RYTHM Inc (RYM) 2022 Q3 法說會逐字稿

Greetings, and welcome to the Agrify Third Quarter 2020 Earnings Conference Call. At this time, A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anna Kate Hiller. Please go ahead.

您好，歡迎參加 Agrify 2020 年第三季財報電話會議。此時，正式演示之後將進行簡短的問答環節。如果有人在會議期間需要接線員協助，請使用電話鍵盤。提醒一下，本次會議正在錄製中。現在我很高興向大家介紹你們的主持人安娜·凱特·希勒。請繼續。

Good morning, and welcome to Agrify's Third Quarter 2021 Earnings Call. With us on today's call are Raymond Chang, Chief Executive Officer; and Timothy Oakes, 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 remarks, there will be a question-and-answer session. I remind you that today's conference call is being recorded, and a replay will be available on Agrify Investor Relations website at ir.agrify.com.

早安，歡迎參加 Agrify 2021 年第三季財報電話會議。與我們一起參加今天電話會議的是執行長 Raymond Chang；和財務長蒂莫西·奧克斯。今天，管理層將回顧第三季度的亮點和財務業績，並提供業務和營運最新資訊。管理階層發言後，將舉行問答環節。我提醒您，今天的電話會議正在錄音，重播將在 Agrify 投資者關係網站 ir.agrify.com 上提供。

Please note that we will be referring to information that's contained within our earnings press release, which can be accessed on the Investor Relations website as well. Before we begin, we would like to remind everyone that management's remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. Such statements involve a number of known and unknown risks and uncertainties, many of which are outside the company's control that could cause its future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements.

請注意，我們將參考收益新聞稿中包含的訊息，也可以在投資者關係網站上存取該資訊。在開始之前，我們想提醒大家，管理階層的言論包含前瞻性陳述，管理階層可能會針對您的問題做出額外的前瞻性陳述。此類陳述涉及許多已知和未知的風險和不確定性，其中許多風險和不確定性超出了公司的控制範圍，可能導致其未來的結果、業績或成就與此類前瞻性陳述明示或暗示的結果、業績或成就有顯著差異。

Important factors that could cause or contribute to such differences include the risks detailed in our public filings with the Securities and Exchange Commission and those mentioned in the earnings release. Except as required by law, we undertake no obligation to update any forward-looking or other statements therein, whether a result of new information, future events or otherwise. I will now turn it over to Raymond.

可能導致或促成此類差異的重要因素包括我們向美國證券交易委員會提交的公開文件中詳述的風險以及收益報告中提到的風險。除法律要求外，我們不承擔更新其中任何前瞻性或其他陳述的義務，無論是由於新資訊、未來事件或其他原因。我現在將其交給雷蒙德。

Thanks, Anna Kate, and thank you, everyone, for joining us on the call today. I'm going to begin by providing an overview of our performance in Q3 as well as some recent updates on our business and then our Chief Financial Officer, Tim Oakes, is going to discuss our Q3 financial results in greater detail. After that, I will go over our outlook for the remainder of 2022, and then we will open up the call for questions.

謝謝安娜凱特，也謝謝大家今天加入我們的電話會議。我將首先概述我們第三季度的業績以及我們業務的一些最新動態，然後我們的首席財務官蒂姆·奧克斯將更詳細地討論我們第三季度的財務業績。之後，我將回顧我們對 2022 年剩餘時間的展望，然後我們將開始提問。

For the third quarter, we ended up with $7 million in revenue. It is very important that I explain the shortfall in our Q3 revenue in more detail. As we have disclosed publicly, our customer Bud & Mary's defaulted on its construction loan facility, and we served them with a default notice on September 15.

第三季度，我們的營收為 700 萬美元。我更詳細地解釋我們第三季營收的缺口非常重要。正如我們公開披露的那樣，我們的客戶 Bud & Mary's 拖欠了其建築貸款融資，我們於 9 月 15 日向他們發出了違約通知。

In response, Bud & Mary's filed a baseless lawsuit in an attempt to avoid having to repay the credit facility. The lawsuit is entirely without merit, and we are taking all necessary steps to pursue repayment from Bud & Mary's. As a result of the pending lawsuits and based on the ASC 606 revenue recognition standard, we elected not to recognize $5.3 million of design and build revenue related to Bud & Mary's project in Q3.

作為回應，巴德和瑪麗提起了毫無根據的訴訟，試圖避免償還信貸額度。該訴訟完全沒有法律依據，我們正在採取一切必要措施向巴德和瑪麗尋求賠償。由於未決訴訟，並根據 ASC 606 收入確認標準，我們選擇不確認第三季與 Bud & Mary 專案相關的 530 萬美元設計和建造收入。

I want to reiterate that we are confident that we are -- we have the legal rights and means necessary to recover the deferred revenue once the legal process runs its course. Bud & Mary's construction loan is guaranteed by Bud & Mary's Holdings; and David Morgan, Founder and CEO of Bud & Mary's personally. You can be assured that Agrify will continue to take every step necessary to pursue repayments from Bud & Mary's and protect all our shareholders' interests.

我想重申，我們有信心──一旦法律程序結束，我們擁有收回遞延收入所需的合法權利和手段。 Bud & Mary 的建築貸款由 Bud & Mary's Holdings 提供擔保；以及 Bud & Mary's 創辦人兼執行長 David Morgan 本人。您可以放心，Agrify 將繼續採取一切必要措施向 Bud & Mary's 追償並保護我們所有股東的利益。

Our top line, Q3 revenue number was also adversely impacted as a result of the tight quarterly cash spending limits imposed by our institutional lender. In order to stay in full compliance, we were forced to make some difficult decisions, but necessary to ended up inhibiting our ability to maximize revenue in Q3.

由於我們的機構貸款機構實施嚴格的季度現金支出限制，我們的第三季營收數據也受到了不利影響。為了保持完全合規，我們被迫做出一些艱難的決定，但最終會抑制我們在第三季實現收入最大化的能力。

Ideally, we would have liked to convert more of our backlog into revenue. In total, we estimate that the cash spending limit prevented us from realizing approximately $1.8 million in revenue that was otherwise within reach for Q3.

理想情況下，我們希望將更多的積壓訂單轉化為收入。總的來說，我們估計現金支出限制使我們無法實現約 180 萬美元的收入，而這在第三季是可以實現的。

In total, we estimate that there was about $7.1 million of negative impact to our Q3 top line stemming from these 2 factors. Again, $5.3 million defer due to the meritless Bud & Mary's lawsuits and approximately $1.8 million of business pushed up to Q4 due to our cash spending limit.

總的來說，我們估計這兩個因素對我們第三季的營收產生了約 710 萬美元的負面影響。同樣，由於 Bud & Mary 的無理訴訟，530 萬美元的業務被推遲，由於我們的現金支出限制，大約 180 萬美元的業務被推遲到第四季度。

Additionally, some of our customers also encountered some unforeseen construction and permitting delays not related to Agrify, which impacted their ability in Q3 to accept some of the products and solutions that they committed to purchase through Agrify. This had a tangible impact on our Q3 result as well to the tune of approximately $1.3 million, but these orders are all expected to be shipped in Q4.

此外，我們的一些客戶還遇到了一些與 Agrify 無關的不可預見的施工和許可延誤，這影響了他們在第三季度接受他們承諾透過 Agrify 購買的一些產品和解決方案的能力。這對我們第三季的業績也產生了約 130 萬美元的實際影響，但這些訂單預計將在第四季度發貨。

Despite these hindrances, we generated over $11.2 million in new bookings during the third quarter. It is worth noting that starting from this -- from Q3, we have decided not to include the expected recurring revenue streams such as SaaS or production success fee that often spent multiple years but do not commence until our customer facilities are fully permitted and operational.

