2023 Q4 Form 10-Q Financial Statement

#000149315223039152 Filed on November 02, 2023

View on sec.gov

Income Statement

Concept 2023 Q4 2023 Q3 2022 Q4
Revenue $16.28K $0.00 $0.00
YoY Change
Cost Of Revenue $13.58K
YoY Change
Gross Profit $2.700K
YoY Change
Gross Profit Margin 16.58%
Selling, General & Admin $3.631M $203.1K $3.135M
YoY Change 15.82% -55.09% 13.26%
% of Gross Profit 134480.74%
Research & Development -$27.05K $77.92K
YoY Change -124.38% -73.7%
% of Gross Profit
Depreciation & Amortization $169.8K $170.0K $6.700K
YoY Change 2434.93% 2432.02% 59.9%
% of Gross Profit 6290.37%
Operating Expenses $3.789M $176.0K $3.266M
YoY Change 16.03% -68.74% 5.54%
Operating Profit -$3.786M -$1.631M
YoY Change -52.16%
Interest Expense -$1.994M -$2.090M -$1.561M
YoY Change 27.74% 31.93% 22725.44%
% of Operating Profit
Other Income/Expense, Net $2.469M $230.0K $2.074M
YoY Change 19.01% -85.6% 456.01%
Pretax Income -$3.993M -$3.490M -$2.753M
YoY Change 45.07% 2.75% 0.91%
Income Tax
% Of Pretax Income
Net Earnings -$3.993M -$3.493M -$2.753M
YoY Change 45.07% 2.84% 0.91%
Net Earnings / Revenue -24527.83%
Basic Earnings Per Share -$4.03
Diluted Earnings Per Share -$1.43 -$4.03 -$0.14
COMMON SHARES
Basic Shares Outstanding 1.414M shares 38.14M shares 15.71M shares
Diluted Shares Outstanding 867.1K shares

Balance Sheet

Concept 2023 Q4 2023 Q3 2022 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $3.879M $810.0K $2.269M
YoY Change 70.91% -89.71% -70.81%
Cash & Equivalents $3.879M $586.6K $2.269M
Short-Term Investments $220.0K
Other Short-Term Assets $272.9K $250.0K $598.3K
YoY Change -54.4% -35.06% 93.61%
Inventory $38.86K $38.17K
Prepaid Expenses $223.6K $169.4K $436.5K
Receivables $30.86K $70.00K $48.94K
Other Receivables $0.00 $74.74K $48.94K
Total Short-Term Assets $4.221M $1.160M $2.917M
YoY Change 44.73% -86.02% -64.07%
LONG-TERM ASSETS
Property, Plant & Equipment $125.4K $92.48K $121.7K
YoY Change 3.04% -20.52% 196.97%
Goodwill
YoY Change
Intangibles $12.73M $12.62M $13.09M
YoY Change -2.72% 27.99% 786.07%
Long-Term Investments $223.8K
YoY Change
Other Assets $63.71K $0.00 $2.086M
YoY Change -96.95% -100.0% 4021.64%
Total Long-Term Assets $13.15M $16.18M $18.93M
YoY Change -30.55% 3.68% 418.82%
TOTAL ASSETS
Total Short-Term Assets $4.221M $1.160M $2.917M
Total Long-Term Assets $13.15M $16.18M $18.93M
Total Assets $17.37M $17.34M $21.85M
YoY Change -20.5% -27.47% 85.69%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.074M $623.9K $498.2K
YoY Change 115.49% 40.14%
Accrued Expenses $868.5K $665.7K $365.5K
YoY Change 137.59% 11.87%
Deferred Revenue $15.34K $23.26K
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $4.085M $4.670M $3.942M
YoY Change 3.62% 14.39%
Total Short-Term Liabilities $6.042M $6.860M $5.361M
YoY Change 12.71% 12.96% 134.5%
LONG-TERM LIABILITIES
Long-Term Debt $45.37K $40.00K $44.30K
YoY Change 2.42% -8.61% -6.4%
Other Long-Term Liabilities $2.716M $3.080M $5.899M
YoY Change -53.96% -60.86% 311.98%
Total Long-Term Liabilities $2.761M $3.120M $5.943M
YoY Change -53.54% -60.57% 301.79%
TOTAL LIABILITIES
Total Short-Term Liabilities $6.042M $6.860M $5.361M
Total Long-Term Liabilities $2.761M $3.120M $5.943M
Total Liabilities $8.803M $9.986M $11.30M
YoY Change -22.12% -28.6% 200.22%
SHAREHOLDERS EQUITY
Retained Earnings -$44.50M -$40.51M -$32.80M
YoY Change 35.67% 34.95% 64.82%
Common Stock $49.83M $41.89M $27.14M
YoY Change 83.58% 55.14% 5.87%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $8.565M $7.350M $10.54M
YoY Change
Total Liabilities & Shareholders Equity $17.37M $17.34M $21.85M
YoY Change -20.5% -27.47% 85.69%

