Nothing goes up in a straight line

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

Not quite a Valentine’s Day massacre in FFF’s listed FoodTech space, but not far off.  The week ended Friday 10 February 2023 saw just 10 risers, 34 fallers and five non-movers. FoodTech’s 2023 unbroken run of no ‘Down’ weeks (where share price fallers outnumber risers) comes to a screeching halt but, then again, the sector was always going to struggle during a week that saw that standard-bearer of growth stocks, the Nasdaq, shed 2.5%.

With so many fallers to choose from, where to start? With AppHarvest (APPH), that’s where.  Shares shed 62.5% to finish the week at US$0.88 after the vertical farmer unveiled a … $40 million underwritten public offering of shares of its common stock…for working capital and general corporate purposes.”  The new stock is being issued at US$1 a share, a far cry from last week’s US$2.35 level.  The stock had been on a tear since the turn of the year so, with hindsight goggles on, a raise was always on the cards.  As for the offering, it’s due to close “on or about February 14, 2023” – who said “not quite a Valentine’s Day massacre”?

And with a large number of FoodTechies boasting strong share price gains in recent weeks, chances are AppHarvest (APPH) won’t be the only one looking to seize the opportunity to replenish the coffers.

Step-up, Blue Apron (APRN).  Last week’s Food on the Move, “BLUE APRON TAKES OFF…” highlighted how the meal kit co. was “up 70% from the US$0.709 level it was trading at less than a month ago.”  One week on and APRN shares retraced 11% to close at US$1.07.  No official raise underway but the company did announce “it has filed a prospectus supplement to its existing shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC), under which it may offer and sell shares of its Class A common stock having an aggregate offering price of up to $70 million from time to time through an ‘at-the-market’ (ATM) equity offering program.” The announcement goes on to say: “The company intends to use the net proceeds from any sales of shares under the ATM program for general corporate purposes…” So, watch this space.

Burcon Nutrascience (BU) could be another to keep an eye on after the “technology leader in the development of plant-based proteins” issued a “Shareholder Letter Regarding JV, Merit Functional Foods”.  The letter states that Merit’s “overall financial performance…has fallen short of expectations and led to the current cash flow concerns.”  This has prompted newly-appointed CEO Kip Underwood to enter “…discussions with the lenders of Merit to propose terms that maintain current business momentum and provide a path to profitability.”  The letter goes on to say that BU is “…exploring interim financing for Merit while working on a more specific, longer-term funding solution”.

The CEO sounds excited: “If our funding plans are successful, Burcon could have, for the first time in its history, a chance to own its destiny.  We could have the opportunity to develop, produce, and market our innovative products.” Shares were marked down 16% during the week but helpfully the company will be holding an investor call on Valentine’s Day “to discuss its financial results for the fiscal third quarter ended December 31, 2022” – no doubt shareholders will also have the opportunity to find out more about the…er…merits of any Merit deal.

And for a final flourish, how about Kalera (KAL)?  The vertical farmer is still basking in the afterglow of the sale of its international business to Dutch indoor agriculture company Growy.  As detailed in the Company’s 30 January announcement, the sale, the financial details of which have not been disclosed, allows: “Kalera’s management to focus all efforts and capital to become one of the leading vertical farming companies in the United States.” The market seems impressed – shares added 17% to finish the week at US$7.9, a third higher than the US$5.97 level they were trading at before the deal was announced. Hmm, any more gains like that and KAL might just be tempted to launch a fundraise of its own.  Well, if it works for others…