儘管有這些障礙，我們第三季的新預訂量仍超過 1,120 萬美元。值得注意的是，從第三季開始，我們決定不包括預期的經常性收入流，例如SaaS 或生產成功費，這些收入流通常需要花費數年時間，但直到我們的客戶設施完全獲得許可並投入營運後才會開始。

Moving forward, we will only associate bookings with hardware sales that we expect to fulfill in the near term. For SaaS and production success revenues, we will provide the approximate number of VFUs currently under contract and the duration of each recurring revenue. By doing so, I believe this will give everyone a clearer picture of our near-term revenue potential as well as our more exciting long-term recurring revenue streams.

展望未來，我們只會將預訂與我們預計在短期內完成的硬體銷售聯繫起來。對於 SaaS 和生產成功收入，我們將提供目前合約下的 VFU 的大致數量以及每項經常性收入的持續時間。透過這樣做，我相信這將使每個人都更清楚地了解我們的近期收入潛力以及我們更令人興奮的長期經常性收入流。

Again, the booking for Q3 without the SaaS and production success fees was approximately $11.2 million as these are all hardware sales that we could realize in the near term. The additional bookings on SaaS and production fees ranges between 5 to 10 years with some production revenues attached to it.

同樣，不包括 SaaS 和生產成功費用的第三季預訂約為 1,120 萬美元，因為這些都是我們短期內可以實現的硬體銷售額。 SaaS 的額外預訂和製作費用介於 5 到 10 年之間，並附有一些製作收入。

As the broader business environment continues to be a very challenging one to navigate, we have remained nimble by continuing to adjust our operating approach, adapt to evolving customer needs and develop and deploy technology that is versatile and scalable. We also continue to make progress with our growing product portfolio and are seeing very strong traction with our recent innovations and product offerings.

由於更廣泛的商業環境仍然是一個非常具有挑戰性的環境，我們透過持續調整我們的營運方法、適應不斷變化的客戶需求以及開發和部署多功能和可擴展的技術來保持靈活性。我們也繼續在不斷增長的產品組合方面取得進展，並看到我們最近的創新和產品提供了非常強大的吸引力。

With regard to our operating approach, we have talked in the past about cost reduction and cost efficiency measures we have instituted to promote cash conservation during the industry downturn. To ensure the health of our business, we continue to pursue cost-saving initiatives that will better position our business over the long term to capitalize when the industry returns to growth.

關於我們的營運方法，我們過去曾談到我們在產業低迷時期為促進現金節約而採取的降低成本和成本效率措施。為了確保我們業務的健康發展，我們將繼續採取節省成本的舉措，從長遠來看，這些舉措將使我們的業務更好地定位，以便在行業恢復成長時充分利用。

I want to be clear that many of the cost reduction and cost efficiency initiatives we discussed last quarter have already been implemented and are still in effect, and we are actively evaluating other possibilities as well as we look to protect the company from the turbulence we have encountered in recent months.

我想澄清的是，我們上季度討論的許多成本削減和成本效率舉措已經實施並且仍然有效，我們正在積極評估其他可能性，並希望保護公司免受我們所面臨的動蕩的影響近幾個月遇到的。

Now some of the other developments. We continue to see very strong traction with our rapid deployment program, the RDP. We recently announced 3 new RDP customers in Illinois, Massachusetts and South Africa. The combined agreements for these 3 new customers have an expected base value of $7.5 million in cultivation-related hardware sales. On top, there are also future recurring SaaS and production success fees.

現在是其他一些進展。我們繼續看到我們的快速部署計劃 RDP 具有非常強大的吸引力。我們最近宣佈在伊利諾伊州、馬薩諸塞州和南非新增 3 個 RDP 客戶。這 3 個新客戶的合併協議預計種植相關硬體銷售基值為 750 萬美元。最重要的是，還有未來的經常性 SaaS 和生產成功費用。

As a reminder, the RDP programs was designed to lower the barrier to entry and upfront investment needed for customers to access the best-in-class plug-and-play cultivation and extraction capabilities with an accelerated path to profitability. Using the RDP programs, each customer will have the potential to produce an estimated 7.5 pounds of premium quality flowers per VFU per growth cycle with approximately 5.2% growth cycles expected to be possible each year.

需要提醒的是，RDP 計劃旨在降低客戶獲得一流的即插即用種植和提取能力所需的進入門檻和前期投資，並加速盈利。使用 RDP 計劃，每位客戶將有潛力在每個生長週期的每個 VFU 生產約 7.5 磅的優質花朵，預計每年的生長週期約為 5.2%。

We are excited to see early customer success with the RDPs and look forward to bringing the RDP program to even more customers throughout the world. We intend to start taking orders for a greater volume of RDPs starting in the first quarter of 2023 and also in the upcoming MJBiz. We also look forward to showcasing our latest development and advancement in the RDP programs at MJBiz next week, and we will have more to share on that front in the coming days.

我們很高興看到早期客戶透過 RDP 取得成功，並期待將 RDP 計畫帶給全球更多客戶。我們打算從 2023 年第一季以及即將推出的 MJBiz 開始接受更多 RDP 訂單。我們也期待下週在 MJBiz 上展示我們在 RDP 項目中的最新發展和進步，並且在未來幾天我們將在這方面分享更多內容。

On the extraction side, I am pleased that we recently announced successful commercialization of the PX10 hydrocarbon cannabis extractor that was initially unveiled in August. The PX10 will soon be installed at 3 customer facilities, including at a key customer site in Maryland belonging to Alchemist Ventures. Our progress with the PX10 has demonstrated our ability to not only successfully turn the product vision into reality, but also our capacity to work closely with a growing number of prominent customers, including multistate operators to enable them through our cutting-edge solution to grow their business.

在萃取方面，我很高興我們最近宣布 PX10 碳氫化合物大麻萃取器成功商業化，該萃取器最初於 8 月推出。 PX10 很快就會安裝在 3 個客戶設施中，其中包括 Alchemist Ventures 位於馬裡蘭州的一個重要客戶站點。我們在PX10 方面取得的進展證明了我們不僅有能力成功地將產品願景變為現實，而且還表明我們有能力與越來越多的知名客戶（包括多州運營商）密切合作，使他們能夠通過我們的尖端解決方案來發展他們的業務商業。

I'm also happy to report that the development of our new 3.7 VFU is now complete and we expect to start shipping these units to customers in the first quarter of 2023. Regarding our TTK projects, the Bud & Mary's project is obviously on hold. The other 3 customer sites, True House in Nevada, Greenstone, in Colorado, and Hannah in Washington are all left with some mining, construction and permitting task. We expect that the initial phase of each of these projects will be completed in Q4, at which time the customers are expected to begin to bring in plant materials into their facilities.

我還很高興地報告，我們新的3.7 VFU 的開發現已完成，我們預計將在2023 年第一季度開始將這些設備運送給客戶。 。其他 3 個客戶地點，內華達州的 True House、科羅拉多州的 Greenstone 和華盛頓州的 Hannah 都剩下一些採礦、建造和許可任務。我們預計每個專案的初始階段將於第四季度完成，屆時客戶預計將開始將植物材料引入其設施。

Once the final licenses certification of occupancy are received, which we expect to occur in quarter 1, we will be able to start generating the high-margin recurring SaaS and production revenue shortly thereafter. We still believe that the TTK engagement with our customers across these 3 facilities, which serve as an excellent proof of concept for the underlying business model and the attractive returns of our TTK programs.

一旦收到最終的入住許可證（我們預計將在第一季發生），我們將能夠在不久之後開始產生高利潤的經常性 SaaS 和生產收入。我們仍然相信，TTK 在這 3 個設施中與客戶的互動，為我們的 TTK 計劃的潛在商業模式和有吸引力的回報提供了極好的概念證明。

Last but not least, it was truly an honor for Agrify to be recognized in September when we receive the best cultivation technology during the Green Market Report's Tech Summit. The Green Market Report is one of the prominent sources of financial business and economic news in the cannabis industry and its awards recognized companies in the cannabis industry for the creation of innovative products and services.

