Cannabis production technology company Agrify has been acquired by controlled environment agriculture technology company Nature's Miracle Holding, Inc., valuing Agrify's stock at approximately $6.3 million.
The total amount of the transaction was not disclosed.
Under the terms of the transaction, Upland, Calif.-based Nature's Miracle will issue 0.45 shares of common stock to Agrify shareholders for each Agrify share they own, according to a Wednesday news release.
Raymond Chan, CEO and Chairman of the Board of Agrify, will become president of Nature's Miracle's Agrify division and a member of the company's board of directors.
Additional conditions
The deal also includes Nature's Miracle purchasing $750,000 worth of LED lighting from Agrify.
Finally, Nature's Miracle will buy out Agrify's debt owned by companies controlled by Mr. Chan, paying an unspecified combination of cash and stock.
The deal is expected to close within six months.
Nature's Miracle said in a release that the acquisition of Agrify “is expected to provide a meaningful revenue stream for Nature's Miracle through Agrify's strong (software-as-a-service) and AI technologies applicable to Nature's Miracle's vertical farming business.” “It will be done,” he said. Cannabis extraction market share continues to drive revenue growth. ”
“We believe that the indoor cultivation industry is in need of major consolidation, and we are pleased to have the opportunity to team up with one of the best and most experienced teams in the industry,” said Chan. said in a statement.
Survivability is questionable
Troy, Michigan-based Agrify reported fourth-quarter and full-year results earlier this week, revealing quarterly net income of $572,000 and annual net loss of $18.7 million.
Chief Executive Officer Chan said in a statement that the company “continues to see improvement and is on track to turn around.”
However, Agrify reported in its most recent 10-K annual report that there were “significant questions about its ability to continue as a going concern.”
Both companies are traded on the Nasdaq Exchange, with Agrify trading as AGFY and Nature's Miracle trading as NMHI.
