5% of the then-outstanding principal amount under the Convertible Note plus accrued but unpaid interest.

The Convertible Note will impose certain customary affirmative and negative covenants upon the Company, as well as covenants that will (i) restrict the Company and its subsidiaries from incurring any additional indebtedness or suffering any liens, subject to specified exceptions, (ii) restrict the ability of the Company and its subsidiaries from making certain investments, subject to specified exceptions, and (iii) restrict the declaration of any dividends or other distributions, subject to specified exceptions. If an event of default under the Convertible Note occurs, the holder can elect to redeem the Convertible Note for cash equal to (A) 115% of the then-outstanding principal amount of the Convertible Note (or such lesser principal amount accelerated by the Investor), plus accrued and unpaid interest, including default interest, which accrues at a rate per annum equal to 15% from the date of a default or event of default, or, only in connection with certain events of default, (B) the greater of the amount under clause (A) or the sum of (i) 115% of the product of (a) the conversion rate in effect as of the trading day immediately preceding the date that the holder delivers a notice of acceleration; (b) the total then outstanding principal amount under the Convertible Note (in thousands); and (c) the greater of (1) the highest daily volume weighted average price (“VWAP”) per share of Common Stock occurring during the fifteen consecutive trading days ending on, and including, the trading day immediately before the date the holder delivers such notice and (2) the highest daily VWAP per share of Common Stock occurring during the fifteen consecutive trading days ending on, and including, the trading immediately before the date the applicable event of default occurred and (ii) the accrued and unpaid interest on the Convertible Note.

Until the date the Convertible Note is fully repaid, the holder will have, 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.

If the holder elects to convert the Convertible Note, the conversion price per share will be $7.64, subject to customary adjustments for certain corporate events. The conversion of the Convertible Note will be subject to certain customary conditions. The Convertible Note may not be converted into shares of Common Stock if such conversion would result in the holder and its affiliates owning an aggregate of in excess of 4.99% of the then-outstanding shares of Common Stock, provided that upon 61 days’ notice, such ownership limitation may be adjusted by the holder, but in any case, to no greater than 9.99%.

The Company evaluated the embedded features in accordance with ASC 815-15-25 and the determined embedded features are not required to be bifurcated and separately measured at fair value.

Interest expense related to the Convertible Notes described above was $1,757,931 for the nine months ended September 30, 2023. Accrued interest totaled $1,041,388 as of September 30, 2023.

Note Conversion

Pursuant to the Exchange Agreement the Company entered into with High Trail Special Situations LLC on March 8, 2023, the Investor elected, on April 26, 2023, to convert $1.6 million of the remaining outstanding principal amount on the Convertible Note for 153,617 shares of Common Stock of the Company.

On May 1, 2023, the Company entered into a letter agreement with the above referenced accredited Lender (the “Letter Agreement”), pursuant to which the Company and the Investor agreed to exchange or redeem $2.0 million of the remaining outstanding principal amount under the Exchange Note for a total of 445,196 shares of Common Stock of the Company, subject to a Beneficial Ownership Limitation of 4.99% of the Company’s Common Stock. Due to the Beneficial Ownership Limitation of 4.99%, a total of 69,568 shares of Common Stock of the Company were issued to the Investor, with the remaining 375,629 shares held in abeyance until the balance (or portion thereof) may be issued in compliance with such limitations. As a result, the Company recognized a loss on the redemption of $11,609.

The following table summarizes the short-term and long-term portions of the Exchange Note as of September 30, 2023:

(In thousands)	Short-Term		Long-Term		Notes payable, net
Principal	$	—	$	18,509	$	18,509
Unamortized premium		316		298		614
Net carrying amount	$	316	$	18,807	$	19,123

As of September 30, 2023, future minimum payments were as follows:

Years ending December 31 (In thousands),
Remaining 2023	$	748
2024		648
2025		18,628
Total future payments	$	20,024

Related party debt

On July 12, 2023, the Board of Directors of the Company approved the issuance of an unsecured promissory note (the “Related Party Note”) in favor of GIC Acquisition, LLC (“GIC”), an entity that is owned and managed by the Company’s Chairman and Chief Executive Officer. Pursuant to the Related Party Note, GIC is obligated to lend up to $500,000 to the Company, $300,000 of which was delivered at issuance and the remaining $200,000 delivered on July 31, 2023. The Related Party Note bears interest at a rate of 10% per annum, will mature in full on August 6, 2023, and may be prepaid without any fee or penalty. The Related Party Note ranks junior to all existing secured indebtedness of the Company. The maturity date of the Related Party Note was subsequently amended to December 31, 2023 at which point principal and accrued interest will be repaid in full.

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 $0.8 million from the unsecured PPP Loan, which was originally scheduled to mature on May 7, 2022. The Company applied for forgiveness on the $0.8 million of PPP loan, but forgiveness was denied by the SBA. On June 23, 2022, the Company received a letter from Bank of America agreeing to extend the maturity date to May 7, 2025 and the loan 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, 2023 and December 31, 2022 were as follows:

(In thousands)	Balance Sheet Location	September 30, 2023		December 31, 2022
PPP Loan, current	Long-term debt, current	$	328	$	255
PPP Loan, non-current	Long-term debt		189		401
Total PPP Loan outstanding		$	518	$	656

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Loans Receivable

9 Months Ended

Sep. 30, 2023

Loans Receivable [Abstract]

Loans Receivable

Note 5 — Loans Receivable

A portion of the capital raised from the Company’s IPO was 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™, process design, training, implementation, proven grow recipes, product formulations, data analytics, and consumer branding.

On September 15, 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 million outstanding balance in the third quarter of 2022 due to the current litigation and the uncertainty of the customer’s ability to repay the outstanding balance. 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 year ended December 31, 2022, the Company established a reserve of approximately $12.5 million specifically related to Greenstone. Greenstone is a related party because one of the Company’s former Agrify Brands employees and its VP of Engineering had a minority ownership. 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. During the quarter ended June 30, 2023, the Greenstone loan was fully written off against the reserve as a result of the sale of Greenstone to Denver Greens. It was agreed that Denver Greens would not have to pay back Greenstone’s Loan.

The breakdown of loans receivable by customer as of September 30, 2023 and December 31, 2022 were as follows:

(In thousands)	September 30, 2023			December 31, 2022
Customer 139	$	14,691		$	14,691
Customer 136		—			12,457
Customer 125		9,012			9,048
Customer 24096		6,810			5,890
Other – Non-TTK Solution (1)		—			3,178
Allowance for credit losses (2)(3)		(19,215	)		(33,050	)
Total loan receivable	$	11,298		$	12,214

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

(2)	The balance was written off at December 31, 2022 due to the cancellation of this TTK Solution project.

(3)	The Company established an allowance for credit losses of approximately $14.7 million related to Bud & Mary’s ongoing litigation. Approximately $4.5 million relates to Hannah.

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

The Company analyzed whether any of the above customers are a VIE in accordance with ASC 810 and if so, whether the Company is the primary beneficiary requiring consolidation. Based on the Company’s analysis, the Company has determined that Greenstone, which is a related party because one of the Company’s former Agrify Brands employees and its VP of Engineering had a minority ownership, is a VIE. The Company’s loan receivable from Greenstone was written off in full during the quarter ending June 30, 2023.