最後但並非最不重要的一點是，Agrify 在 9 月獲得認可，在綠色市場報告的技術高峰會上獲得了最佳種植技術，這對 Agrify 來說確實是一種榮幸。綠色市場報告是大麻產業金融業務和經濟新聞的重要來源之一，其獎項表彰了大麻產業創造創新產品和服務的公司。

We are a clear leader in the indoor cultivation space, and we have created Agrify to set a new standard for what is possible. In summary, we remain determined to be highly successful over the long term despite the short-term challenges that we are encountering in recent months. We have conviction in the underlying health of our business for the following reasons.

我們是室內種植領域的明顯領導者，我們創建了 Agrify 來為可能的事物設定新標準。總之，儘管近幾個月來我們遇到了短期挑戰，但從長遠來看，我們仍然決心要取得巨大成功。由於以下原因，我們對我們業務的基本健康狀況充滿信心。

Number 1, interest and enthusiasm in our highly differentiated portfolio of cultivation extraction solutions remain strong. As our pipeline of qualified sales opportunities currently stands at over $31.1 million for cultivation and over $45.9 million for extraction. Our diversified mix of products and services gives us tremendous flexibility to adjust our approach to capitalize on whatever market opportunities are most attractive at any point in time and respond swiftly to challenges that arise in this dynamic operating environment.

第一，人們對我們高度差異化的栽培萃取解決方案組合的興趣和熱情仍然強勁。目前，我們的合格銷售機會管道中用於種植的金額超過 3,110 萬美元，用於提取的金額超過 4,590 萬美元。我們多元化的產品和服務組合使我們能夠靈活地調整我們的方法，以利用任何時間點最具吸引力的市場機會，並迅速應對這個動態營運環境中出現的挑戰。

3, and probably the most exciting, our products have strong global appeal. And given that quality control is absolutely imperative, especially in the [EUs] because of the incredibly high [EUGMP] standards, we are very confident that our offerings will become highly adopted throughout the European market, which is eventually expected to become one of the world's largest market for legal cannabis.

3、也許最令人興奮的是，我們的產品具有強大的全球吸引力。鑑於品質控制絕對必要，特別是在[歐盟]，因為 [EUGMP] 標準非常高，我們非常有信心我們的產品將在整個歐洲市場廣泛採用，最終預計將成為歐洲市場之一世界上最大的合法大麻市場。

Overall, we're getting substantial interest in our cultivation extraction solution from a wide variety of international customers. At this point, I would like to turn the call over to Tim to talk about the financial results for the quarter.

整體而言，我們的培養提取解決方案引起了許多國際客戶的濃厚興趣。此時，我想將電話轉給提姆，討論本季的財務表現。

Thank you, Raymond. Good morning, everyone, and thank you for once again joining us on today's earnings call. As we've done in prior quarters, I'll take some time to speak to our third quarter 2022 financial results, and then I'll pass the call back to Raymond for closing remarks. Like last quarter, there's a lot to digest with respect to our third quarter financial performance. So it is going to take some time or some extra time to go through everything.

謝謝你，雷蒙德。大家早安，感謝您再次加入我們今天的財報電話會議。正如我們在前幾個季度所做的那樣，我將花一些時間談談我們的 2022 年第三季財務業績，然後我會將電話轉回雷蒙德以供結束語。與上季一樣，我們第三季的財務表現有很多需要消化的地方。因此，需要一些時間或額外的時間來完成所有事情。

Starting with revenue. Revenue in the third quarter of 2022 totaled $7 million compared to revenue of $15.8 million in the third quarter of 2021. This represents an $8.8 million or 55.4% year-over-year decrease in comparative quarterly revenue. The decrease in third quarter 2022 revenue is solely related to a comparative year-over-year decline in our lower-margin design and build revenue.

從收入開始。 2022 年第三季的營收總計 700 萬美元，而 2021 年第三季的營收為 1,580 萬美元。 2022 年第三季營收的下降僅與我們利潤率較低的設計和建造收入同比下降有關。

Design and build revenue declined by $11.7 million in the comparative quarterly periods from $13 million in the third quarter of 2021 to $1.3 million in the third quarter of 2022. It is important to note that third quarter 2022 design and build revenue excludes approximately $5.3 million of revenue associated with our TTK solution project with Bud & Mary's. This revenue has been deferred as a direct result of Bud & Mary's lawsuit, which challenges our ability to recognize the revenue on the work performed during the quarter as collectability of the amount becomes uncertain.

設計和建造收入在比較季度期間下降了1,170 萬美元，從2021 年第三季的1,300 萬美元下降到2022 年第三季的130 萬美元。收入不包括約530 萬美元與我們與 Bud & Mary's 合作的 TTK 解決方案專案相關的收入。由於巴德和瑪麗訴訟的直接結果，該收入已被推遲，這對我們確認本季所完成工作的收入的能力提出了挑戰，因為金額的可收回性變得不確定。

And as Raymond mentioned in his script earlier, despite the accounting position taken by the company during the current quarter, the company intends to vigorously defend itself against the claims made by Bud & Mary's in its lawsuit and believes that it has the documented support to prevail in this matter and the legal recourse necessary to recover the outstanding amounts due to the company and its stockholders in this matter.

正如雷蒙德早些時候在劇本中提到的那樣，儘管該公司在本季度採取了會計立場，但該公司打算針對巴德與瑪麗在訴訟中提出的主張積極為自己辯護，並相信它擁有有據可查的證據支持勝訴在此事件中，以及為收回該事件中公司及其股東的未付款項所需的法律追索權。

The company recognized approximately $5.7 million in extraction-related revenue during the third quarter. No extraction-related revenue was recorded by the company in the third quarter of 2021 as the company had not entered that vertical yet. It is worthwhile to note that the amount of extraction revenue during the third quarter was negatively impacted as a result of the company's debt modification agreement, under which the company was unable to ship approximately $1.8 million of extraction equipment due to the quarterly cash spend limits imposed under the restructured debt agreement.

該公司第三季確認了約 570 萬美元的與開採相關的收入。由於該公司尚未進入該垂直領域，因此該公司在 2021 年第三季沒有記錄與開採相關的收入。值得注意的是，第三季的開採收入受到了公司債務修改協議的負面影響，根據該協議，由於季度現金支出限制，公司無法運送約 180 萬美元的開採設備根據重組債務協議。

Bookings for the third quarter of 2022 were approximately $11.2 million, of which $5.6 million was related to extraction products. We enter the fourth quarter of fiscal 2022 with approximately $646 million in backlog. A significant portion of our reported backlog amount is derived from future TTK related recurring revenue streams, which are associated with both our SaaS and production success fees and account for approximately 90% of the total backlog amount.

2022 年第三季的預訂量約為 1,120 萬美元，其中 560 萬美元與提取產品相關。進入 2022 財年第四季度，我們的積壓訂單約為 6.46 億美元。我們報告的積壓金額的很大一部分來自未來 TTK 相關的經常性收入流，這些收入流與我們的 SaaS 和生產成功費用相關，約佔積壓總額的 90%。

It is important to note that our current backlog is materially reduced from the reported backlog amount during our second quarter earnings call. The sole driver of this reduction is the removal of forward-looking recurring SaaS and production fee revenue amounts due to our issuance of the default notice to Bud & Mary's and their subsequently filed lawsuit.

