• Agrify, a US-listed company offering vertical farming solutions, has announced that it has raised USD 135 million in a senior secured note facility from an institutional lender.

• The funds will be used to improve Agrify’s working capital and support general corporate purposes.  

• According to the terms of the note facility, Agrify will initially receive USD 65 million and upon meeting certain conditions, will be eligible for the remaining 70 million in two separate fundings of USD 35 million each. The note will mature in four years and will have an interest rate of 6.75% per year to be paid in cash, on a quarterly basis starting from February 1, 2023. If interest cannot be paid in cash, Agrify has the option to pay interest in kind at 8.75% per year starting from the said date, which will be added to the principal amount. In addition, Agrify is also required to pay amortization of 4% at the start of each month from February 2023 until maturity date.

• The note facility is also convertible whereby Agrify will issue warrants with a term of 5.5 years to the lenders at the time of the funding. The warrants can convert the note into shares, equal to 65% of the principal divided by the closing stock price on the day before the initial funding agreement at USD 6.75 per share. Agrify will also issue warrants with similar conditions for each subsequent funding that will have a price equal to 110% of the closing price on the day before the funding is received.

<ul><li> Analyst QuickTake : The raise of funds via debt facility comes amidst the company’s expansion plans via inorganic growth strategy alongside the growing number of total turnkey solution partnerships the company is entering into. The company announced in December 2021 the acquisition of solventless extraction equipment manufacturer PurePressure for USD 9 million, accelerating the expansion of its cannabis and hemp division. To date, Agrify has also signed four customer partnerships to supply its vertical farming units (VFUs). This includes Kief USA (485 VFUs), Bud & Mary’s Cultivation Inc. (1,200 VFUs for Bud and Mary’s), True House Cannabis LLC (159 VFUs), and Olive El Mirage Partners LLC (400 VFUs).<ul>