Subsequent Events |
9 Months Ended |
|---|---|
Sep. 30, 2025 | |
| Subsequent Events [Abstract] | |
| Subsequent events | Note 21 — Subsequent events
The Company evaluated subsequent events and transactions that occurred after September 30, 2025 up through April 13, 2026 which is the date of these unaudited condensed consolidated financial statements are available to be issued. Based on this review, except as disclosed below, the Company did not identify any other subsequent events that would require adjustment or disclosure in the unaudited condensed consolidated financial statements.
On October 1, 2025, the Company entered into another securities purchase agreement with 1800 Diagonal Lending LLC (“Diagonal”) pursuant to which the Company sold to Diagonal a convertible promissory note in the aggregate principal amount of $112,800 with an original issue discount of $18,800 and closing expenses of $9,000 deducted from funding amount. The note bears an annual interest charge of 15% and maturity date of June 30, 2026. Only upon an occurrence of an event of default under the note, the holder may convert the outstanding unpaid principal amount of the note into shares of common stock of the Company at a discount of 39% of the market price. On October 8, 2025, the Company filed Certificate of Designations and related amendments with the State of Delaware. Such filing provided for new classes of preferred stock in Series A, Series B, Series C and Series D. The Company is authorized to issue up to 1,000,000 shares of preferred stock. 300 are designated for Series A, 5,000 for Series B, 9,500 for Series C, and 2,000 for Series D.
On October 10, 2025, the Company signed a Securities and Purchase Agreement with GHS Investments LLC (“Investor”) which awarded 50 additional Series A Preferred Shares to the Investor. Such shares are for consideration of the consent to the creation and issuance of Series B and C preferred stock to a real estate holding entity and its agreement to sell its assets to the Company on September 22, 2025 (see Note 7 – Asset acquisition under common control). In addition to the issuance of Series B and C Preferred Shares, the Company issued a convertible promissory note in the amount of $3,000,000. Each Series A Preferred Share has a stated value of $1,200 and par value of $0.0001 per share.
On October 10, 2025, the Company was notified that a lawsuit has been filed in the State of New York by Agrify Corp. The complaint alleges breach of contract in a purchase order of L.E.D. lights. The purchase order originally was part of a termination agreement of a merger agreement. The Company has always stated that the specific L.E.D. products mentioned in the purchase agreement were not in compliance with government requirements and cannot be re-sold. Agrify seeks damages of approximately $481,000 plus fees and costs. The Company is defending the action. Based on consultation with external counsel, an unfavorable outcome is reasonably possible; however, the Company cannot reasonably estimate a loss or range of loss at this time. Accordingly, no accrual has been recorded as of September 30, 2025, and the Company will update this disclosure as additional information becomes available.
On October 28, 2025, the Company filed form PRE 14C with the Securities and Exchange Commission that based on a record date of October 16, 2025, shareholders shall be mailed a vote to approve the adoption of a Reverse Stock Split and Capital Increase Amendment. The range of the Reverse Split is 1:5 to 1:20. The Common Shares authorized shall be increased from 100,000,000 to 1,000,000,000.
On October 20, 2025, the Company received an investment of $250,000 from Huanfu Cui, an Asian-based individual investor, which was followed with another $200,000 tranche on October 31, 2025. The investments are based on the Securities Purchase Agreement signed on October 29, 2025 with the Company. Mr. Cui shall invest up to $500,000 and shall be issued Series F Preferred Shares that have a fixed conversion price of $0.2813. The $450,000 received amounts are the equivalent of 1,599,715 common shares if converted and 1,777,778 if another $50,000 is received by the Company.
On November 6, 2025, GHS Investments LLC converted 46 Series A Preferred Stock, $1,200 each and was issued 690,000 shares of common stock. On December 10, 2025, the Company entered into a securities purchase agreement with Boot Capital LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $58,500 with an original issue discount of $8,500 deducted from funding amount. The note bears an annual interest charge of 13% and matures on September 15, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 35% discount to lowest trading price with a 10 day look back at any time after the sixth monthly anniversary of the convertible note.
On December 26, 2025, the Company entered into a securities purchase agreement with Quick Capital, LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $55,556 with an original issue discount of $5,556 and closing expenses of $4,500 deducted from funding amount. The note bears an annual interest charge of 12% and matures nine months from the issuance date. The principal and accrued interest are convertible into shares of the Company’s common stock at a conversion price equal to a 30% discount to the lowest trading price during the 20 trading days preceding the conversion date. The funding was received in January 2026.
On December 29, 2025, the Company entered into a securities purchase agreement with AES Capital Management LLC, pursuant to which the Company sold a convertible promissory note in the aggregate principal amount of $37,500 with an original issue discount of $3,750 and closing expenses of $1,500 deducted from funding amount. The note bears an annual interest charge of 8% and matures on December 29, 2026. Principal and accrued interest can be converted into shares of common stock of the Company at a 40% discount to lowest trading price with a 15 day look back at any time after the sixth monthly anniversary of the convertible note. The funding was received in January 2026.
On January 29, 2026, Zak Properties entered into a promissory note agreement with American Savings Life Insurance Company (the “Lender”), pursuant to which Zak Properties issued a promissory note in the principal amount of $5,000,000. The note bears interest at an annual rate of 8.50% and requires monthly payments of $35,416.67 commencing on March 1, 2026. The note matures on February 1, 2028, at which time the remaining unpaid principal and accrued interest are due, resulting in a balloon payment. Proceeds from the loan were primarily used to repay existing indebtedness, including the JJ Astor loan of $1,886,000, and the Yan Li loan of $1,046,200 (refer to Note 10 – Loans Payable). In connection with the financing, the Company incurred loan origination and related fees, including a $50,000 origination fee, $5,500 underwriting fee, $50,000 mortgage broker fee, and other closing costs, which are recorded as debt issuance costs and amortized over the term of the loan.
On February 2, 2026, the Company entered into a Settlement and Mutual Release Agreement with Megaphoton, Inc. to resolve previously disclosed litigation pending in the United States District Court for the Central District of California. Pursuant to the agreement, the Company agreed, among other things, to (i) issue 15,000,000 unregistered shares of its common stock and register such shares on a Form S-1 no later than July 31, 2026, (ii) appoint Megaphoton’s chief executive officer to the Company’s board of directors and as President under an employment agreement, (iii) pay $300,000 on or before June 30, 2026, (iv) use best efforts to uplist its common stock within 180 days or issue an additional 15,000,000 shares if such uplisting is not approved, and (v) comply with certain share issuance restrictions. The agreement includes mutual releases of claims without admission of liability.
On February 23, 2026, the Company entered into a note purchase agreement with Lambda Venture Partners, LLC, pursuant to which the Company issued a convertible promissory note in the principal amount of $27,500 for a funded amount of $25,000, reflecting an original issue discount of $2,500. The note bears an annual interest charge of 10% and matures one year after the issue date. Principal and accrued interest can be converted into shares of common stock of the Company at a 39% discount of the lowest trading prices for the proceeding 10 trading days prior to conversion. |