值得注意的是，我們目前的積壓訂單數量比第二季財報電話會議期間所報告的積壓數量大幅減少。這項減少的唯一驅動因素是由於我們向 Bud & Mary's 發出違約通知以及他們隨後提起訴訟而取消了前瞻性經常性 SaaS 和製作費收入金額。

Total gross loss and the associated negative gross profit margin in the third quarter of 2022 was a negative $4.1 million or roughly 58.6% of total revenue compared to a gross loss of $380,000 or 2.4% of total revenue in the third quarter of 2021. The comparative change in year-over-year third quarter gross loss and gross margin primarily reflects the deferral of the previously discussed $5.3 million in third quarter 2022 design and build revenue, offset by the incremental gross profit and gross profit margin contributions from our extraction-related product sales.

2022 年第三季的總毛虧損和相關的負毛利率為負410 萬美元，約佔總收入的58.6%，而2021 年第三季的毛虧損為38 萬美元，約佔總收入的2.4% 。抵銷銷售量。

Extraction-related revenues achieved a gross profit margin of approximately 27% in the third quarter of 2022. The company was not able to defer the construction costs with the deferred design and build revenue during the third quarter of 2022, which significantly impacted the company's overall gross profit and gross margin performance during the third quarter.

2022年第三季度，與採礦相關的收入實現了約27%的毛利率。第三季毛利和毛利率表現。

Moving on to operating expenses. Third quarter 2022 general and administrative expenses increased by $16.4 million or 213% to $24.1 million compared to $7.7 million in the third quarter of 2021. The comparative increase in G&A expenses in 2022 is largely attributable to a $15 million increase in bad debt reserves, primarily associated with our decision to place a full reserve against all of the outstanding receivable balances under the Bud & Mary's TTK solution project. Approximately $1.1 million in severance related charges as the company has begun to streamline operations in response to the current industry headwinds and a comparative $500,000 increase in quarterly stock-based compensation as a result of equity awards issued to employees during the third quarter of 2022.

接下來是營運費用。 2022 年第三季一般及行政費用增加1,640 萬美元，達到2,410 萬美元，較2021 年第三季的770 萬美元增加。美元，主要是由於這與我們決定對 Bud & Mary 的 TTK 解決方案項目下的所有未清應收帳款餘額設定全額準備金有關。由於公司已開始精簡營運以應對當前的行業逆風，因此與遣散費相關的費用約為 110 萬美元，並且由於 2022 年第三季度向員工發放股權獎勵，季度股票薪酬相對增加了 50 萬美元。

Sales and marketing expenses totaled $2.2 million in the third quarter of 2022 compared to $890,000 in the third quarter of 2021. Consistent with prior quarters, the comparative increase in third quarter 2022 sales and marketing expenses is directly related to the company increasing the scale of its business while strategically focusing on investments in sales and marketing activities, such as headcount trade shows, marketing programs, et cetera, necessary to support our drive for top line revenue growth.

2022 年第三季銷售和行銷費用總計220 萬美元，而2021 年第三季為89 萬美元。相關。

Research and development expenses in the third quarter of 2022 totaled $1.7 million compared to $827,000 in the third quarter of 2021. The increase in comparative quarterly research and development expense reflects the company's continued development efforts focused upon improving and upgrading our Agrify Insight SaaS software as well as the hardware features and functionality of our vertical farming units.

2022 年第三季的研發費用總計 170 萬美元，而 2021 年第三季的研發費用為 827,000 美元。垂直農業單元的硬體特性和功能。

Comparative third quarter 2022 increases in R&D expenses are related to the current quarter addition of extraction division R&D teams, third-party consulting, payroll and related expenses as well as material costs. The company as of September 30, 2022, is currently monitoring 2 separate contingent earnout consideration arrangements associated with the acquisitions of PurePressure and Lab Society.

2022 年第三季研發費用的比較成長與本季提取部門研發團隊、第三方諮詢、工資和相關費用以及材料成本的增加有關。截至 2022 年 9 月 30 日，該公司目前正在監控與收購 PurePressure 和 Lab Society 相關的 2 項單獨的或有報酬對價安排。

Each of the arrangements contains 2 consecutive 12-month earn-out periods. The potential additional consideration that can be earned under each of the 2 earnouts is capped at $1.5 million per year under the PurePressure earnout arrangement and $1.75 million per year under the lab Society earn-out arrangement.

每個安排都包含 2 個連續的 12 個月的獲利期。根據 PurePressure 獲利安排，這 2 項獲利安排中每一項可賺取的潛在額外對價上限為每年 150 萬美元，根據實驗室協會獲利安排，每年上限為 175 萬美元。

The company made initial estimates with respect to the probability of achievement of the additional consideration to be earned under each respective earn-out period and recorded it as part of our initial purchase price accounting associated with each acquisition. Operating expenses in the third quarter of 2022 also includes a $602,000 reduction in operating expenses, which is primarily attributable to the change in our fair value estimates of contingent consideration associated with the currently active PurePressure earnout.

該公司對在每個盈利期內賺取額外對價的可能性進行了初步估計，並將其記錄為與每次收購相關的初始購買價格會計的一部分。 2022 年第三季的營運費用還包括營運費用減少 602,000 美元，這主要是由於我們對與當前活躍的 PurePressure 盈利相關的或有對價的公允價值估計發生了變化。

During our periodic review of fair value estimates, we noted that PurePressure's actual revenue performance related to its first earn-out period trails our initially projected revenue estimates. Accordingly, we revised our estimated probabilities of earnout achievement, which resulted in a reduction in the original estimated earnout achievement of approximately $602,000.

在我們對公允價值估計的定期審查中，我們注意到 PurePressure 與其第一個盈利期相關的實際收入表現落後於我們最初預測的收入估計。因此，我們修改了預期的獲利實現機率，這導致最初的預期獲利實現減少了約 602,000 美元。

This change in consideration, as required by GAAP, was recorded as a current period reduction to operating expenses. We will continue to evaluate on a routine periodic basis, future performance against our initial assumptions and estimates on a quarterly basis. Any identified changes to our original assumptions that generate a change in our initial fair value estimates of probable earnout achievement will result in either an increase or reduction to our future periodic operating expenses.

根據公認會計準則的要求，對價的這項變更被記錄為當期營運費用的減少。我們將繼續定期根據我們的初始假設和季度估計來評估未來業績。我們最初假設的任何確定的變化都會導致我們對可能實現的利潤的初始公允價值估計發生變化，這將導致我們未來定期營運費用的增加或減少。

Moving on to other income and expenses. The company is reporting total other expense of $14.7 million in the third quarter of 2022. This compares to other income of $30,000 in the year ago quarter. There are several items during the year-over-year change in other income as we try to break them down into digestible sections. Starting with net interest expense.

繼續討論其他收入和支出。該公司報告 2022 年第三季的其他支出總額為 1,470 萬美元。其他收入的同比變化中有幾個項目，我們試圖將它們分解為可消化的部分。從淨利息支出開始。

Net interest expense totaled $4 million during the third quarter of 2022. Our third quarter interest expense is comprised of both normal interest expense associated with the outstanding principal balance of our existing debt facility, plus an incremental prepayment penalty of interest expense of $2.2 million, which was incurred in connection with the modification of our debt facility in the third quarter of 2022.

2022 年第三季的淨利息支出總計400 萬美元。罰金利息支出，其中是由於 2022 年第三季我們的債務融資修改而產生的。

Other income. The company is reporting $1.5 million of other income during the current quarter in connection with the finalization and true-up of previously estimated acquisition-related net working capital amounts. The finalization of the estimated amounts resulted in a favorable adjustment to the initial purchase price paid by the company at the close of our acquisitions.

其他收入。該公司報告本季其他收入為 150 萬美元，與先前估計的收購相關淨營運資本金額的最終確定和調整有關。估計金額的最終確定導致對公司在收購結束時支付的初始購買價格進行了有利的調整。

As we fully impaired our goodwill assets as of June 30, 2022, these adjustments cannot be recorded against the existing goodwill balance, which results in them being recorded as a favorable other income item in our third quarter statement of operations. We are reporting a loss on extinguishment of debt. As previously mentioned, in August 2022, the company entered into an agreement to restructure its March 2022 debt facility with its institutional lender.

