VANCOUVER, British Columbia-based AgriForce Growing Systems Ltd. (NASDAQ:AGRI), a company specializing in prefabricated metal buildings and components, has entered into a new equity distribution agreement with Maxim (NASDAQ:MXIM) Group LLC, according to a recent 8-K filing with the U.S. Securities and Exchange Commission.
The agreement, dated September 10, 2024, allows for the sale of common stock up to $3.08 million through Maxim, acting as a sales agent or principal.
This new arrangement with Maxim replaces the former At The Market Offering Agreement with B. Riley, Inc., which was terminated on the same date. The shares are offered under a prospectus supplement filed as part of a shelf registration statement on Form S-3, initially filed on August 9, 2022, and declared effective on August 11, 2022.
The equity distribution agreement enables AgriForce to periodically sell its common shares at market prices. The timing and amount of any sales will be determined by various factors at the company's discretion. The proceeds from the sale of shares are expected to be used for general corporate purposes, which may include working capital, capital expenditures, and other business opportunities.
The terms of the deal include a commission to Maxim Group LLC for their role in the transaction. The specific details of the commission and other terms of the agreement were outlined in the filed prospectus supplement.
In other recent news, AgriForce Growing Systems Ltd. has announced new compensation arrangements for key executives. The changes, outlined in a recent SEC filing, include revised salary packages for Chairman David Welch and CEO Jolie Kahn. Effective July 1, 2024, Welch will receive an annual cash compensation of $45,000, plus restricted stock units (RSUs) valued at $50,000 for each successful acquisition or joint venture transaction.
Kahn's annual cash salary, starting June 4, 2024, will be set at $220,000, with additional sums accruing quarterly, and an equivalent amount in RSUs awarded annually. Both executives may also be considered for bonuses and other forms of compensation as determined by the company's Compensation Committee.
InvestingPro Insights
AgriForce Growing Systems Ltd. (NASDAQ:AGRI) is navigating a challenging financial landscape, as evidenced by real-time data from InvestingPro. With a modest market capitalization of $5.36 million, the company is trading at a low Price / Book multiple of 0.47, suggesting that the market values the company's assets conservatively relative to its share price. However, the financial metrics indicate significant headwinds: a negative P/E Ratio of -0.06 and an adjusted P/E Ratio for the last twelve months as of Q2 2024 standing at -0.59, reflecting investor concerns over profitability.
InvestingPro Tips highlight that AgriForce holds more cash than debt on its balance sheet and analysts expect sales growth in the current year, which could provide some optimism for potential investors. Nevertheless, the company is currently not profitable, with a gross profit margin of -48.93% for the last twelve months as of Q2 2024, and analysts do not anticipate profitability this year. The stock has also experienced high price volatility and is trading near its 52-week low, which may appeal to risk-tolerant investors looking for a potential turnaround story. Additionally, AgriForce does not pay a dividend, which could be a factor for income-focused investors to consider.
For those interested in a deeper analysis, InvestingPro offers additional tips on AgriForce, which could provide further insights into the company's performance and potential investment opportunities. To explore these tips and more, visit: https://www.investing.com/pro/AGRI
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