Adam Jackson
Cannabis cultivation and extraction solutions company Agrify Corporation (Nasdaq: AGFY) touted a significant reduction in net losses for the third quarter ending Sept. 30, as sales continue to remain downbeat.
The company highlighted a series of successful cost-cutting measures and decisions that have led to the “lowest historical net loss” since its inception, which it believes marks a potential turning point for its future.
Agrify reported a revenue of $3.1 million, a decrease from the $7 million reported in the same period in 2022, though down nearly half sequentially from last period’s $5.1 million revenue figure. However, the company’s gross profit improved, reaching $1 million versus a loss of $4.1 million in the third quarter of 2022.
The net loss attributable to Agrify stood at $2.1 million, or $1.27 per basic and diluted share, a significant improvement from a net loss of $57.4 million, or $429.98 per share, in the same quarter of the previous year.
According to Raymond Chang, Chairman and CEO of Agrify, the company achieved approximately $1.1 million in savings through negotiations with vendors, the exit from additional leased properties, and the sale of several fixed assets. Additionally, a legal settlement contributed approximately $800,000 to the company’s gains.
“We are proud of the various initiatives the Company has taken to turn around our business,” Chang said in a statement Wednesday. “The historically low net loss of $2.1 million is encouraging and good evidence that we are moving in the right direction. The team remains committed to turn the business profitable in the shortest time possible.”
Operating expenses saw a substantial decrease to $5.6 million, down from $27.4 million in the same period last year. The reduction is largely attributed to decreased general and administrative costs. The operating loss for the third quarter of 2023 was reported at $4.6 million, compared to an operating loss of $31.5 million in 2022’s third quarter.
Still, the firm wrote in its filings that it “has incurred operating losses since its inception and has negative cash flows from operations and a working capital deficiency,” with an accumulated deficit of $266 million at the end of the quarter.
The company’s position continues to show liquidity concerns, too. As of Sept. 30, 2023, Agrify had only $200,000 in cash, cash equivalents, and marketable securities. That’s a stark contrast to the end of the previous year, when the company reported a restricted cash balance of $10 million, associated with its newer senior secured note. The current liabilities as of Sept. 30 stood at $41.4 million.