由於截至 2022 年 6 月 30 日我們的商譽資產已完全減值，因此這些調整無法根據現有商譽餘額記錄，這導致它們在我們第三季營運報表中記錄為有利的其他收入項目。我們正在報告債務清償損失。如前所述，2022 年 8 月，該公司與其機構貸款人簽訂了重組 2022 年 3 月債務融資的協議。

The company reviewed the terms of the modification and determined that the modification resulted in an extinguishment of the existing debt arrangement and not a modification. The company recognized a loss on debt extinguishment of approximately $17.9 million during the third quarter of 2022. This loss was comprised of a write-off of unamortized warrant costs, unamortized issuance costs, default penalty charges and incremental charges associated with the fair value of the modified warrants.

公司審查了修改條款，並確定修改導致現有債務安排的消滅，而不是修改。該公司在2022 年第三季確認了約1,790 萬美元的債務清償損失。費用。

We are also reporting a change in the fair value of warrants. As part of the debt restructuring agreement, the company agreed to modify the strike price of the warrants issued under the original debt facility as well as to issue new warrants under the new facility. The company in its review of the accounting treatment to be applied to the new and existing warrants determined that the warrants qualified for treatment as a liability instrument as opposed to being treated as an equity instrument.

我們也報告認股權證公允價值的變動。作為債務重組協議的一部分，該公司同意修改根據原始債務融資發行的認股權證的執行價格，並根據新融資發行新的認股權證。該公司在審查適用於新的和現有認股權證的會計處理時確定，認股權證符合負債工具處理的條件，而不是權益工具處理的條件。

The company recognized a favorable charge in its third quarter 2022 statement of operations in connection with the periodic fair market value revaluation of the warrants totaling $5.7 million. It is important to note that the company will continue to perform a review of the changes in the fair value of the warrants on a periodic basis, which will result in future gains and/or losses in its statement of operations.

該公司在 2022 年第三季營運報表中確認了與認股權證定期公平市價重估相關的有利費用，總額為 570 萬美元。值得注意的是，本公司將繼續定期審查認股權證公允價值的變化，這將導致其經營報表中的未來收益和/或損失。

A quick comment on income taxes. The company didn't recognize any income tax expense or benefit in the third quarter of '22 for 2021. This is solely the result of the company having a full valuation allowance against the carrying value of its deferred tax attributes. We consolidate the results of operations of less than wholly owned entities into our consolidated results of operations, Agrify-Valiant LLC, a joint venture limited liability company, in which we are the 60% majority owner and Valiant America LLC owns the remaining 40%. The net income or loss in each of the presented quarterly periods ended September 30, 2022 and 2021 represents the portion of periodic income or loss attributable to the noncontrolling parties.

對所得稅的快速評論。該公司在 2021 年第三季沒有確認任何所得稅費用或福利。我們將非全資實體的營運績效合併到我們的綜合營運績效中，Agrify-Valiant LLC 是一家合資有限責任公司，我們擁有該公司 60% 的多數股權，Valiant America LLC 擁有剩餘的 40% 股權。截至2022年9月30日及2021年9月30日的每季的淨收入或虧損代表非控股方應佔的定期收入或虧損的部分。

Finally, the net results of the previously discussed changes in revenue, gross margin and operating expenses resulted in a reported net loss of $46.3 million or $17.33 per diluted share during the third quarter of 2022 compared to a loss of $9.8 million or $4.68 per diluted share in the year ago quarter.

最後，前面討論的收入、毛利率和營運費用變化的淨結果導致2022 年第三季報告的淨虧損為4,630 萬美元，即稀釋後每股17.33 美元，而同期虧損為980 萬美元，即稀釋後每股4.68 美元去年同期。

It is also important to note that the company, with stockholder approval, completed a 1 for 10 reverse stock split on October 18, 2022. Accordingly, the company has retroactively adjusted all current period and historical equity and share-based information included in our third quarter 2022 financial statements and disclosures to reflect this 1 for 10 reverse stock flip.

還需要注意的是，經股東批准，公司於2022 年10 月18 日完成了1 換10 的反向股票分割。股份資訊。

Adjusted EBITDA amounted to a loss of $28.8 million during the third quarter of 2022 compared to an adjusted EBITDA loss of $5.6 million in the year ago quarter. Additional information regarding our use of non-GAAP measures, including a reconciliation to the most comparable GAAP measures can be found in the press release we issued earlier this morning, which is also available on the Investor Relations section of our website at www.agrify.com.

2022 年第三季調整後 EBITDA 虧損 2,880 萬美元，而去年同期調整後 EBITDA 虧損 560 萬美元。有關我們使用非GAAP 衡量標準的更多信息，包括與最具可比性的GAAP 衡量標準的調節，請參閱我們今天上午早些時候發布的新聞稿，該新聞稿也可在我們網站www.agrify 的投資人關係部分找到。

Finally, a few quick comments on some other financial items. We ended the third quarter of 2022 with the combined amount of cash, restricted cash and marketable securities of $12.5 million compared to a balance of $56.6 million as of December 31, 2021.

最後，對其他一些金融項目進行一些簡短的評論。截至 2022 年第三季末，我們的現金、限制性現金和有價證券總額為 1,250 萬美元，而截至 2021 年 12 月 31 日的餘額為 5,660 萬美元。

Subsequent to the end of the third quarter of 2022, the company began issuing shares of its common stock under a previously announced at-the-market equity program. As of November 7, 2022, the company has sold a total of 6,132,565 shares of common stock under the ATM program for aggregate gross proceeds of approximately $15.6 million and net proceeds after deducting commissions of approximately $15.1 million.

2022 年第三季末後，該公司開始根據先前宣布的市場股權計劃發行普通股。截至2022年11月7日，該公司已根據ATM計畫出售了總計6,132,565股普通股，總收益約為1,560萬美元，扣除佣金後的淨收益約為1,510萬美元。

As of November 7, 2022, the company had $34.4 million of remaining availability for future issuances of common stock under the ATM program. As of September 30, 2022, the company is in compliance with the financial debt covenants associated with its restructured $35 million senior secured promissory note. That concludes the prepared financial comments. And with that, I will now turn the call back to Raymond for final comments.

截至 2022 年 11 月 7 日，該公司還有 3,440 萬美元的剩餘資金可供未來根據 ATM 計畫發行普通股。截至 2022 年 9 月 30 日，該公司遵守與其重組後的 3,500 萬美元優先擔保本票相關的金融債務契約。準備好的財務評論到此結束。現在，我將把電話轉回雷蒙德以徵求最終意見。

Thank you, Tim. I would now like to turn to our guidance for the remainder of fiscal year 2022. Since we are deferring the $5.3 million of Bud & Mary's revenue for the reasons stated above, we are reducing our guidance down to $65 million to $70 million versus the original guidance of $70 million to $75 million.

謝謝你，提姆。我現在想談談我們對2022 財年剩餘時間的指導。美元。

In other words, if it wasn't for the $5.3 million deferred revenue, we would have been on track to deliver our previously guided forecast. I would now like to open up the call to questions. Operator, please go ahead.

換句話說，如果沒有 530 萬美元的遞延收入，我們本來可以實現先前的指導預測。我現在想開始提問。接線員，請繼續。

(Operator Instructions) Our first question is from Aaron Grey of Alliance Global Partners.

（操作員說明）我們的第一個問題來自 Alliance Global Partners 的 Aaron Gray。

This is Remington Smith on for Aaron Grey. You touched on this kind of a little bit in your opening remarks. But is there any kind of more market share or retail sales data in the markets where partners are selling products (inaudible) within VFUs and those legacy states. Just wanted to get a little bit more color on that for the data point to demonstrate flowing to retail sales.

