AgriFORCE Growing Systems Reports Significant Financial Challenges, Net Loss, and Restructuring Efforts

AgriFORCE Growing Systems Ltd. reported significant financial challenges in its latest 10-Q filing for the nine months ended September 30, 2024. The company generated revenue of $41,315, a stark contrast to the previous year's revenue of $0 for the same period, primarily from sales of hydroxyl generating devices. However, the company faced a net loss of $13.4 million, compared to a net loss of $7.7 million in the prior year, indicating a worsening financial position.

The company's total assets decreased to $10.8 million as of September 30, 2024, down from $17.4 million at the end of 2023. This decline was attributed to a significant impairment of intangible assets, which amounted to $4.1 million due to a drop in stock price and the write-down of the Manna patent. Total liabilities also decreased to $4.1 million from $8.8 million, reflecting a reduction in debt obligations.

AgriFORCE's cash reserves fell sharply to $1.4 million from $3.9 million at the end of 2023, while total shareholders' equity decreased to $6.7 million from $8.6 million. The company’s accumulated deficit increased to $57.9 million, highlighting ongoing financial strain.

Strategically, AgriFORCE made notable moves, including the acquisition of Radical Clean Solutions (RCS) in August 2024, which expanded its technology applications beyond agriculture. This acquisition followed a previous investment in RCS, where AgriFORCE held a 14% stake. The company also launched UN(THINK) Awakened Flour™, a new product aimed at the health-conscious market.

Operationally, AgriFORCE underwent significant restructuring, reducing its workforce from 15 employees in Q3 2023 to just 6 by Q3 2024. This reduction contributed to a decrease in wages and salaries by over $1.1 million. The company also shifted its strategic focus from plant-based pharmaceuticals to broader applications of its proprietary technology across various industries.

Despite these challenges, AgriFORCE reported a decrease in net cash used in operating activities, which fell to $3.4 million from $5.4 million in the previous year. The company is currently assessing its ability to continue as a going concern, with management expressing substantial doubt regarding its financial viability without additional financing.

In terms of compliance, AgriFORCE received a Staff Listing Determination Letter from Nasdaq due to its share price falling below the required threshold, prompting plans for a reverse stock split to regain compliance. The company is scheduled to hold a shareholder meeting on November 25, 2024, to seek approval for this action.