Agrify (AGFY) 10 Nov 212021 Q3 Earnings call transcript

Company Profile

Participants

Raymond Chang	Chief Executive Officer
David Kessler	Chief Science Officer
Niv Krikov	Chief Financial Officer
Aaron Grey	Alliance Global
Eric Des Lauriers	Craig-Hallum Capital
Scott Fortune	ROTH Capital Partners
Anthony Vendetti	Maxim Group
Gerald Pascarelli	Cowen

Call transcript

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Operator

Good morning, and welcome to Agrify's Third Quarter 2021 Earnings Call. With us on today's call are Raymond Chang, Chief Executive Officer; David Kessler, Chief Science Officer; and Niv Krikov, our departing Chief Financial Officer. Today, management will review the highlights and financial results for the third quarter and provide a business and operational update.

Following management's prepared remarks, there will be a question-and-answer session. A reminder that today's conference call is being recorded.

questions. would statements, remind additional and in to we remarks that forward-looking begin, response forward-looking contain management your we like everyone to prepared statements Before may make and mainly Such from performance unknown which statements statements. the outside control results, results, its company's implied or forward-looking could the number to performance involve of or are risks uncertainties, achievements by many a such and of cause future expressed that achievements known differ significantly contribute and to our release. or differences in factors include the in cause Important that earnings detailed such public Securities risks could the and those with filings Exchange Commission mentioned or Except as any whether update statements required to herein, law, events by as a no new otherwise. obligation or of other undertake forward-looking result we future information,

time, to over pleasure this at begin. turn Agrify's Sir, my is Mr. to you it call CEO. may Chang, Raymond the Now

Raymond Chang

Thank you, operator.

call on started, Before joining for we like us everyone get to today. thank I the would

you enabled acquisition follow of also well the CFO system. sought offering David departing with technology. as a Kessler, professionalism, you results that's will will accessed served including public quarter provide our Chief During Krikov, our VFU the are key the all our on and during our be of ir.agrify.com. we Relations strategy and some has remarks, our our can press Agrify He improvements On prepared Niv to customers Investor be from today, website contained quarter. discuss cost with which QX, who company for I we Officer, financial call successful game Science and on releases at to highlight within are purpose review making will third subsequent an our growth continued public will of with through our initial the some will and execution walk detailed My I achievements recent wise, changing our offering, as this information update our will recent referring developments. our

that As has valued Niv has Oakes, morning, Chief begin been Board, board as our Agrify in in on for Tim forward you will up and to and to our set announced today. are XXXX. ensure the served committee few to success Tim role many the stay for Tim graciously We will an future. a this both advisor the months effective Officer look to who audit Financial next member of introducing near transitioning of

his to exciting that us earlier impressive to For please our track additions release our issued press information growth. the team changes we and to executive and the highlighting morning, on Tim accelerate help refer record, this further

Now, our let's into dive highlights. QX

record $XXX million new healthy now the pipeline customers opportunities. results from new our of we have business our improvement growing in the be $XXX.X our at with of end $XX.X and at bookings cultivated our partnerships a million the to million by The to of year-over-year best quarter in robust generated third QX record are of thrilled XXXX. share with -- you our was and of pleased quarter I yet quarter to am for XX% sort our sequentially growth of $XX.X Besides we another revenue, with million, Agrify. that up and We the strong revenue that saw revenue We XXXX XXX% report -- record existing to end stands XXXX. driven and to-date from QX up continues backlog financial and

cultivation as moved wide facility, and Billerica, we location Agrify objectives. opened range headquarter corporate training of and centre, We also showcase our serves office. where Massachusetts a summer, University. the now product R&D production a accomplish facility business Over This to we

up the to of with now House partnership for installation True We also signed our VFUs. second XXX TTK Cannabis

revenue over recently now to $XX years. anticipated updated is generate million next increased more partnership than this the and in With XX accounts, VFU the

multi-year with Farming and a expanded impact harvest like established existing XXX and Curaleaf Nevada. Vertical And yield. of partnership plant that on during another partnership we we health the new our also study WhiteCloud in R&D with cultivation shipping dedication, addition, acknowledge to their environment for X.X the Botanicals displayed to results VFUs facility our Phase team X character QX. would In I of expansion