這是亞倫·格雷的雷明頓·史密斯。您在開場白中談到了這一點。但是，合作夥伴在 VFU 和那些遺留狀態中銷售產品（聽不清楚）的市場中是否有更多的市場份額或零售銷售數據。只是想為數據點提供更多顏色，以展示其流向零售銷售。

Yes. So our customers in Nevada, White Cloud has continued to sell through their dispensaries. They had to do a restart because of some licensing issue, but they're basically coming back on track. And so far, the flowers that they have been able to sell through the retail have been deemed as very high quality, and they continue to produce, the yields continue to go up, and we expect that once the restarts come to fruition, they will be able to again sell at a very high premium in the Nevada market.

是的。因此，我們在內華達州的客戶 White Cloud 繼續透過他們的藥房進行銷售。由於一些許可問題，他們不得不重新啟動，但他們基本上回到了正軌。到目前為止，他們能夠透過零售銷售的鮮花被認為是非常高品質的，並且他們還在繼續生產，產量繼續上升，我們預計一旦重啟取得成果，他們將能夠再次在內華達州市場以非常高的溢價出售。

And then my second question regarding the extraction business. You have a strong line of sight in terms of the pipeline, particularly as we are seeing a number of operators pull back on CapEx. Are there any other factors to think about outside the macro with the impact in the extraction business, which is competing products and pricing.

然後是我關於開採業務的第二個問題。您對通路有很強的洞察力，特別是當我們看到許多業者縮減資本支出時。宏觀之外是否還有其他因素需要考慮對提取業務的影響，即競爭產品和定價。

We still continue to see very strong pipeline as well as momentum behind our extraction business. As mentioned earlier, the pipeline for our extraction business stands at over $40-plus million. And we're seeing a very, very strong rebound in the fourth quarter in our extraction division. And as mentioned also in Q3, unfortunately, because of the tight cash covenants and also some customer, what do you call it, delays on the completion of the facility construction, roughly about $3 million of business was kind of pushed into Q4, which we expect to ship this quarter.

我們仍然看到非常強大的管道以及我們的開採業務背後的動力。如前所述，我們的開採業務管道價值超過 40 多萬美元。我們看到我們的提取部門在第四季度出現了非常非常強勁的反彈。正如第三季度所提到的，不幸的是，由於現金契約緊張，而且一些客戶，你怎麼稱呼它，設施建設的完成延遲，大約 300 萬美元的業務被推到了第四季度，我們預計本季度發貨。

So yes, so we're continuing to see very strong momentum behind -- positive momentum behind our extraction division, definitely a rebound from quarter 3. And as I also mentioned earlier, we continue to innovate with new products, like the launch of the PX10.It's one, and we will be also introducing additional new products in the upcoming MJBiz as well.

所以，是的，我們繼續看到非常強勁的勢頭——我們的提取部門背後的積極勢頭，絕對是第三季度的反彈。 。

Our next question is from Eric Des Lauriers of Craig-Hallum.

我們的下一個問題來自 Craig-Hallum 的 Eric Des Lauriers。

I was wondering if you could comment a bit on the extraction businesses, the overall sort of demand that you're seeing for those products? And then if the sort of taking those extraction products and really implementing the control and visibility into those and essentially creating a similar like TTK type offering for extraction. Just wondering if that is still on the sort of near-term strategy list here and just overall comments about the extraction business would be great.

我想知道您是否可以對提取業務以及您對這些產品的整體需求發表一些評論？然後，如果採取這些提取產品並真正實施對這些產品的控制和可見性，並本質上創建類似的 TTK 類型的提取產品。只是想知道這是否仍在此處的近期戰略列表中，並且對開採業務的總體評論會很棒。

Yes. Eric, we're definitely seeing a rebound of the momentum, like I said, for quarter 4. I think what's happening now is, yes, obviously, due to the macro market condition. In quarter 3, there were some holdback on the spending. But I think we're seeing a reversal of that trend even starting from October time frame.

是的。艾瑞克，正如我所說，第四季度我們肯定會看到勢頭反彈。第三季度，支出出現了一些抑制。但我認為，即使從 10 月開始，我們也看到了這一趨勢的逆轉。

And like I said, I think this quarter, we're seeing a very, very positive reversal of that trend. What is also actually very encouraging for us is that our parts and parts sales and also ecommerce are recording public some of the strongest numbers that we have seen. I think what's happening now is probably some people are just kind of instead of maybe making new purchases were trying to basically retrofit some of their existing products.

正如我所說，我認為本季度，我們看到了這一趨勢的非常非常積極的逆轉。實際上對我們來說非常令人鼓舞的是，我們的零件銷售以及電子商務正在公開記錄我們所見過的最強勁的數字。我認為現在發生的事情可能是有些人只是試圖從根本上改造他們現有的一些產品，而不是購買新產品。

And so we're seeing a very, very strong parts in ecommerce sales out of our extraction division. And we also are seeing adoption of our new technology. As I mentioned, we launched PX10, the latest technology innovation on the hydrocarbon side. And already, we have 3 customers using this solution. And we're also seeing very, very strong interest towards some of the other new product innovations that we're introducing into the market.

因此，我們看到我們的提取部門在電子商務銷售方面非常非常強勁。我們也看到我們的新技術被採用。正如我所提到的，我們推出了 PX10，這是碳氫化合物的最新技術創新。目前，我們已經有 3 位客戶在使用解決方案。我們也看到人們對我們引入市場的其他一些新產品創新非常非常濃厚的興趣。

As to basically the consistency and quality issue that you mentioned, absolutely, that is something that we continue to work on. And in fact, the RDP program that we are rolling out as of today actually gives customers the option to basically buy an equivalent solution beyond just cultivation.

至於您提到的一致性和品質問題，絕對是我們繼續努力解決的問題。事實上，我們今天推出的 RDP 計劃實際上為客戶提供了基本上購買等效解決方案的選擇，而不僅僅是種植。

So they could actually buy complementary extraction total turnkey solution that for example, they purchased 56 VFUs, then we would basically do some calculation with them and depending on the type of products that they want to produce, we would then design an extraction lab that provides them with a complete solution so that they could actually offer more products into the market.

因此，他們實際上可以購買補充提取整體交鑰匙解決方案，例如，他們購買了56 個VFU，然後我們基本上會對他們進行一些計算，然後根據他們想要生產的產品類型，我們將設計一個提取實驗室，提供為他們提供完整的解決方案，以便他們實際上可以向市場提供更多產品。

And I think that combination of cultivation and extraction are becoming extremely, extremely attractive. And in fact, a lot of the RDP programs, the customers are actually adopting or subscribing to this additional optional upgrades to take on both the extraction as well as the cultivation solutions.

我認為種植和提取的結合正變得非常非常有吸引力。事實上，在許多 RDP 計劃中，客戶實際上正在採用或訂閱這種額外的可選升級，以承擔提取和培養解決方案。

We are not yet ready to basically launch the TTK around extraction yet. Most of the RDP programs that we're selling right now is still basically based on basically just upfront cash sales. We still need to do a bit of work to be able to turn the existing extraction equipment to be able to control remotely through cloud. And once that is completed, then we would be able to offer the TTK program because, as you know, very much similar to kind of the VFUs, we want to be able to remotely control as well as monitor the performance of the extraction equipment before we offer the TTK program. And that's something that we continue to work on.

我們還沒有準備好圍繞提取基本上啟動 TTK。我們現在銷售的大多數 RDP 計劃仍然基本上是基於預付現金銷售。我們還需要做一些工作才能將現有的提取設備轉變為能夠透過雲端進行遠端控制。一旦完成，我們就能夠提供 TTK 程序，因為如您所知，與 VFU 非常相似，我們希望能夠在之前遠端控制和監控提取設備的性能我們提供 TTK 計劃。這就是我們繼續努力的事情。

Our next question is from Anthony Vendetti of Maxim Group.

