Agrify, a provider of cultivation and extraction solutions for the cannabis industry, saw its net losses dramatically increase during a difficult second quarter for the cannabis industry.
The company reported a total net loss of $93.4 million, compared to a net loss of $5.6 million in the same quarter of 2021.
Despite revenue rising 63.5% during the quarter to $19.3 million, Agrify’s massive $93.1 million in operating expenses more than offset. The company primarily attributed the increase to an impairment charges of $69.9 million; increases to reserves associated with accounts receivable, loans receivable, inventory obsolescence, and warranty costs; increases in depreciation and amortization; and changes in contingent consideration related to the fair value estimates associated with ongoing acquisition-related earnout arrangements, according to a news release.
"The second quarter was challenging for the entire cannabis industry," said CEO Raymond Chang. "Despite this difficult business environment, which has impacted our recent performance and altered our outlook for the remainder of 2022, we are actively taking steps to adapt to the new market realities. We have adjusted our near-term strategy and priorities to focus on the most immediate and impactful revenue-generating opportunities, all without compromising our ability to capitalize on the expected long-term growth in the sector. In parallel, we are also in the process of restructuring our credit facility and reducing our operating expenses to strengthen our cash position. We remain steadfast on bringing new and innovative solutions to our customers and delivering value to our stakeholders.”