scale third and and I announcements While on MSOs global shaping the in and push hard combat will up Extraction most negotiations our to quarter quarter for to deliver the this chains mobilize discussions -- TTK Cascade and generally bit yet strategic we've to elaborate Sciences. transformative potential financial later cash behind our all and major important of promises; public the finalize to of scenes supply attention, get on for worked issues; incredibly efforts, acquisition up to for another manufacturing; with with which the customer little this be a us, in on and Based more Precision fourth these call. already customers; to is quarter record

turn who product David? my to Officer to call Science new initiatives point, customer David, give enhancements. the our this on and at an will Now well success over Chief would our as like update horticulture I as

David Kessler

clients Thank achieving cultivation our VFUs. using and and to you, performance our improvements leads QX, continue see new Raymond. In yield, consistency in

then prior five the variation cannabinoid across to products well batches. harvest than square and the one consistency cannabinoid concentration consumer of foot as batches of is grams stacked practical customers incredible floor quarter, terms, in for facility increase This XX next each branded all highest five reproducible more square In the the This VFUs X.XX% of across cycle, from in per Agrify’s foot of year configuration, three in VFU deliver – Agrify crop our past highest of Agrify continue the was months less customers that patient grams if per the towards of cannabis, saw quarters. X,XXX per propelling yield, experiences. yield of grams or foot over be potential per foot exceptional one are an would yield allocated. square space XX% of recorded facility customers flower level grown three consistency three XXX industry the see

automatically after features image with lights the VFU cannabis Joule be integrated Insights a best-in-class higher This micro-moles growth best before Utilizing succeed. quarter to precisely that Agrify with any and to with to harvest fostering via the immersive To also to the for and into support faster, human new our sanitation Agrify performance, data as foster the eye, industry-leading a our and deficiencies adjustable between sets play offers Mack potential yield, data accurate per new conductivity events eliminate in curriculum Agrify to incorporated Generation University, launched in include vast collection. Agrify media, granular facility as cycles, metric made an ongoing environmental of light well nutrient data to of VFUs A electrical data control including or lighting sensing improved they VFU tasks proactively and output leading in error X.X the in-person the X.X naked well biosecurity, as have to innovations, conductivity VFU X.X our Agrify analysis different automated recent the compliance of schedules. launch mode empowers capability seen improper and anomalies, crop our issues knowledge the from a efficiency, camera exciting of software, technology. with needs growing media and project-based other plug practices The most of well, We've lights quality more lensing the technology University our Generation as online enabling power efficiency To system varieties. be feedback has customers input on over and sanitize minimize manufacturer the durable, learning technological advancements for loss. sensing. manually underperformed Molding, generation fertigation long-term integration identify optimizations and system and industry. which features deliver spectrum can fertigation and we and incorporated effectively approximately moisture VFUs camera specific X.X risks improve Developed with one of enter experience enhanced of monitoring contract XX% serve capture, the a waste increase to with designed facility. based the Enabling with intelligent need eliminates tailored and that electrical increased to and which water efficiency heat can as helping important irrigation reducing

to the call With real seeing expect first VFUs Generation the advancements of these our world the Raymond. to that, X.X during the delivery of clients. will forward We improvements latest will to begin quarter turn to back we that look And XXXX. bring I

Raymond Chang

David. Thank you,

X.X we that We begin will next our in of are will confident year. first of quarter VFU we shipments --

that interest already in interest app expected today we grow intensify. Our are for indoor drive a And and to most operators XXXX we noticing well beyond. space and expect through events the are increase in marked our major to solution

stated on over financial we remain our the for continually this who success lowest Dave our at enhanced to mission review is improve providing strive highest Niv possible to consistency, the performance, focus highest With core to to of pass our an VFUs mission this highest cost. the results. At we As the success of quality to -- our yields, the I'd integral that, before, like will the customers. laser