我們的下一個問題來自 Maxim Group 的 Anthony Vendetti。

Just wanted to go over a couple of the numbers. Did you say the qualified pipeline has about $31.1 million in cultivation and $45.9 million in extraction.

只是想看幾個數字。您是否說過合格的管道有約 3110 萬美元的種植費用和 4590 萬美元的開採費用。

That's correct. 31.1% and 45.9%.

這是正確的。 31.1%和45.9%。

And usually or sometimes you give a backlog number, which are the signed contracts. What was the backlog number at the end of the third quarter?

通常或有時您會給出積壓訂單編號，即已簽署的合約。第三季末的積壓數量是多少？

Tim, can you -- you have the most accurate number? Can you provide that, please?

提姆，你能──你有最準確的數字嗎？請問你能提供一下嗎？

Yes. Anthony, we actually did -- I gave that number as part of my script. So the backlog number as reported in my script, was $646,000 as of the end of the third quarter. Obviously, the majority of that being SaaS related fees and production base fees, and that amount of that backlog number, that represents about 90% of the total backlog number. $646 million.

是的。安東尼，我們確實做到了——我在劇本中給出了這個數字。因此，截至第三季末，我的腳本中報告的積壓數量為 646,000 美元。顯然，其中大部分是 SaaS 相關費用和生產基礎費用，以及積壓訂單數量，約佔積壓訂單總數的 90%。 6.46 億美元。

And typically, just remind us, Tim, that's over a 10-year period, typically, how that gets recognized?

提姆，通常情況下，請提醒我們，這通常是 10 多年的時間，如何被認可？

Yes. The SaaS and production fees are predominantly over a 10-year period based upon the initial TTK engagement. As we look at things like Raymond talked about, the RDP program, while those are a point-in-time equipment sale, they also do come with some limited period SaaS and production fee revenue. So that would be on a shorter string or a shorter time line, but the majority of that SaaS and production is spread over 10 years.

是的。 SaaS 和製作費用主要基於最初的 TTK 參與度，超過 10 年。當我們看看 Raymond 談到的 RDP 計畫時，雖然這些是時間點設備銷售，但它們也確實帶來了一些有限期限的 SaaS 和生產費收入。因此，這將是一個更短的字串或更短的時間線，但大部分 SaaS 和生產都分佈在 10 年以上。

And then with the Bud & Mary's lawsuit, can you talk about where that's currently at? And I know you probably don't have an exact time line of how this is expected to roll out because these things could take sometimes years but have you had any settlement talks with them? Can you maybe just give us an update on where you are with them.

然後，關於巴德和瑪麗的訴訟，您能談談目前的情況嗎？我知道您可能沒有具體的時間表，因為這些事情有時可能需要數年時間，但您是否與他們進行和解談判？您能否向我們介紹一下您與他們的最新情況？

Anthony, as much as I would love to. I don't think we are allowed to basically get into the details while the legal is underway. But what I can tell you is that we are very, very confident that we will be able to recover 100% of basically everything that we invested into this project. And we have both the resources as well as the legal means to go after this.

安東尼，正如我所願。我認為在法律正在進行時我們基本上不被允許深入了解細節。但我可以告訴你的是，我們非常非常有信心能夠 100% 收回我們對該項目的投資。我們擁有資源和法律手段來解決這個問題。

And as I mentioned earlier also that the project does come with both the corporate as well as personal guarantee from David Morgan, the Founder and CEO of Bud & Mary's. Unfortunately, while the pending lawsuit is still ongoing, I basically was advised that we're not allowed to discuss too much of it, but it is moving in the right direction, and we have all the resources as well as the legal means to recover.

正如我之前提到的，該專案確實得到了 Bud & Mary's 創始人兼執行長 David Morgan 的公司和個人擔保。不幸的是，雖然懸而未決的訴訟仍在進行中，但我基本上被告知我們不允許討論太多，但它正在朝著正確的方向發展，我們擁有所有資源以及法律手段來恢復。

So David Morgan, the founder of Bud & Mary's. So it's not just the commercial assets, but his personal assets that were part of the agreement and you have the right in the contract to recover lost revenue or revenue that is due under that contract through Bud & Mary's as well as his personal assets.

巴德與瑪麗的創始人大衛摩根就是這樣。因此，協議中不僅包括商業資產，還包括他的個人資產，並且您有權在合約中透過 Bud & Mary 以及他的個人資產追回損失的收入或根據該合約應得的收入。

That is correct. So the corporate guarantees, we have both the corporate as well as personal guarantees. On the corporate side, they own the dispensary license, they have a home delivery license as well as 2 multiple cultivation licenses and product manufacturing license. And as I mentioned earlier, this is actually guaranteed by not only corporate but David Morgan, the founder's CEO personally.

這是正確的。因此，公司擔保，我們既有公司擔保，也有個人擔保。在企業方面，他們擁有藥房許可證、送貨上門許可證以及2個多種種植許可證和產品生產許可證。正如我之前提到的，這實際上不僅由公司保證，而且由創始人執行長大衛摩根個人保證。

In terms of new business, in terms of building a pipeline, how has this lawsuit impacted future business? Is it taking a little bit longer to close new business as maybe customers are wondering what the issues are? Or have you seen a change at this point?

在新業務方面，在管道建設方面，這起訴訟對未來的業務有何影響？關閉新業務是否需要更長的時間，因為客戶可能想知道問題是什麼？或者此時你看到變化了嗎？

So Anthony, I think as we have kind of emphasized, given the kind of change in the market conditions, we have decided to not invest further into the TTK projects or future TTK projects at this moment. Obviously, the ones that we are committed to, every single one of them, we have the resources to basically bring them to fruition, right? And that's basically the 3 that I talked about earlier, we have resources dedicated for Bud & Mary's and also we have other TTK projects such as Gold Leaf that we have allocated VFU equipment towards.

所以安東尼，我認為正如我們所強調的那樣，考慮到市場條件的變化，我們決定目前不再進一步投資 TTK 專案或未來的 TTK 專案。顯然，我們致力於的每一項，我們都有資源基本上使它們實現，對嗎？這基本上就是我之前談到的 3 個項目，我們有專門用於 Bud & Mary 的資源，而且我們還有其他 TTK 項目，例如 Gold Leaf，我們已為其分配了 VFU 設備。

So all those projects, we are fully committed to basically bringing to fruition. Now simultaneously, what is really picking up steam is the rapid deployment program, right? In the past, TTK, as you know, it's basically in large long-term investments that require substantial capital outlay from the company upfront. And given kind of the market condition today, I don't believe that the market no longer has that sort of appetite.

因此，所有這些項目，我們都完全致力於基本實現。現在，真正正在加速的是快速部署計劃，對嗎？如您所知，過去，TTK 基本上是大型長期投資，需要公司預先投入大量資本。考慮到今天的市場狀況，我不認為市場不再有這種胃口。

The RDP program is really what is selling out there. People can get started with $2 million to $3 million investment. And in fact, they can just start it with even less capital. They could just basically purchase 8 of our VFUs and they would have sufficient biomass to maybe support on dispensary.

RDP 程式確實是目前最暢銷的程式。人們可以從 200 萬至 300 萬美元的投資開始。事實上，他們甚至可以用更少的資金來啟動它。他們基本上可以購買我們的 8 個 VFU，並且他們將有足夠的生物質來支持藥房。

So it really kind of gives the customers the flexibility to be able to scale over time and also not having to wait 12, 15 months, large capital outlay to get projects going. So this rapid deployment program is really what's picking up steam. And unlike the TTK program where it requires Agrify to put in all the capital upfront and invest at our risk. We are basically selling, right, all the hardware with margin, plus there's also recurring SaaS and production fees attached to it.

