Business Context and Reporting Period
This Form 8-K was filed by AgriForce Growing Systems, Ltd. on September 26, 2022, reporting an agreement amendment dated September 22, 2022. The filing identifies the registrant as AgriForce Growing Systems, Ltd.; the request metadata identifies AVAX ONE TECHNOLOGY LTD., which should be verified.
The company entered into an amendment to its agreement to acquire all issued and outstanding shares of Delphy Groep, B.V. The company is listed on Nasdaq under AGRI and AGRIW and is identified as an emerging growth company.
Financial and Transaction Metrics
- Total purchase price was reduced from $29.0 million to $17.66 million, based on a EUR/USD exchange rate of 1.00 as of September 20, 2022.
- The transaction includes a potential earnout of up to $5.99 million over two years, subject to future performance milestones.
- If closing does not occur by November 15, 2022, the company will pay interest on the purchase price at 4% per annum until closing.
- The filing states that interest was also assessed from May 9, 2022, through July 29, 2022.
- The filing does not provide revenue, profit, cash flow, margins, debt, cash, or liquidity figures.
Material Changes Versus the Prior Agreement
- The fixed purchase price decreased by $11.34 million, or approximately 39%, from $29.0 million to $17.66 million.
- A potential earnout of up to $5.99 million remains payable over two years based on performance milestones.
- The amendment establishes or confirms a 4% annual interest obligation if closing does not occur by November 15, 2022.
Outlook, Risks, and Unusual Items
Closing of the Delphy acquisition remained subject to completion by the applicable deadline. The potential earnout depends on future performance milestones, and the purchase price is subject to foreign-exchange assumptions stated in the filing.
Failure to close by November 15, 2022 could increase the effective acquisition cost through the 4% annual interest charge. The filing contains customary forward-looking statement warnings regarding execution, industry conditions, operations, acquisitions, assumptions, and other uncertainties.
Investor Verification Points
- Verify the registrant’s identity because the filing names AgriForce Growing Systems, Ltd., while the request metadata names AVAX ONE TECHNOLOGY LTD.
- Confirm whether the Delphy acquisition ultimately closed and determine the final consideration paid.
- Review the amendment for the detailed earnout milestones, payment terms, and closing conditions.
- Confirm the amount and treatment of interest assessed before and after the amendment.
- Assess the company’s available cash, financing arrangements, and liquidity needed to fund the acquisition.
- Review the referenced September 26, 2022 press release and any subsequent filings for transaction updates.