Niv Krikov

overview Today, of everyone. financial with an quarter you results. provide morning, good I'll our and Raymond, third you, Thank XXXX

would begin, again, as the Financial Officer. to role to his Oakes welcome I incoming Chief Before like I in new Tim team

and worked during with future things so momentum taking proud a continuing transition, to As very Tim strong Tim the with QX alongside into XXXX. I ensure and Agrify, I accomplished excited closely the I'm a Tim bright year, reflect the for I've Agrify immensely on my my past work can to with the forward time and holds closely team tenure what to continue company. responsibilities. see Agrify its at to of seamless look I'm through the that an all extended over we've

to XX, quarter compared in for million period increased ended September same XXX% by XXXX, to XXXX. the the million, $XX.X revenue total $X.X For

were and and by of customers facility in materials. as our This global from facility are mainly XXXX second impacted our profit higher led this the XXXX, short-term revenue VFU as year expansion deliberately margin customers well as customer In the of We gross business loss cost, the revenue and margin towards the hardware, how negative new production $XXX,XXX off XXXX. revenue to hardware of Our SaaS to our to costs the increase VFU possible, ensuring growth half profit our period expectation by gross concentration resulting a as delivery X.X% production in are cost SaaS get important for not negative more and same online increasing successful in future QX anticipate significant extraordinary XXXX, to will it our a margins as our we a for to in model to of as short compared existing labor about with also kicking for and needs. effort QX, consisted and customers. from of facilities X.X% of term, is materials, with of understand more of customers. production has which of We Gross has This goods revenue delivery their including delaying term other $XXX,XXX unfortunately driven our disruption, is hardware revenue timely quarter a XXXX. but the shift been new the resulting took that this XXXX, continued for ensure quickly fees buildout the is come success. buildup our gross fiscal and was fully consistent compared and but of recurring mix up running chain sales, projects short by receipt the as in our cost more and gross supply facility loss third revenue, QX QX recurring of

stock to the production proactively we're XXXX. and steps to of the we of XX% required ahead, per from current VFU model, the we expected anticipated future company's begin with roughly increase goods, increase lights of the $X.X see that associated the fourth million, to $X,XXX staff executives support in from of the additional as reduction VFU are materials offering, was of breakup late production cost but VFU, a on the will fee first our associated secure costs We taking Further, the quarter matching up X.X the Looking growth. $X.X accelerated performance, of right to in anticipating cancellation XXXX. quarter XXXX with the currently X.X improved the cost. from attributed for all we The reduction QX XXXX primarily of overall SG&A shift only of in expenses benefit the to not cost this or for LED hiring refusal additional $X.X benefit on SG&A in million -- same an million and senior third period necessary significant first was up payroll to XXXX. the for $X.X up the million quarter and of

compensation $XXX,XXX in $X.X related the from services expenses, other Precision XXXX. in anticipate EBITDA costs all positive Additional public-traded was the period the XXXX. increases million and XXXX, was improve from for my XXXX. Total an and $X.X Cascade, the Adjusted million was compared financials. attributable in and EBITDA to XXXX. in contribution connection of stock-based in for professional QX will we legal development to significantly the $X.X Cascade quarter $XXX,XXX With to a operating million million call on of same were due compared directly million the of insurance the Research back a up loss the for expenses XXXX. -- and QX turn in I same acquisition. closing to million concludes with loss also $X.X will to include closing and anticipated to Thank company diligence Agrify QX for adjusted being QX you compared XXXX XXXX EBITDA statement. $X.X in costs loss QX our This of Raymond Net Precision quarter and remarks we for now $X.X fourth again. his period

Raymond Chang

Thank you, Niv.

During third quarter achieved XXXX, several we milestones. the of significant

a a Revenue rest is to EBITDA forge see and run further be pace newly $XXX rates margins through As anticipate our to bookings million, and revenue division. from equivalent previous We as to million, million our ahead to synergies million improve million we $XX annual we $XX anticipate positive $XX $XXX exceed to full to $XX $XX that the year continue Extraction year, of to to million QX of up we our to $XX approximately $XXX continue the of from acquired million. significantly guidance our million contributions million. to used

