Skipper the Penguin

By Frank Buhagiar on Monday 8 May 2023

Skipper the Penguin
Image source: Skipper the Penguin
CommentaryFoodTech Investment

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

With the Nasdaq flat, FFF’s listed FoodTech space had to find its own way for much of the week ended 5 May 2023.  How did the FoodTechies fare without the direction of the tech-heavy index? 28 share price fallers easily outnumbering the 18 risers (there were two non-movers) says it all.  Moving swiftly on then…

Prize for the most active stock during the week goes to CubicFarm Systems (CUB), at least in terms of the number of press releases issued.  The agTech put out no less than three between 1 May and 5 May, starting with an Update “…with respect to its previously announced management cease trade order (the MCTO) issued by Company’s principal regulator, the British Columbia Securities Commission (the BCSC) on April 3, 2023. This update is in connection with the Company’s delayed annual financial statements for the year ended December 31, 2022.”  A reminder of why CUB finds itself here: “This is primarily due to a significantly reduced headcount in the finance team in connection with the Company’s previously announced cost reduction measures. As part of its ongoing restructuring efforts, the Company prioritized payments to ensure operational sustainability. This resulted in an outstanding balance with its auditor who temporarily halted services until the Company settled the outstanding balance...”

The good news is: “The Company has now substantially resolved these issues and is working expeditiously to complete the Required Filings, with the goal of completing the Annual Filings by April 28, 2023, and in any event on or before May 30, 2023, in accordance with the terms of the MCTO.” As it turned out, the company got its Q4 and Full Year Results out the very next day – announcement number 2.  Worth the wait? Not really: “Revenue for the year ended December 31, 2022 was $3.6 million, compared to $5.3 million in the prior year. The reduction was due to lower machine sales…Net loss for the year ended December 31, 2022 was $60.4 million, compared to $29.4 million in the prior year.”

Interim CubicFarms CEO John de Jonge had this to say: “Our ongoing restructuring efforts have focused on strengthening the future financial viability of the company. We continue to explore all options and remain optimistic about future prospects…The world continues to face challenges such as climate change, drought, and land scarcity, and so we remain dedicated to providing innovative indoor growing solutions that conserve agricultural resources and provide superior nutritious feed to benefit dairy and beef animals.” Based on the full-year numbers, Mr de Jonge has his work cut out.  And he’ll have to do it with a brand new interim CFO.  Cue announcement number 3: “Resignation of CFO and Appointment of Interim CFO”.   As for the market’s verdict after all those press releases?  A 20% fall in the share price.  Well at least the results are finally out of the way and the new management team can focus on exploring “all options…”

Same can’t be said for a host of other FoodTechs though.  Last week’s Food on the Move “Not another strategic review…” highlighted how Olo and Farmers Edge “put out announcements detailing the upcoming release dates for their respective Q1 financial results”.  Thankfully, shareholders won’t have long to wait to find out what these have in store – Olo is due to release on 9 May; Farmers Edge two days later on 11 May.  And they are not the only ones with results expected next week – HydroFarm’s Q1 numbers will be sandwiched in between on 10 May, as will Benson Hill’s. What will shareholders be looking for, or rather not be looking for?  The words of Skipper the Penguin, star of the film Madagascar, spring to mind: “Don’t give me excuses! Give me results!”