S-1: AgriFORCE Growing Systems Files for Resale of Up to 9.7 Million Common Shares

AgriFORCE Growing Systems is registering for the resale of up to 9,698,474 shares of common stock by selling stockholders, with the company not receiving any proceeds from the sales.

Summary

• AgriFORCE Growing Systems Ltd. has filed a registration statement for the potential resale of up to 9,698,474 shares of its 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; the selling stockholders will receive all proceeds.
• The company will, however, incur expenses related to the registration of these shares.
• The selling stockholders may sell the shares through public or private transactions at prevailing market prices or negotiated prices.
• As of February 5, 2025, the last reported sale price of AgriFORCE's common stock on the Nasdaq Capital Market was $2.04 per share.
• AgriFORCE's business includes Ag-Tech, plant-based ingredients, sustainable Bitcoin mining, and controlled environment agriculture (CEA) equipment.
• The company has made acquisitions in the sustainable Bitcoin mining industry and now owns and operates three Bitcoin mining facilities.
• AgriFORCE is also developing and commercializing plant-based ingredients and products, such as Awakened Flour and Awakened Grains.
• The company is exploring opportunities to utilize its patented FORCEGH+ structure and its related technologies in joint ventures and licensing.
• AgriFORCE is also studying the utilization of FORCEGH+ technologies in arctic, tropical and desert environments.
• The company is exploring opportunities to utilize its patented FORCEGH+ structure and its related technologies in joint ventures and licensing.
• The company is also studying the utilization of FORCEGH+ technologies in arctic, tropical and desert environments and artificial intelligence and blockchain in the development and implementation of FinTech systems to commercial farmers, and advancing on the commercialization of our Hydroxyl clean room systems to greatly reduce the spread of pathogens, mold and disease at processing facilities worldwide.
• The company is exploring opportunities to utilize its patented FORCEGH+ structure and its related technologies in joint ventures and licensing.
• The company is also studying the utilization of FORCEGH+ technologies in arctic, tropical and desert environments and artificial intelligence and blockchain in the development and implementation of FinTech systems to commercial farmers, and advancing on the commercialization of our Hydroxyl clean room systems to greatly reduce the spread of pathogens, mold and disease at processing facilities worldwide.

Sentiment

Score: 5

Explanation: The document is neutral in tone, primarily focused on outlining the details of a share resale registration and providing background information on the company's business activities. The inclusion of risk factors tempers any potential positive sentiment.

Positives

• AgriFORCE is expanding into the sustainable Bitcoin mining industry, potentially creating new revenue streams.
• The company is developing innovative plant-based ingredients and CEA technologies, which could lead to increased market share.
• AgriFORCE is exploring joint ventures and licensing opportunities to expand the reach of its technologies.
• The company is integrating artificial intelligence and blockchain into its FinTech systems for commercial farmers, potentially improving efficiency and reducing costs.
• The company is advancing on the commercialization of our Hydroxyl clean room systems to greatly reduce the spread of pathogens, mold and disease at processing facilities worldwide.

Negatives

• The company will not receive any proceeds from the sale of shares by the selling stockholders.
• The company has a history of losses and may require additional financing to sustain operations.
• The company is subject to the legal proceeding and claims described in detail in Note 17. Commitments and Contingencies to the audited financial statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2023.