QX, during month XXX Mack and per to we and production So are capacity to that growth. VFU XXX Molding facility far, have ramp to the support production continue our production up Georgia our will our accelerated to roughly between we increased VFU confident

including announced partnership we earlier a secured with installation the XXX Massachusetts TTK also VFU We of week XX-year that their facility. USA, this at KIEF

in half which company accepted that We earlier month also an Arizona first year our order a the shows believe We've from we in attractive so profound our Mirage, secured is that meaningful And will mark. be QX this markets. for the ways. performance VFUs we right this our of reshape XXX always deal and in QX of second El far the on in are

Vegas. customers to our potential discussions in TTK MSOs, built more XX continue XX MJBizCon advanced exploring opportunities than with following and now states. particularly have with cash partnerships We Las In across over the successful for actively

milestone of and fourth extraction the Xst, excited we completion executing acquisition the cannabis Precision On the industry. have integration accretive most meaningful solution acquisition Since vertically our on leading end developments Extraction progress, our concludes accretive another initiating about the remain of is very positive on foothold ahead plan. Sciences, quarter a in and growth, significant October we Agrify's strategic very for multiple XXXX our integrated been organic hemp my call. attraction well sites, much through We look up-selling as guidance cannabis the XXXX major cross-selling these becoming beyond. finishing with very This yet to and XXXX And goal and both in of and in world's opportunities. for forward on continued are on both smart brands This acquisitions. there are remark. and growth the already lie industry. updating and in market provider thoughtful acquisition opportunities the Cascade reporting We a our asset in believe embracing recent organically strong, that you we and on merger as continued focused the

Operator, please for up from to questions ahead. Now, like I open audience. would go

Operator

question Your Instructions] Global. Alliance first Grey Aaron comes of [Operator from

open. line now is Your

Aaron Grey

be Hi, quarter and and XQ good well. what the on strong looks a congrats as morning, strong to

Raymond Chang

much Thank Very it. you, Aaron. appreciate

Aaron Grey

Absolutely.

I XXX the and on just acquisitions. about, the just it bookings, me for Cascade XQ understood you question believe sure attraction given could that's just Agrify business the or correctly to XXX legacy Precision that new of if Is XQ to said million million businesses first break million? bookings? with I Is between you some make also want So up recent the it that attributed XXX Thanks.

Raymond Chang

coming the main the and the selling XX% most picking very whole. was business, in excited in to And an Technology just recent remainder [indiscernible] – year. see for Yeah. continue literally cascades from super expecting coming between floor be we I somewhere I we're And to and a to showcase was from Cascade as the that and Precision well. highlights for in the are plus seeing want positive to we're business fact, opportunities latest contributor. uptick VSU Agrify of Agrify core just reiterate probably this XX% a believe precision from Cascade, We're and as core But one Aaron, on that synergies positive so position will attendance Agrify's our one X.X a also orders and the to

Aaron Grey

really color growth organic that's there. for really the bookings that Thanks and in strong and helpful

commentary MJ, So strong to and your the good hear second, interest off demand on there. going

conversations event So, partnership. you XX XX cancel TTK talked about MSOs with conversations -- another

guy's demand, Just about TTK, more take that, seems bandwidth about do manpower many to high side you're one lionshare thing in this how those the between ones few not of to own the because TTK the expanding, more they yearend, might on your getting tend think terms right particularly budgets you to and VSUs and be have ramp expertise in think now, how able help on your manpower like the up, with production about, MSOs cultivation on, take you'll you're to there. on your it as take over on which might next quarters the we

so, any of Thank be you. kind appreciated? And helpful there color would

Raymond Chang

And which to know obviously handle is more Yeah. you you're Aaron, can a it's probably what have correct. we a imbalance then point, absolutely now have. at this problem -- We great

to actually as to as is scale strong other new for So getting a we want world-class pleased develop the new So we very I that in be as as the focused. opportunities. am internally, right? Externally, very, internally, be resources announced I and be in this to to on we these way, executive believe to tremendous, going to CFO, high of we're team to to help caliber operators, what earlier our us well able TTK -- have stay tremendous for and I morning, business our yet ready is XX% believe XX% obviously another these will MSOs remainder the to very XXXX. all discussions continue I will bring

are really we we of that Now scalable and going -- than actually getting is the TTK XXX We have. the a VSU opportunities, thing. good under bigger opportunities the design and actually the not our size, Most the have modular kind of entertain belts. shows in is of scalability units. which to very probably Massachusetts event That less believe around maybe TTK anything actually we much QX are

have Massachusetts that into Arizona. now markets. you into the we two are maybe believe And As with I more, we we We would TTK announced production have or volume know, getting significant a partnerships. one X

