S-1/A: AgriFORCE Growing Systems Files Amendment No. 1 to Form S-1 for Resale of Common Stock
Sentiment:
S-1/A Amendment
AgriFORCE Growing Systems has filed an amendment to its Form S-1 registration statement to allow selling stockholders to resell up to 32,528,740 shares of common stock.
Capital raiseOn June 30, 2022, the Company entered into security purchase agreements with certain accredited investors (the Debenture Investors) for the purchase of $14,025,000 in convertible debentures (the First Tranche Debentures) due December 31, 2024.On January 17, 2023, the Debenture Investors purchased additional tranches totaling $5,076,923 (the Second Tranche Debentures) and received 53,226 warrants (the Second Tranche Debenture Warrants).On October 18, 2023, a Debenture Investor purchased an additional tranche totaling $2,750,000 in convertible debentures (the Third Tranche Debentures) and received 620,230 warrants (the Third Tranche Debenture Warrants).On November 30, 2023, a Debenture Investor purchased an additional tranche totaling $2,750,000 in convertible debentures (the Fourth Tranche Debentures) and received 1,986,112 warrants (the Fourth Tranche Debenture Warrants).On February 21, 2024, a Convertible Debt Investor purchased an additional tranche of $1,100,000 in convertible debentures (the Fifth Tranche Debentures) and received 3,341,122 warrants (the Fifth Tranche Debenture Warrants).
Summary
- AgriFORCE Growing Systems Ltd. has filed Amendment No. 1 to its Form S-1 registration statement with the SEC.
- The registration statement pertains to the offer and sale of up to 32,528,740 shares of common stock by selling stockholders.
- These shares are issuable upon conversion of debentures and exercise of warrants previously issued by the company.
- AgriFORCE will not receive any proceeds from the sale of these shares by the selling stockholders, but will incur expenses related to the registration.
- The selling stockholders may sell the shares through public or private transactions at prevailing market prices or negotiated prices.
- The timing and amount of any sales are at the sole discretion of the selling stockholders.
- The company's common stock is listed on the Nasdaq Capital Market under the symbol AGRI.
- On May 6, 2024, the last reported sale price of AgriFORCE's common stock was $0.14 per share.
Sentiment
Score: 5
Explanation: The document is neutral in sentiment as it primarily describes the registration of shares for resale, without expressing strong positive or negative views about the company's prospects.
Future Outlook
The selling stockholders may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents.
Industry Context
This announcement is typical for companies that have issued convertible securities and warrants, as it allows the holders to resell their shares into the market.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| CEO | Ingo Mueller | Richard Wong (interim) | July 18, 2023 | Restructuring of management |
| Board Chair | Ingo Mueller | David Welch | November 10, 2023 | Management restructuring |
| President of AgriFORCE Solutions | Troy McClellan | January 25, 2024 | Resignation | |
| Chief Financial Officer | Richard Wong | February 10, 2024 | Resumed original role | |
| Executive Turnaround Consultant | Jolie Kahn | February 10, 2024 | Support operational growth and expansion efforts | |
| Director | Margaret Honey | February 19, 2024 | Resignation to pursue other interests |
Legal Proceedings
- On October 12, 2023, the Company was served a complaint filed in the Superior Court of California from Stronghold for breach of contract in relation to the PSA.
- The Company denies any liability, other than what is already recorded in the financial statements and will vigorously defend the claims made against the Company.
Related Party Transactions
- As of December 31, 2023, $57,561 (December 31, 2022, $32,500) in total was owing to officers and directors or to companies owned by officers and directors of the Company for services and expenses.
- During the year ended December 31, 2023 and 2022, the Company incurred $11,984 and $79,457, respectively, to our U.S. general counsel firm, Enso Law against legal services, a corporation controlled by a director of the Company.
Stakeholder Impact
- The resale of shares by selling stockholders could potentially dilute existing shareholders.
- The company will not receive any proceeds from the sale of these shares, so there is no direct financial benefit to the company from this offering.
Key Dates
| Date | Description |
|---|---|
| December 22, 2017 | AgriFORCE was incorporated as a private company. |
| September 10, 2021 | The Company purchased Intellectual Property (IP) from Manna Nutritional Group, LLC (Manna). |
| June 30, 2022 | The Company entered into security purchase agreements with certain accredited investors for the purchase of $14,025,000 in convertible debentures. |
| January 17, 2023 | The Debenture Investors purchased additional tranches totaling $5,076,923. |
| May 25, 2023 | The parties mutually terminated the share purchase agreement after extensive due diligence, an evaluation of the historical and projected financial information, potential for impairment risk as well as current market conditions. |
| June 20, 2023 | The Company issued 20,000 common shares with 20,000 warrants via a private placement for consideration of $250,000. |
| July 18, 2023 | The Company announced a restructuring of management. |
| October 1, 2023 | The Company signed a definitive agreement to purchase a 14% ownership stake in RCS. |
| October 12, 2023 | The Company was served a complaint filed in the Superior Court of California from Stronghold for breach of contract in relation to the PSA. |
| October 18, 2023 | A Debenture Investor purchased an additional tranche totaling $2,750,000 in convertible debentures. |
| November 10, 2023 | David Welch was appointed Board Chair. |
| November 30, 2023 | A Debenture Investor purchased an additional tranche totaling $2,750,000 in convertible debentures. |
| January 25, 2024 | Troy McClellan , President of AgriFORCE Solutions, submitted a letter of resignation to the Company. |
| February 10, 2024 | Richard Wong resumed his original role as Chief Financial Officer and Jolie Kahn was appointed Executive Turnaround Consultant. |
| February 19, 2024 | Margaret Honey resigned as a Director of the Company. |
| February 21, 2024 | A Convertible Debt Investor purchased an additional tranche of $1,100,000 in convertible debentures. |
| May 6, 2024 | The last reported sale price of AgriFORCE's common stock on the Nasdaq Capital Market was $0.14 per share. |
| May 7, 2024 | Date of the preliminary prospectus. |
Keywords
AgriFORCE Growing Systems, Form S-1, registration statement, common stock, selling stockholders, resale, debentures, warrants, AGRI, Nasdaq Capital Market
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