Risks

• Bitcoin prices are highly volatile, which may affect the company's ability to effectively manage growth plans and profitability.
• Failure to grow the company's hash rate may result in an inability to compete in the Bitcoin mining industry.
• Geopolitical or economic crises may create increased uncertainty and price changes, or motivate large-scale sales of digital assets, which could result in a reduction in some or all digital assets values and adversely affect an investment in our securities.
• The sale of the company's digital assets to pay expenses at a time of low digital asset prices could adversely affect an investment in our securities.
• The development and acceptance of digital asset networks and other digital assets, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate.
• The open-source structure of the Bitcoin network protocol means the contributors to the protocol are generally not directly compensated for their contributions in maintaining and developing the protocol.
• Changes to a digital asset network in which we are directing our mining efforts may adversely affect an investment in our securities.
• As the number of digital assets awarded for solving a block in the blockchain decreases, the incentive for miners to continue to contribute processing power to the respective digital asset network will transition from a set reward to transaction fees.
• If a malicious actor or botnet obtains control in excess of 50% of the processing power active on any digital asset network, including the Bitcoin network, it is possible that such actor or botnet could manipulate the blockchain in a manner that adversely affects an investment in our securities.
• Bitcoin is subject to halving, and as such the reward for successfully solving a block will halve several times in the future and its value may not adjust to compensate us for the reduction in the rewards we receive from our mining efforts, which could cause us to cease our mining operations altogether and investors could suffer a complete loss of their investment.
• To the extent that the profit margins of digital asset mining operations are not high, operators of digital asset mining operations are more likely to immediately sell their digital assets earned by mining in the digital asset exchange market, resulting in a reduction in the price of digital assets that could adversely impact an investment in our securities.
• The loss or destruction of a private key required to access a digital asset may be irreversible.
• Security threats to our business could result in, a loss of our digital assets, or damage to our reputation and our brand, each of which could adversely affect an investment in our securities.
• Our ability to adopt technology in response to changing security needs or trends and our reliance on, third-party custody providers, poses a challenge to the safekeeping of our digital assets.
• Digital asset transactions are irrevocable and stolen or incorrectly transferred digital assets may be irretrievable.
• The limited rights of legal recourse against us, and our lack of insurance protection expose us and our stockholders to the risk of loss of our digital assets for which no person is liable.
• If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin, we may lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affected.
• We rely on third-party hosting, and as such, our operations could be adversely affected by the actions or inactions of such third-parties.
• We have engaged in, and in the future may engage in, strategic acquisitions and other arrangements that could disrupt our business, cause dilution to our stockholders, reduce our financial resources and harm our operating results.

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+).

Management Comments

• The Company is grateful to its investors for the confidence placed in its ability to execute its business plan with the closing of the third acquisition in six months, which as with the Redwater acquisition is providing immediately cash flow to the Company.
• This acquisition has increased the Companys hashrate by over 600% and highlights the Companys strategic growth plan of stranded gas assets to be coupled with sustainable agricultural assets in the coming months.

Industry Context

AgriFORCE operates in the Ag-Tech sector, which is focused on modernizing agriculture through technology. The company's expansion into sustainable Bitcoin mining aligns with the growing trend of integrating renewable energy sources with cryptocurrency operations. The development of plant-based ingredients and CEA technologies addresses the increasing demand for sustainable and nutritious food sources.

Comparison to Industry Standards

• AgriFORCE's focus on CEA and hydroponics aligns with companies like AppHarvest and Plenty, which are also developing advanced indoor farming systems.
• The company's entry into sustainable Bitcoin mining is similar to initiatives by companies like Greenidge Generation, which are exploring ways to reduce the environmental impact of cryptocurrency mining.
• AgriFORCE's development of plant-based ingredients and products is comparable to companies like Beyond Meat and Impossible Foods, which are focused on creating sustainable and nutritious alternatives to traditional meat products.

Legal Proceedings

• We are subject to the legal proceeding and claims described in detail in Note 17. Commitments and Contingencies to the audited financial statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2023.

Related Party Transactions

• As of December 31, 2024, $183,333 (December 31, 2023, $57,561) 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, 2024 and 2023, the Company incurred $51,588 and $11,984, respectively, to our U.S. general counsel firm, Enso Law against legal services, a corporation controlled by a director of the Company.

Stakeholder Impact

• Shareholders: The resale of shares may create downward pressure on the stock price.
• Employees: The company's expansion into new areas may create new job opportunities.
• Customers: The development of new plant-based ingredients and CEA technologies may lead to improved product offerings.
• Suppliers: The company's growth may increase demand for supplies and services.
• Creditors: The company's financial performance will impact its ability to meet its debt obligations.

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.
• The company will file a registration statement on Form S-1 no later than 30 days from January 16, 2025 (or any subsequent closing) and effective no later than 60 days from January 16, 2025 (or the date of any subsequent closing; or 90 days, if there is full SEC review).

Key Dates

Keywords

AgriFORCE, common stock, resale, selling stockholders, debentures, warrants, Bitcoin mining, Ag-Tech, CEA, FORCEGH+, plant-based ingredients, Awakened Flour, cryptocurrency, blockchain, FinTech