Michigan. But the to probably focus looking again, in to XX% very be MSOs continue the in and to basically The stay we're progress. TTK going hype, going And XX% robust So, Jersey, like at will markets. about these to hosted to York, focused dedicated to attractive also limited there's pricing. we're New be be said, states Illinois sources I with and license attractive Florida, wholesales New on

Aaron Grey

congratulations success. there, color the queue. back helpful Very quarter on I'll continued and the jump and in

Operator

now question comes next Craig-Hallum Lauriers of your Eric Your Des from line is Capital. Sir, open.

Eric Des Lauriers

and as my Great. my questions taking Thanks for well. congrats offer

validating on Should really the those stage? understand stage R&D us your at we you with right so Curaleaf what the opportunities up of are still more at sort Can to announced similar help now? these Is of Following kind solution the think in MSOs. the as a -- discussions more by of of point? it this this kind partnerships bit on one

Raymond Chang

the in Since very units the good XX, Okay. discussions, basically Great so kind they than exercise. tell And come R&D And R&D fully to similar opportunities we're you XX that -- operators that a I that ready are to XX chunk more question. plus to a events. far various to other there can now the of the stages, also go the are Obviously, go opportunities. of more are having discussions not of similar and are right? are having lot But convinced. them

real about, again, -- opportunities XX sort but discussions the discussion XX in have full around have early also of units XX, we rollout. So I'll R&D, – we have

it's of this map over at So sort point. the

Eric Des Lauriers

Okay. of forward with -- they That's you hear. there wraps, these of this are think you All with great then R&D announcable of an if to Do looking do and partnership And under go to these be MSOs each sort right. some agreements? with would are guys? discussions -- keep

Raymond Chang

think Obviously, won't all I'm MSOs are of. ones as discussions public installed way. it's very Those to model and VFUs, Eric, back. in I we're hard I confident combination to switch again, start you base, do user possible. the it's once obviously, we like Yes, probably our of definitely full over the about to but going many is relationship, are they'd be have turn to know, a that But as the lot to think, And rollouts. probably But with the I the that ones right? announce. So believe, such a not want they that business our very as a

be partnerships basis. as going definitely default as this once to it, forward the we're going using getting confident VFUs start a possible, that about out getting because they all the on So there, it's many is

Eric Des Lauriers

us Precision one should Integration, goals how to but any revenue you timing still about getting well days charge some Okay. just the And last the we hardware on as kind in any any up for I to That's great. be kind very hear. you where here, kind of and it's tie, Cascade can good for timeline layering of sensors then Thanks. as me, of an early recurring to place and know, guys a start those solutions update would of think on extraction

Raymond Chang

Eric. Sure,

So and he's incoming on Operating President also COO, the Chief Officer, very as pleased our taking interim division, to say that Massie, GM extraction, role Thomas well.

his fantastic focus really assignment sure far, will kind smoothly. the And job. first a go he's of So on doing is that making thus integration very

at QX a mapped XXXX, basically sort with of will done end QX yet And hardware, I out. I so will begin by already team of our I well of, prototyping. be -- we of orders. were say QX, of sat we now more see we the people aggressive test an revenue have give we helping attached to that turning, of experiment at year, Right? have entity, fact, actually example, to our literally, begin think by, taking there significant just and to recurring lot will well supply to are now of of model, that's look essentially say, of several, want these and believe this people processes, I always bulk tradeshow. and as as out key opportunities, down to you this them right? QX sales the chain, production potentially of hunt order-taking beginning of and in Obviously, basically, to to some this believe, we milestones, software Precision hardware to as basically revenue, We're roll right? our has program it. to then, out And Cascade nice a a out fruits. improve already a to never QX, demonstratable to as team. looked I case, believe, integration growth. have we'll just some -- intelligent see that's customers. end They've there -- this, kind have kind would Number sales just kind hanging also our and essentially and the entire a But We're the in itself, SaaS to instead becoming able one, the this organic for development as low being

Eric Des Lauriers

hear. It's great to guys. again, Congrats

Operator

comes Scott Capital Your Fortune Partners. next ROTH with question from

now Your line is open.

