By Mary-Katherine Stinson
Lexington, Ky., March 14 – Agrify Corp. signed a 6¾% senior secured note facility for up to $135 million to use for working capital and general corporate purposes, according to a press release Monday.
The facility, which matures March 1, 2026, provides for an initial $65 million immediately upon closing with the option to draw down the remaining $70 million in two subsequent fundings of $35 million each subject to certain financing conditions.
Starting Feb. 1, 2023, amortization payments of 4% of original principal are required on the first day of the month.
After the first anniversary of the issuing of the note, the company may choose to pay interest in kind, in which case the interest will increase to 8.75% per annum and be added to the principal.
At initial funding, the company issued warrants to the lender for 5.5 years exercisable for the number of shares equal to 65% of the funding amount divided by the closing stock price on the trading day prior to the date of the agreement.
The initial warrants will have an exercise price equal to $6.75 which is 110% of the closing stock price on the trading day prior to the date of the agreement. Each warrant issued in subsequent fundings will also be at the same price.
The warrants include a limitation that the lender’s beneficial ownership is not to exceed 4.99% of company’s shares outstanding at the time of exercise. The percentage may be increased or decreased by lender subject to terms of the warrants but may not exceed 9.99%.
The note will be prepayable after one year by redemption at 106.75 of the then-outstanding principal amount plus unpaid interest.
If there is a fundamental change, the note will be putable at 107.
In the case of a default, the lender can elect a redemption for cash at 115, or a lesser amount accelerated by the lender, plus interest.
Until the note is repaid in full the lender will have the right to participate up to 30% of any debt, preferred stock or equity-linked financing of company or its subsidiaries.
A.G.P./Alliance Global Partners was the sole placement agent.
Burns & Levinson LLP was the company’s legal counsel.
Billerica, Mass.-based Agrify is a provider of premium cultivation and extraction solutions for the cannabis and hemp industry.
| Issuer: | Agrify Corp.
|
| Amount: | $65 million
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| Issue: | Senior secured note
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| Maturity: | March 1, 2026
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| Placement agent: | A.G.P./Alliance Global Partners
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| Counsel to issuer: | Burns & Levinson LLP
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| Coupon: | 6¾%, to start with option of 8¾% PIK
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| Warrants: | Exercise price of $6.75 for five years
|
| Call features: | At 106.75 after one year
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| Change of control: | At 107
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| Announcement date: | March 14
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| Distribution: | Private placement
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