Form 4: Agrify Corp: RSLGH, LLC Receives Pre-Funded Warrants in Lieu of Cash Interest

RSLGH, LLC, a 10% owner and director of Agrify Corp, received pre-funded warrants in lieu of a cash interest payment, according to a Form 4 filing.

Summary

• On May 8, 2025, RSLGH, LLC (the 'Investor') entered into an amendment with Agrify Corporation (the 'Issuer') to the Secured Convertible Note dated November 5, 2025.
• The amendment involves the issuance of pre-funded warrants in lieu of a cash interest payment.
• No changes were made to the conversion price of the Note.
• The pre-funded warrants have an exercise price of $0.001 per share and are exercisable upon issuance.
• The warrants will expire when fully exercised and can be exercised on a cash basis or, at the Issuer's discretion, on a cashless basis if there's no effective registration statement for the underlying shares.
• The number of pre-funded warrants issued was 18,614, determined by dividing the interest payment owed by $27.42, the most recent closing price of Agrify's common stock at the time of the amendment.
• The pre-funded warrants include a beneficial ownership limitation of 49.99%.
• RSLGH, LLC is an indirectly wholly-owned subsidiary of Green Thumb Industries Inc.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The transaction is a financial maneuver to manage cash flow, but it also introduces potential dilution for existing shareholders. It's a fairly standard practice, so neither overly positive nor negative.

Positives

• The issuance of pre-funded warrants allows Agrify to conserve cash by issuing equity instead of making a cash interest payment.

Negatives

• The issuance of warrants will dilute existing shareholders if the warrants are exercised.

Risks

• The cashless exercise option for the warrants is contingent on the absence of an effective registration statement, which could impact the Investor's ability to exercise the warrants.
• The beneficial ownership limitation of 49.99% could restrict the Investor's ability to fully exercise the warrants.

Future Outlook

The document does not contain specific forward-looking statements beyond the mechanics of the warrant issuance and exercise.

Industry Context

This transaction reflects a common financing strategy where companies, particularly those seeking growth, use equity-linked securities like warrants to manage cash flow and attract investment. The cannabis industry, in which Green Thumb Industries operates, often sees such arrangements due to regulatory and market volatility.

Comparison to Industry Standards

• Issuing warrants in lieu of cash interest is a fairly common practice, especially for smaller companies or those in high-growth sectors like cannabis.
• Comparable companies might include other cannabis firms like Curaleaf or Trulieve, which have also used convertible notes and warrants as part of their financing strategies.
• The specific terms, such as the exercise price and cashless exercise provisions, are deal-specific and depend on the negotiation between the issuer and the investor.

Stakeholder Impact

• Shareholders may experience dilution if the warrants are exercised.
• Agrify benefits from conserving cash in the short term.
• RSLGH, LLC benefits from receiving equity in lieu of cash interest.

Next Steps

• The Investor may exercise the warrants in the future, subject to the terms of the agreement and the availability of a registration statement.

Key Dates

Keywords

pre-funded warrants, Agrify Corp, RSLGH LLC, Green Thumb Industries, Form 4, beneficial ownership, interest payment, equity, warrants