Scott Fortune

on congrats morning, thanks the the Good And court. for question.

following on provide the your little more the run and importantly, added provide of you on solutions see and rate backlog market into solutions valuations the color partners a whole you of kind add of can in a up but solution. bit potential for little come you've Precision kind that from forward? to fragmented the your value-add Just continuing or Can you facilities integrated that, extraction, Cascade, other downstream that

Raymond Chang

do for Sure. of forma, on billion October I Cascade And are Precision release, the not think X. from pilot XXXX. as mentioned we until in press obviously, equivalent acquisition and our Scott, close expecting an $XX that's a pro basis because

line. top the So that's

what Extraction and very to from mentioned updating We both attractive very, positive pickup the, I we the we in for earlier, seeing -- as believe, Precision MJBiz the a and it's in in already QX division. Precision very, sell-in be had look very strong to businesses. are the if, I results Now, going very forward you on Cascade

and far, to combination really so Now, of maybe Cascade I portfolio. the XX% about believe gives us XX% of product Precision the

are We industry. in most integrated solution already the provider vertically the definitely

to However, think I like the I or combination partnership, aggressively the – that that or I XX% currently said, But already XX% to near-term. has acquisition, on will XX% a XX% forward XX% like additional to suites portfolio up products potentially complete entire we of and of in to about either of that. be be through entire were would everything look under there and partnerships, we And acquire, our in the are or either we working discussion. there Cascade, very offers. a solution But Precision completing are partner will XX% eat. still we opportunities about It distribution or

Scott Fortune

size? deals moving or bottleneck Great. for finance initiatives size color on you to And more business And said, in the that, additional then on need A as wise, in the XX I that little then up you or opportunities? additional I financing TTK that there on the circling million to up appreciate would opportunity, see side back the TTK be – that looking help seems with great. at provide schedule that on you're drive for know color. can potentially the partnerships Congrats they kind end of these

Raymond Chang

discussions financing TTK we this looking fact, not basis. provide that multiple to back Yes, Scott. arrangements, us our expand facility. a and to very project-by-project are capital one-off of We're credit program. continuing need to of on in in to to essentially have kind don't financing becoming of entities. other is are of And alternative with additional partner have hold conversations just They REIT the basically interested of types be, course, with the further million everyone that so because raise a most And

decisions. projects that is multiple kind know, would have these of take most support TTK related. you upfront We of Having to be the XX% construction since companies on And financing tremendous. as of the REIT to for XX% know, and other you REIT

financing, construction announced. that we key that themselves, that actually which they're construction. construction actually the real no announced in at be obtain loan Now, deals great. the our So that if in USA, for stepping recent handling taking most for cheaper fact, right? in addition, loans, Massachusetts estate and partner and they actually the example, Arizona the project, of There's particular the actually required just seems up is is can It deal look care both will you financing that we

only construction stepping but is with XX% up also partner loan, of hardware. Our not

table other and So welcomed people alternative that. to bring to to much beginning are very now financing the find we

a So credit. us combination very with REIT up other of or, efforts. be to I financing going strong done line company is one line deal maybe this getting a to Number think it's a of

So that simultaneously partners, offer as we to well. we could up your own seeing that capital actually stepping our with partners but are our also

So it's very, developments. positive very

Scott Fortune

and VFUs with issues, month manufacturing one chain and do going Thanks. And you the you'll reminders pipelines, per you industry I how with more now. of quick to mentioned in contracts XXX real supply hit space the when be the view forward? seeing right you needs you process question If outputs can produce can manufacturing add the XXX kind your have

Raymond Chang

Sure, Scott.

have in and out to already expect for not well. key we've not extrusion expected already in not the delivery, cannot we aluminum we components, fact, having built be shipped without for expect have our in a to QX, the did warehouse. was, QX, Nevada, obviously, as did example, all problem. And, small ship we was What all as be for something the for pipe So way to these we problem, as example, components units to actually them be PVC a trucking

came we only point. that overtime to impacted XXX commission they our we the those QX. and them are shipped, pay not sure end making the we by we in the of lot units global to as shipped -- non-key get to customers and we installed result, were to because is WhiteCloud, in So materials to news the promise. this are supply promised materials in and that units complete we at of chain, that essentially, that up a QX, live have actually committed the came late, all good to thoroughly And under a to want by the units, And they was I component the

