Business Context and Reporting Period
The filing is a Form 8-K submitted by AgriForce Growing Systems, Ltd., although the request metadata identifies Avax One Technology Ltd. The report date is May 17, 2022, and it was signed on May 23, 2022. The company is incorporated in British Columbia and its common shares and Series A warrants trade on Nasdaq under AGRI and AGRIW, respectively.
Material Agreement Amendment
On May 17, 2022, the company amended its September 10, 2021 asset purchase agreement with Manna Nutritional Group LLC. The amendment changes certain consideration provisions from common-share issuances to prefunded warrants and revises the applicable valuation and vesting conditions.
- For the first $3.5 million of equity, the trigger valuation date is March 10, 2022.
- For the next $1.5 million of equity, the trigger valuation is based on the volume-weighted average price of the company’s common stock for the 10 trading days preceding the specified patent submission or resubmission work date.
- Additional prefunded warrants are to be issued in two tranches valued at $5 million on June 30, 2022, and $3 million on December 31, 2022.
- If the relevant patent is issued within 24 months of closing, the $8 million of warrants will vest in four equal amounts: upon patent issuance and on each of the following three quarterly anniversaries.
- If the patent is not issued within 24 months of closing, the $8 million of prefunded warrants are to be returned to the purchaser and the transaction purchase price reduced dollar-for-dollar.
Financial Metrics and Liquidity
The filing does not provide revenue, profit, cash flow, margins, debt, liquidity, or other operating financial metrics.
Guidance, Risks, and Contingencies
Exercise of the prefunded warrants into common shares is subject to obtaining shareholder approval of the acquisition transactions. The consideration is also contingent on the relevant patent being issued within 24 months of closing. The filing includes customary forward-looking statement disclosures regarding risks, uncertainties, assumptions, and the possibility that actual results may differ materially from expectations.
Key Facts to Verify
- Confirm the registrant’s identity, because the filing names AgriForce Growing Systems, Ltd., while the request metadata names Avax One Technology Ltd.
- Review the underlying Manna asset purchase agreement and the amended Section 2 provisions.
- Verify the closing date and the 24-month patent issuance deadline.
- Confirm shareholder approval requirements and whether approval was obtained before any warrant exercise.
- Track the June 30, 2022 and December 31, 2022 warrant tranches and any resulting dilution.
- Verify the status and timing of the referenced patent submission, resubmission, and issuance.