Two-and-a-half-fold increase in listed foodtech share price risers!

By Frank Buhagiar on Monday 28 August 2023

Two-and-a-half-fold increase in listed foodtech share price risers!
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CommentaryFoodTech Investment

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

All fine then in the land of FFF’s listed foodtech. Well, not quite. It’s all about the starting point of course. And as reported in last week’s Food on the Move, “ONE, TWO, THREE, FOUR, FIVE…”, the bar was not set that particularly high: only six out of the 45+ listed foodtechs covered finished the week ended 18 August in positive territory. One week on? 15 share price risers; 29 fallers; and four non-movers. Risers still a way off the fallers then, but hey progress is progress! 

Among the FIFTEEN share price risers, AgriFORCE stands out with a 28% gain. No new news out but it was only in July that the plant-focused agtech announced a management shakeup. At the time, newly-appointed interim CEO Richard Wong announced: “We are reallocating resources to focus on commercialization and organic growth of the Company’s three key assets: Un(Think) Foods, a brand based on our patented process to naturally convert grains and pulses; AgriFORCE-RCS Hydroxyl generating devices for eliminating pathogens and volatile organic compounds (VOCs) in food manufacturing and controlled environment agriculture; and the Company’s patented GrowHouse structures and automated growing systems. Each of these technologies target distinct, multi-billion-dollar addressable markets, and we have a talented team to bring these innovative products and technologies to market in the most timely and cost-efficient manner possible...”

Speaking of costs, less than a week later the company provided an update in which Mr Wong said: “Importantly, we have reduced our average monthly operating cash burn by approximately 31% since year end and continue to explore areas where we can remove non-essential expenses.” Fast forward to 10 August and management put out yet another announcement: “AgriFORCE Growing Systems Announces Exclusive Distribution Agreement for Mexico”. New team hitting the ground running it seems. Time will tell how they fare. One thing in their favour. With the market cap now at $4.35 million, the proverbial bar not very high. It’s all about the starting point after all!

Something about companies with names beginning with Agri…Agrify another strong mover – shares up 11.5% on the week. Not clear why though. Company’s only announcement of the week, “Agrify Receives Nasdaq Notification of Non-Compliance with Listing Rule 5250(c)(1)”, not an obvious catalyst for a double-digit share price rise. The press release goes on to explain that non-compliance is down to “not having timely filed its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023...if Agrify fails to timely regain compliance with the Nasdaq Listing Rule, Agrify’s common stock will be subject to delisting from Nasdaq.” 

Why the non-compliance? “As disclosed…on April 17, 2023, Agrify’s audit committee concluded that, as a result of errors in the accounting for warrants previously issued by Agrify, it is appropriate to restate Agrify’s previously issued unaudited condensed consolidated financial statements as of and for the fiscal periods ended March 31, 2022, June 30, 2022 and September 30, 2022…Given the scope of the process for preparing the amended quarterly reports, Agrify was unable to complete and file the Form 10-K for the fiscal year ended December 31, 2022 and the Form 10-Q for the fiscal quarter ended March 31, 2023 by their respective due dates. Nasdaq has previously granted the Company an exception until September 30, 2023…The Company is working diligently and expects to file its Form 10-Q within the prescribed period…”

Still not getting the share price gain. Hmm…first four letters of the name, not the only similarity with AgriForce. The cannabis solutions provider also underwent a management reshuffle recently. What’s more its market cap too has fallen to around the $4million level. And maybe that’s it. Bar so low, the possibility of filing a form or two “within the prescribed period” enough to send the shares higher? Mystery solved perhaps.

No mystery surrounding Grab’s 14% share price rise. Most of the gain clocked up on 23 August, the same day the online food delivery co. released its Q2 numbers: revenues up “77% year-over-year to $567 million”; losses improved 74% year-over-year to $148 million; and “Adjusted EBITDA improved by 92% year-over-year to $(20) million”. 

CFO Peter Oey had this to say: “We continued on our path to profitability, with Group Revenues growing 77% YoY, while delivering our sixth consecutive quarter of Group Adjusted EBITDA improvement. Against the backdrop of a strong first half along with our focus on driving cost efficiencies and maintaining a strong balance sheet, we are revising our Group Adjusted EBITDA guidance range up by $165 million to $195 million, to $(30) million to $(40) million for the full year 2023. We are on track to achieve Group Adjusted EBITDA breakeven in the third quarter of 2023, ahead of our prior target of the fourth quarter of 2023.” Talk about raising the bar…