It's of actually of right, $X,XXX cost script the have reduction. a that that's XX% Joule. we VFU, now forward, going actually production roughly about X to we $X,XXX supply is mentioned, overall we're as in micro-moles better materials management. roughly costs. we're Again we're from all to the next-generation see per bump have Furthermore, earlier, in light, of the smarter seeing well of chain I QX Going about yet, terms learned And going necessary as for getting that we VFU. as cost needs. QX believe which version And have X.X of And reduction. our my

So see to actually we we and can going chain and cost control, hardware will have reduce forward continue if basis. we supply under move the

Scott Fortune

I queue. Thanks. will back the jump in

Raymond Chang

Thank you, Scott.

Operator

question next Maxim Group. Your Vendetti comes from of Anthony

is now line Your open.

Anthony Vendetti

to about to capability million at point, working or looking has if Raymond, using talked TTK talk know in your outside balance decided you're bit sheet. Agrify? source this more I you little I note you. funding capital of -- $XX the through financing Thank a if additional options, just other increase wondering with approved could alternative about but tabs, program. the of additional and Board your sources that originally was I you've you

Raymond Chang

underway these mentioned internally. That to source to currently as we're that talking very is other working alternative and I -- I'm actually Personally, progress on talking to hard discussion financing and earlier, companies financing very front. making good

us to grow. goal on help cheaper to financing bring the continue to to and obviously, is So sources alternative

we seeing largest time, at the base. is our And also about getting again, are all business a progress the model great such customer TTK same However, fronts. on the

to is the discussion the allocation program. TTK So, potentially the underway to increase also internally

be of to going two. it's So, a combination

Anthony Vendetti

with were combination MSOs, like discussions attribute Cascade? then about looks your to that you've Okay, you of know discussions could with increased? about on that I Curaleaf Would portfolio, expanded ramped extraction with you're I last that, has deal, wondering you talk particularly significantly talk increased quarter. been excellent. number announced in those And advanced and in you the if it plus that how in has -- in have can Precision either -- a side the you number or and the just the was discussions

Raymond Chang

right. combination successful really It's right? customer it's Anthony Yes. the us having that, basically of all deployments, of

alluded customers, as right. with to right, Our numbers. results it's Precision, and interests on and against argue as hosteling, And amazing continuous well yield, and seeing just hard consistency David invalid are these our for very earlier, as also

in stressful And having the now of the to lot a conversation most just I visited. last probably conversations, seven nonstop people actually after with and conversations on relationship -- this our days. XX, just For there's attendance, one example, -- meeting MJBiz three booth actually fronts division synergies you tell better division. as have versa, as order seeing that happening results, vice the extraction we're basically we cultivation So, consistent actually using already you him to lot and about look, right? of production, the a need to have well VFUs crop the between How maybe out was from right? And started of for biomass after was better

Anthony Vendetti

just question, of a last obviously impacting industries. it's one And then number because

more a the issues have point ahead You do guess and bit Can little chain think any about did talk you're when of that. concerns trying sufficiently supply you bit place? I or to ahead for potential little and in you're you at the plans of mention a this that get about

Raymond Chang

months, QX continue for, of most make right. you global going instead to for sure have time, QX, worse, just I the in issue Yes, becomes of all supply and know, the materials we to three, wouldn't think basically monitor we -- to have the planning chain call, do place. that I'm lead six Obviously, we and nice

breeder able looking making that So, as is to can our quickly running VFU our time manufacturing you And short-term from installed business of deliver It's have customers we benefit. and top our is the will on on as time. we little forecast customer we So hinged our production the get we'll deliver revenue that sales one have all one for of if which And And because VFUs every is things a up given the our day, as procurement and can know, you know, and we team facility sure is bit do actually make help at Being we well team, sides recurring modules. just model everything mission, possible. you cost as on SaaS know, know, actually day day number priorities, of hardware about right? not we all VFUs the the sure both been promise, staying to to fulfill customers, money the fees. can to, top really and right. sooner, our that's one a if one the our on on is margin, hardware