因此，它確實為客戶提供了隨著時間的推移而擴展的靈活性，而且不必等待 12 或 15 個月的大量資本支出來啟動專案。因此，這個快速部署計劃確實正在加速發展。與 TTK 計劃不同的是，它要求 Agrify 預先投入所有資本並由我們承擔投資風險。我們基本上是在有利潤的情況下銷售所有硬件，此外還有經常性的 SaaS 和生產費用。

And I think this new model is really what's resonating. And even with very little marketing, we actually, in fact, initially did not plan to really kind of sell this or market this until MJBiz. But as I mentioned earlier, we're already seeing tremendous traction. And with MJBiz coming up, I think it's just going to pick up even more steam. So it's a pivot of our business model, which I think is the right thing to do given the current market condition and people see that as completely different from the old TTK model that basically was what we kind of focused on last year and first half of this year.

我認為這個新模式確實引起了共鳴。即使很少進行行銷，事實上，我們最初並不打算真正出售或行銷它，直到 MJBiz。但正如我之前提到的，我們已經看到了巨大的吸引力。隨著 MJBiz 的出現，我認為它將會變得更強勁。因此，這是我們商業模式的一個支點，考慮到當前的市場狀況，我認為這是正確的做法，人們認為這與舊的TTK 模式完全不同，而舊的TTK 模式基本上是我們去年和上半年所關注的。

And then last question. Tim, you mentioned about some severance and reduction -- cost reductions. Cash flow used in the quarter from operating activities was $8.5 million. With the cost reductions that are in place now, what is the new expected cash flow use, Tim, have you modeled what that would be or what you expect it to be, a range for the fourth quarter?

然後是最後一個問題。提姆，你提到了一些遣散費和減少費用——降低成本。本季經營活動使用的現金流量為 850 萬美元。隨著成本削減已經到位，新的預期現金流使用是多少，蒂姆，您是否對第四季度的範圍進行了建模？

That's a good question, but I'm going to -- we don't give cash flow guidance, right? We're not going to guide cash flow. We're happy and pleased that cash flow from ops was only $8.5 million relative to what the historical track record in Q1 and Q2 were. But I will tell you, you have to think about the question you asked as it relates to or in conjunction with the restructured debt agreement. The terms of that debt agreement states that the company is limited from a net cash spend point of view of $4 million in net cash flow spend per month and $8 million per quarter in aggregate.

這是一個很好的問題，但我要——我們不提供現金流指導，對嗎？我們不會引導現金流。我們很高興也很高興看到，與第一季和第二季的歷史記錄相比，來自營運的現金流僅為 850 萬美元。但我會告訴你，你必須考慮你提出的問題，因為它與重組債務協議有關或與之相關。這筆債務協議的條款規定，從淨現金支出的角度來看，該公司每月淨現金流支出為 400 萬美元，每季總計為 800 萬美元。

So that is sort of the guide rails that we have to operate on or under as we move forward through Q4 into 2023. So given that, I just think relationally to where we are right now and what the parameters are of that restructured debt agreement, you would expect that cash flow from ops number to be either consistent where it was in Q3 or lower as we move through Q4.

因此，當我們從第四季度進入 2023 年時，這就是我們必須遵循或遵循的指導方針。預計來自營運數量的現金流要么與第三季度保持一致，要么在第四季度下降。

Our next question is from Scott Fortune of Roth Capital Partners.

我們的下一個問題來自 Roth Capital Partners 的 Scott Fortune。

This is Nick on for Scott. Just looking for some color on your recent harvest metrics. With the RDP set to roll out here, just wondering if you've seen any improvements you want to call out on the yield or the potency side? And just kind of how you're looking at further improving the VFU product moving forward here in this environment.

這是尼克替斯科特發言。只是在您最近的收穫指標中尋找一些顏色。 RDP 即將在這裡推出，只是想知道您是否在產量或效力方面看到了任何想要提及的改進？這就是您在這種環境下如何進一步改進 VFU 產品的方式。

So basically, the RDP program, as I mentioned, we are just now taking orders. So they have actually not been shipped. We are expecting to shift some of the existing orders in the coming quarter. So we don't -- we do not yet have the operating metrics for those RDP program just yet. But they're using our traditional 3.6 VFUs. So I would say that you can expect to pretty much get the same sort of results from the 3.6.

基本上，正如我所提到的，RDP 計劃我們剛開始接受訂單。所以他們實際上還沒有發貨。我們預計在下個季度轉移一些現有訂單。所以我們還沒有 - 我們還沒有這些 RDP 計劃的營運指標。但他們使用的是我們傳統的 3.6 VFU。所以我想說，您可以期望從 3.6 中獲得幾乎相同的結果。

As I also mentioned earlier, the new 3.7 VFU development is now complete, and we can actually begin to ship the 3.7 units in the first quarter of next year. And we believe that you could expect to have even better yield and results from the new 3.7 VFUs, which we will also be featuring and showcasing at the upcoming MJBiz.

正如我之前提到的，新的 3.7 VFU 開發現已完成，我們實際上可以在明年第一季開始出貨 3.7 裝置。我們相信，您可以期望從新的 3.7 VFU 中獲得更好的產量和結果，我們也將在即將舉行的 MJBiz 上展示和展示該產品。

And then just looking for an update on the status of your supply chain and whether or not you've seen those headwinds kind of begin to abate here. Just if you could unpack the changes you've seen within your supply chain in this environment, that would be helpful, too.

然後只是尋找有關供應鏈狀態的最新信息，以及您是否已經看到這些不利因素在這裡開始減弱。如果您能夠在這種環境中解開您在供應鏈中看到的變化，那也會很有幫助。

I think on the cultivation side, we have sufficient inventory to basically fulfill our most immediate customer orders. So from that perspective, I think supply chain is not going to necessarily affect our ability to ship these units. I think construction delays are still maybe happening, but we're seeing that pressure subside or basically reducing. So we do expect that on the cultivation front, supply chain is quite not going to be too big of an issue.

我認為在種植方面，我們有足夠的庫存，基本上可以滿足我們最直接的客戶訂單。因此，從這個角度來看，我認為供應鏈不一定會影響我們運送這些設備的能力。我認為施工延誤的情況仍然可能發生，但我們看到壓力正在消退或基本上減少。因此，我們確實預期在種植方面，供應鏈不會成為太大的問題。

On the extraction front, we do still kind of work with our vendor suppliers Obviously, in Q3, probably not so much of the supply chain issue, but obviously, because of the cash spend covenant, we weren't able to fulfill some of the orders. But I think that is something that we still have to fight through in quarter 4. But I think it seems like both internally and externally, supply chain pressure is probably getting resolved, but it's not completely, but we definitely see some improvements around that.

在提取方面，我們仍然與我們的供應商合作。但我認為這是我們在第四季度仍然需要解決的問題。

We have reached the end of the question-and-answer session. I would now like to turn the call back over to Raymond Chang for any closing comments. Please go ahead, sir.

我們的問答環節已經結束。我現在想將電話轉回雷蒙德張 (Raymond Chang) 以徵求結束意見。請繼續，先生。

Thank you, everyone, for joining the call today and look forward to speaking in our next quarter call. Again, appreciate and look forward to having -- giving everybody an update as we continue to focus on our execution and deliver results. Thank you.

感謝大家今天加入電話會議，並期待在我們下個季度的電話會議中發言。再次感謝並期待在我們繼續專注於我們的執行和交付結果時向每個人提供最新資訊。謝謝。

That concludes today's conference. Thank you for joining us. You may now disconnect your lines.

今天的會議到此結束。感謝您加入我們。現在您可以斷開線路。