Scratching beneath the surface

By Frank Buhagiar on Monday 18 September 2023

Scratching beneath the surface
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CommentaryFoodTech Investment

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

Friday evening.  The end of the working week (for some). An opportunity to look back at what’s been achieved over the last seven days (for some).  Or not. Some weeks more productive than others of course.  On the face of it, week ended Friday 15 September 2023, one of those where nothing much appears to have happened.  Take the Nasdaq.  Started the week at 13761.  Ended the week at 13708.  A fall of 0.4%.  Hardly worth bothering about. What about FFF’s listed foodtech space – recent weeks have seen the foodies match the Nasdaq, at least in terms of the share price riser/faller ratio? 21 risers; 23 fallers; two non-movers for the week ended Friday 15 September.  A marginal win for the fallers.  Listed foodtech once more following Nasdaq’s lead.

But scratch below the surface and there are things to report.  Take Opticept Technologies, featured in the last two Food on the Moves thanks to a persistent whiff of “eau de fundraise”.  All based around the theory that “Companies planning a fundraise can be tempted to put out a press release or two to generate interest ahead of the launch of a rights issue or similar. A little buying activity can give the share price a little boost.  A higher share price can help get a raise away.  Could be the difference between a successful or an unsuccessful outcome…Opticept, one to keep an eye on then.” That was Food on the Move’s “THREE THEORIES FOR THE PRICE ONE…” published on 04 September.

A week later in “TYING-UP LOOSE ENDS”, Food on the Move noted two press releases issued by Opticept during the week ended 08 September 2023. Both were relatively small.  Both were relatively early stage: “Early days for both initiatives.  Too early to announce perhaps?  After all, a Letter of Intent is no final agreement. As press release#2 states: ‘Work on the final agreement starts immediately to be ready within one month.’  Why not release when final agreement in place? Management scrambling around for anything to release to get the share price moving?” Food on the Move went on to conclude: “Of course, only half time…First part – Opticept putting out a fluffy announcement or two. Tick.  Second part - equity raise to follow?  Time will tell…”

One week on, sharpen those pencils for that second tick. For the company released the following press release at 1500hrs on Friday 15 September: “OptiCept Technologies AB has carried out a directed issue of shares and warrants and will initially receive approximately SEK 26.1 million subject to approval at the Extraordinary General Meeting”.

Press release goes on to say: “The Board…has…resolved on a directed issue of units (the ‘Directed Issue’) to a limited number of Swedish investors consisting of family offices, investment companies and qualified private investors…Through the Directed Issue, the Company will initially receive approximately SEK 26.1 million, before deduction of issue costs…The subscription price in the Directed Issue has been determined through an accelerated bookbuilding procedure…As a result of the completion of the Directed Issue, the Company fulfills the condition for the extension of the credit facility announced earlier today.” Raise required to extend the credit facility then.  SEK 26.1 million, a little over US$2.3 million.  Those fluffy press releases explained.  Theory intact.

At the other end of the fundraising process, MissFresh. As reported in Food on the Move’s  “COMPLETE THE SEQUENCE…” on 8 August, the Chinese fresh-food retailer had “entered into two share purchase agreements with two investors, respectively (the ‘Share Purchase Agreements for Financing’), and another share purchase agreement with Mejoy Infinite Limited and its shareholder (the ‘Share Purchase Agreement for Business Acquisition’)…Under the Share Purchase Agreements for Financing, the investors agree to subscribe 5,400,000,000 Class B ordinary shares of the Company in aggregate for a total purchase price of US$27.0 million…the new investors will hold 5,400,000,000 Class B ordinary shares of the Company, representing 88.1% of the Company’s total issued and outstanding shares.”

A month or so later and Yahoo!Finance reports that shareholders have given the green light for the capital infusion to go ahead. At the Annual General Meeting “…shareholders of the Company approved each of the four proposed resolutions…” Among these, “…an ordinary resolution to approve the transaction contemplated under certain share transfer agreement entered into by and between the Company and certain other party thereto as announced by the Company on August 7, 2023, and an ordinary resolution to authorize the Company’s directors, officers and agents to carry out the foregoing.”  Market seemed pleased with the result.  Shares up 39% on the week.

More scratching required, however, to explain a 61% rise in the share price of AgriForce Growing Systems. No fluffy press releases or any other variety to mention from the plant-focused agtech during the week. No new analysts research notes, recommendations or price targets either.  Next port of call - AgriForce’s vitals.  Sub-US$6million market cap.  Shares trading at 14 cents level.  In other words, AgriForce in the land of the penny stocks. A handful of buyers, sometimes all that is needed to move a share price sharply higher in the land of the penny stocks.  Case closed?

Not quite. A look at the graph reveals Agri’s stock made most of its gains on Thursday 14 September and Friday 15 September.  And at significant volume too.  37.7 million shares traded on Thursday 14th; 150.77 million shares traded on Friday 15th. Compare that to volumes of shares traded over the past month - never made it over 5 million shares a day.  Someone somewhere got a whiff of “eau de something”? Could still all be down to just another day in the wild world of penny stocks. For now though, AgriForce, an itch that can’t quite be scratched…just yet.