Anthony Vendetti

the back I'll Excellent, thank queue. you. in hop

Operator

comes from question next Your Gerald Pascarelli Cowen. of

open. now is line Your

Gerald Pascarelli

and go ultimately square try factors to the Is are per increase. drivers your much to yield the foot to you. is stacking other drivers increase? back given back VFUs to I'd for it taking notable due of morning, there mindful behind XX% like that good and the tie questions. very Thank thanks and – or it Hi, to to the simply be

Raymond Chang

but And square actual foot. hitting footage square you think not grams going is because be to the answer person XX I increase. short a better answer It's now can that But please. the to of to basically the in here It’s David, stacking. close no. David, chime per plus

David Kessler

to to I'd be thank square foot per really the the When client, related the grams question. cultivation by cycles. XX Gerald, it happy iterative based achieved on for the you optimizations to. is comes increase

calculations are the over our records clients versus million calculated. controls So are because Agrify points, automatically square yield seeing that like hardware, Insights, that biomass VFU X.X planting things data foot density software our per program that

performance XX density, many content and team increasing to cultivation and the they a looking water harvest steer bit really go So is the entire optimize a now being cycles. increased top really data and bulking overall the decided weight that, in is able to at multiple couple biomass of lot increase different up grams on the the that related to and which recipes understanding to fertigation looking of genetic of longer weight final was which data, of the effectively. foot, facility They an little after is at across square in or the crop realize the a things; the plant that a yield to the of the trend Optimizations per cultivation tracking market across week, strains. On environment of

proliferation seeing very improvements. you're of happy of report able I'm these make goal. that to is actually And that being application data then what towards So that data, well being a to it's received. actionably and the to they're the data use And

Raymond Chang

last the Gerald, the really this for planting, reduce But just down of you the allowing more XX, during last period. to it week of you instead as XX. on So really Yeah, might expand example, David of strain, to realized room flowers actually right? mentioned, kind what basically really, genetic we bulked particular to that, harvest the up, know, just I week, add if that, is may

we're giving that have to optimization, giving us completely is scenario might Now that right, by on it's and actually to plant allowing customers you the to smarter And iterate by really again, game have different basis that continuously at under doesn't that hand, them our of changer. last effects. a XX. to these collect other allows genetic do that, data, on that the sort week Right? insights, be the count get genetic them insights, So should been genetic able

Gerald Pascarelli

very provide in competition color some you the five super maybe are just can flour incredibly your relative Thank color. grown on me last that's Got for batches, consistent your Randy, Thanks on for caps. just wholesale it. helpful terms Obviously, relative market of Last indoor current price gaps you. in up much. relative to one price variance. That environment? holding is in the premium is how your

Raymond Chang

can more please? you us that, provide on David, color

David Kessler

to. happy be I'd

are I think maturing terms the you In The it think I not that. compressing they've price that are as markets. compression markets quickly, mature experienced some seeing caps, in of already

point. and flour our ultimately consistency branded of on terms the and brands, hold just flour more The quality so to In their customers and it's well. is retain driven products then the doing allowing produced that consistency, ability quality, higher price, they're them market price introduce exceptionally into to really

Gerald Pascarelli

Perfect.

Raymond Chang

for on Nevada, XXXX, price example, I just they're around But the, that, Yeah, are XXXX. flours flours at their believe hosted to they our iterate is in XXXX Right. in Nevada. --we to is of selling XXXX. average for clouds white above selling customer premium this consistently doubling kind Nevada,

even to again, to a market. the that the So actually of better better a premium it's rest consistency quality allows at them of sell

Gerald Pascarelli

on. and it. much I color will pass you. for the very Thanks Got Thank it

Raymond Chang

joining questions? concludes Operator, for you would our a in all Bye-bye. for your this call again Thank your day. any you participation. have updating right. Agrify. and like for everyone All the thank We thank again This are Operator? continued morning. progress to our for not, forward and and If I there additional call great look today on to you interest

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