Cashflow Statement

Concept 2023 Q4 2023 Q3 2022 Q4
OPERATING ACTIVITIES
Net Income -$3.993M -$3.493M -$2.753M
YoY Change 45.07% 2.84% 0.91%
Depreciation, Depletion And Amortization $169.8K $170.0K $6.700K
YoY Change 2434.93% 2432.02% 59.9%
Cash From Operating Activities -$1.065M -$1.100M -$3.191M
YoY Change -66.62% -71.28% 50.56%
INVESTING ACTIVITIES
Capital Expenditures $225.0K $0.00 -$38.27K
YoY Change -687.93% -100.0% 400.26%
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00 -$55.03K
YoY Change -100.0% -100.0% 358.58%
Cash From Investing Activities -$225.0K $0.00 -$16.75K
YoY Change 1243.28% -100.0% -14.76%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 4.534M 640.0K -2.260M
YoY Change -300.66% -93.51% -24876.54%
NET CHANGE
Cash From Operating Activities -1.065M -1.100M -3.191M
Cash From Investing Activities -225.0K 0.000 -16.75K
Cash From Financing Activities 4.534M 640.0K -2.260M
Net Change In Cash 3.244M -460.0K -5.467M
YoY Change -159.33% -107.61% 156.68%
FREE CASH FLOW
Cash From Operating Activities -$1.065M -$1.100M -$3.191M
Capital Expenditures $225.0K $0.00 -$38.27K
Free Cash Flow -$1.290M -$1.100M -$3.153M
YoY Change -59.08% -71.28% 49.29%

