AGRI.Agriforce Growing Systems LTD

S-1: AgriFORCE Growing Systems Files for Resale of Up to 432 Million Shares of Common Stock

Sentiment:

Registration Statement

📋All filings for Agriforce Growing Systems LTD
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AgriFORCE Growing Systems Ltd. has filed a registration statement for the resale of up to 432,528,740 shares of its common stock by selling stockholders.

Delay expectedDelays in the launch of the sale of our UN(THINK) flour.
Capital raiseOn 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).On April 11, 2024, an Investor purchased an additional tranche of $550,000.The convertible debt and warrants were issued with an exercise price of $0.163 and $0.18, respectively.
Worse than expectedThe company has a history of losses and cannot assure profitability.The company had negative cash flow for the year ended December 31, 2023.The company had negative cash flows from operating activities for year ended December 31, 2023.

Summary

  • AgriFORCE Growing Systems Ltd. has filed a Form S-1 registration statement with the SEC to allow selling stockholders to offer for resale up to 432,528,740 shares of the company's common stock.
  • The shares being offered are issuable upon conversion of debentures and exercise of warrants previously issued by AgriFORCE.
  • The company will not receive any proceeds from the sale of these shares by the selling stockholders, but will incur expenses related to the registration of the shares.
  • The selling stockholders may sell the shares through public or private transactions at prevailing market prices or negotiated prices, with the timing and amount of sales at their sole discretion.
  • The company's common stock is listed on the Nasdaq Capital Market under the symbol AGRI, and its Series A Warrants are listed under the symbol AGRIW.
  • On May 6, 2024, the last reported sale price of AgriFORCE's common stock on the Nasdaq Capital Market was $0.14 per share.

Sentiment

Score: 3

Explanation: The document primarily focuses on registering shares for resale, which doesn't inherently indicate positive or negative sentiment. However, the company's financial situation, including accumulated deficits and negative cash flow, suggests a cautious outlook.

Risks

  • Investing in the company's securities involves a high degree of risk, as detailed in the prospectus.
  • The company is an early stage company with little operating history, a history of losses and the Company cannot assure profitability.
  • The Company will require additional financing and there is no assurance that additional financing will be available when required.
  • The market price of our common shares and Series A Warrants may be volatile, and you may not be able to resell your common shares and Series A Warrants at or above the acquisition price.

Future Outlook

The company intends to continue development and license its technology to existing farmers in the plant based pharmaceutical, nutraceutical, and high value crop markets using its unique patented facility design and hydroponics based automated growing system that enable farmers to effectively grow crops in a sealed controlled environment (FORCEGH+).

Industry Context

The Ag-Tech sector is severely underserved by the capital markets, and we see an opportunity to acquire global companies who have provided solutions to the industry and are leading innovation moving forward.

Comparison to Industry Standards

  • The Company believes that it has no direct competitors who provide a proprietary facility design and automated grow system as well as a system of operational processes designed to optimize the performance of the Companys grow houses.
  • On a broader basis, the competitive landscape includes greenhouse vendors, agriculture systems providers, automated grow system vendors, and system/solutions consultants.

Management Changes

RolePrevious PersonNew PersonEffective DateReason
CEO and Chair of the BoardIngo MuellerRichard Wong (interim)July 18, 2023Management restructuring
Board ChairDavid Welch and John Meekison (Co-Chairs)David WelchNovember 10, 2023Appointment
President of AgriFORCE SolutionsTroy McClellanJanuary 25, 2024Resignation
Executive Turnaround ConsultantJolie KahnFebruary 10, 2024Appointment
DirectorMargaret HoneyFebruary 19, 2024Resignation

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 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, the Company incurred $11,984 to our U.S. general counsel firm, Enso Law against legal services, a corporation controlled by a director of the Company.

Stakeholder Impact

  • Shareholders may experience dilution due to the potential conversion of debentures and exercise of warrants.
  • The market price of the company's common stock could be volatile.

Next Steps

  • 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.

Key Dates

DateDescription
December 22, 2017AgriFORCE was incorporated as a private company.
September 10, 2021The Company purchased Intellectual Property (IP) from Manna Nutritional Group, LLC (Manna).
June 30, 2022The Company entered into security purchase agreements with certain accredited investors for the purchase of $14,025,000 in convertible debentures.
January 17, 2023The Debenture Investors purchased additional tranches totaling $5,076,923.
July 18, 2023The Company announced a restructuring of management.
October 1, 2023The Company signed a definitive agreement to purchase a 14% ownership stake in RCS.
October 18, 2023A Debenture Investor purchased an additional tranche totaling $2,750,000 in convertible debentures.
November 30, 2023A Debenture Investor purchased an additional tranche totaling $2,750,000 in convertible debentures.
January 25, 2024Troy McClellan, President of AgriFORCE Solutions, submitted a letter of resignation to the Company.
February 10, 2024Richard Wong resumed his original role as Chief Financial Officer and Jolie Kahn was appointed Executive Turnaround Consultant.
February 19, 2024Margaret Honey resigned as a Director of the Company.
February 21, 2024A Convertible Debt Investor purchased an additional tranche of $1,100,000 in convertible debentures.
May 6, 2024The last reported sale price of the company's common stock was $0.14 per share.

Keywords

common stock, resale, registration statement, AgriFORCE Growing Systems, debentures, warrants, selling stockholders, AGRI, AGRIW

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