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<p id="xdx_80D_eus-gaap--NatureOfOperations_zl5zQhGebyG3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>1. <span id="xdx_82F_z3wEFPh1mxrc">NATURE OF OPERATIONS AND BASIS OF PREPARATION</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Business Overview</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AgriFORCE Growing Systems Ltd. (“AgriFORCE” or the “Company”) was incorporated as a private company by Articles of Incorporation issued pursuant to the provisions of the <i>Business Corporations Act (British Columbia)</i> on December 22, 2017. The Company’s registered and records office address is at 800 – 525 West 8<sup>th</sup> Avenue, Vancouver, British Columbia, Canada, V5Z 1C6.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company is an innovative agriculture-focused technology company that delivers reliable, financially robust solutions for high value crops through our proprietary facility design and automation Intellectual Property to businesses and enterprises globally through our AgriFORCE™ Solutions division (“Solutions”) and delivers nutritious food products through our AgriFORCE™ Brands division (“Brands”).</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Solutions intends to operate in the plant based pharmaceutical, nutraceutical, and other high value crop markets using its unique proprietary facility design and hydroponics based automated growing system that enable cultivators to effectively grow crops in a controlled environment (“FORCEGH+™”). The Company has designed FORCEGH+™ facilities to produce in virtually any environmental condition and to optimize crop yields to as near their full genetic potential possible whilst substantially eliminating the need for the use of pesticides and/or irradiation.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Brands is focused on the development and commercialization of plant-based ingredients and products that deliver healthier and more nutritious solutions. We will market and commercialize both branded consumer product offerings and ingredient supply.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Basis of Presentation</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying Unaudited Condensed Consolidated Interim Financial Statements and related financial information of AgriFORCE Growing Systems Ltd. should be read in conjunction with the audited financial statements and the related notes thereto for the years ended December 31, 2022 and 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 13, 2023. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the United States Securities and SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In the opinion of management, the accompanying interim financial statements contain all adjustments which are necessary to state fairly the Company’s financial position as of September 30, 2023 and December 31, 2022, and the results of its operations and cash flows during the three and nine months ended September 30, 2023 and 2022. Such adjustments are of a normal and recurring nature. The results for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2023, or for any future period.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Liquidity and Management’s Plan</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company has incurred substantial operating losses since its inception and expects to continue to incur significant operating losses for the foreseeable future. As reflected in the interim financial statements for the nine months ended September 30, 2023, the Company had a net loss of $<span id="xdx_906_eus-gaap--NetIncomeLoss_iN_pn5n6_di_c20230101__20230930_zeml6dLvje0l" title="Net loss">7.7</span> million, $<span id="xdx_906_eus-gaap--NetCashProvidedByUsedInOperatingActivities_iN_pn5n6_di_c20230101__20230930_zj5lUlinDrT7" title="Net cash used in operating activities">5.4</span> million of net cash used in operating activities, and the Company had a working capital deficit of $<span id="xdx_90E_ecustom--WorkingCapitalDeficit_iI_pn5n6_c20230930_zj4LDtLJT1r3" title="Working captial deficit">5.7</span> million.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company is at the development stage of its business plan. As such it is likely that additional financing will be needed by the Company to fund its operations and to develop and commercialize its technology. These factors raise substantial doubt about the Company’s ability to continue as a going concern. For the next twelve months from issuance of these interim financial statements, the Company will seek to obtain additional capital through the sale of debt or equity financings or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to our currently outstanding common shares. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Due to the uncertainty in the Company’s ability to raise capital, management believes that there is substantial doubt in the Company’s ability to continue as a going concern for twelve months from the issuance of these interim financial statements.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Reverse Stock Split</i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On October 11, 2023, the Company executed a one-for-fifty reverse stock split of the Company’s common shares (the “Reverse Split”). As a result of the Reverse Split, every 50 shares of the Company’s old common shares were converted into one share of the Company’s new common shares. Fractional shares resulting from the reverse split were rounded up to the nearest whole number. The Reverse Split automatically and proportionately adjusted all issued and outstanding shares of the Company’s common shares, as well as convertible debentures, convertible features, prefunded warrants, stock options and warrants outstanding at the time of the date of the Reverse Split. The exercise price on outstanding equity based-grants was proportionately increased, while the number of shares available under the Company’s equity-based plans was proportionately reduced. Share and per share data (except par value) for the periods presented reflect the effects of the Reverse Split. References to numbers of common shares and per share data in the accompanying financial statements and notes thereto for periods ended prior to October 11, 2023 have been adjusted to reflect the Reverse Split on a retroactive basis.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p>
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us-gaap Prior Period Reclassification Adjustment Description
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<p id="xdx_847_eus-gaap--PriorPeriodReclassificationAdjustmentDescription_zkGhlOv9y1S9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i><span id="xdx_860_z0gUnyrE6CCg">Reclassifications</span></i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i> </i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company has reclassified certain amounts in the 2022 consolidated financial statements to comply with the 2023 presentation.</span></p>
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CY2023Q3 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliations Recurring Basis Liability Value
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CY2022Q3 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliations Recurring Basis Liability Value
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us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
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us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
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CY2023Q3 us-gaap Lessee Operating Lease Remaining Lease Term
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CY2023Q3 us-gaap Lessee Operating Lease Discount Rate
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CY2023Q3 us-gaap Finance Lease Liability
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