Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
Here is another opinion piece in the New York Times about the state of the cultivated-meat sector:
The Revolution That Died on Its Way to Dinner
https://www.nytimes.com/2024/02/09/opinion/eat-just-upside-foods-cultivated-meat.html
To summarize the view presented in the article: the outlook is dire and most, if not all, companies will fail.
If we hypothetically assume that all of ANIC's investments in cell-culture companies have zero value, we will have a new NAV of 16.48*(1-0.32)=11.3p. Surprisingly, this still leaves the company trading at a discount!
I noted that the slide in the company presentation showing investments in the sector year-by-year has now been removed, likely because funding has now dried up.
I am holding on to my 500 000 shares, still hoping for a positive outcome. The precision-fermentation sectors seem to be in much better shape, with potential to scale, and there is always the possibility of unexpected advances in cellular agriculture.
Thanks for sharing, RWT2. Upside Foods, and likely the cultivated meat industry at large, are unfortunately having problems. Here are two recent articles describing the problems:
December 14, 2023. Bloomberg: The Biggest Problem With Lab-Grown Chicken Is Growing the Chicken
https://www.bloomberg.com/news/features/2023-12-14/upside-foods-struggles-with-lab-grown-chicken-despite-600-million
September 15, 2023: Wired. Insiders Reveal Major Problems at Lab-Grown-Meat Startup Upside Foods
https://www.wired.com/story/upside-foods-lab-grown-chicken/
Upside Food is apparently only selling a pound of chicken a month.
Given this, it makes sense that ANIC has shifted towards precision fermentation. This is different from both a production and regulatory standpoint, and the precision fermentation sector can succeed even if cultivated meat companies suffer setbacks.
Bill Gates is now a foodtech investor. On his blog, he describes two companies producing alternative fats that he has invested in. The first, Savor, seems to produce animal fats through a process that is neither cellular agriculture nor precision fermentation. The second, C16, produces a palm-fat alternative using precision fermentation. You can read more here:
https://www.gatesnotes.com/Alternative-fats-and-oils
Perhaps ANIC should also look into Savor, to broaden the portfolio with a new production technology?
With the share buyback program drawing to a close on March 29, there's still a chance that we will see the strategic deployment of the full £3.0 million. This could act as a potent afterburner, propelling the stock price back to the revered summits of its past glory.
Or perhaps not.
@RWT2: Some of the companies have indeed overpromised and underdelivered. Here is a quote from Blue Nalu's press release in 2021, announcing the acquisition of $60 million in convertible funding:
"BlueNalu plans to introduce a wide variety of cell-based seafood products from its pilot production facility in San Diego. The company anticipates starting with the launch of mahi mahi later this year, followed by the launch of a premium bluefin tuna thereafter. "
More than two years later, no product has been brought to market. The plans to launch with mahi mahi have been scrapped. Is it just regulatory challenges or something else? I don't even know if or when they have filed for approval.
Adding to this, Eat Just have been selling cultivated meat in Singapore for more than two years, but there has been no scale up in quantity or improvement in cost or quality as far as I know. I believe they are selling at a loss.
I remain a believer, but it would be nice to see some more products to market. Perhaps Metaly can burst into 2024 like a wild stallion fresh out of the starting gate, triumphantly delivering vast quantities of pet food that will revolutionize the world for the better. Maybe Formo's new eggs, promised for the end of 2023, will hit the stores and make a splash. Or perhaps Blue Nalu will finally get their act together and start selling some of that Bluefin Tuna. This may be the year when cultivated meat and precision fermentation have their big breakthroughs at scale!
Yes, I was wondering about the share buyback too. Could it be that they never intended to go through with it, and just mentioned the possibility to shore up the share price? Otherwise, the report looks promising and I think we can look forward to an exciting new year, 2024.
I had the same problem as you, PurplePenny, when I started buying ANIC. What I had to learn is that the Alternative Investment Market (AIM), where ANIC is traded, works different from other exchanges. All trades are made through a market maker. You can never trade directly with another individual. Thus, if I place a buy order for 10.2p, it is entirely possible that another sell with take place at a lower prices such as 9.8p. I ended up only placing orders at the "Ask" price.
If I've calculated correctly, BluNalu's Series B fundraise will increase Agronomics' net asset value (NAV) by 4%.
I find it surprising that Agronomics did not participate in the fundraise. Maybe they no longer hold a strong belief in BlueNalu, or they're opting to save their cash reserves for other ventures? I've noticed that they've recently leaned more towards precision fermentation rather than cultivated meat, which could have influenced their decision.
Although $33.5 million is a significant amount, I had expected BluNalu to secure more. Are they aiming to reduce dilution given the current market conditions? Or might they be eyeing debt to cover the costs of their future factory expansions?
Formo entering the egg market took me by surprise, but good news IMO. Their new egg product seemingly doesn't require regulatory approval in Europe and is expected to be on the market in Germany already by New Year. Egg proteins are a huge market and the only two currently known competitors are both in ANIC's portfolio (unless you count Eat Just and their mung-bean eggs as competition).
I am happy with the share buyback program. I think it will support the stock price, and £3 million is not so much as too seriously set back Agronomics ability to support the portfolio companies.
There will come a time when Agronomics must again raise funds, and the higher the stock price is then, the better.
That's a good suggestion, @RWT2. I will consider it and let you know that answer if I do.
In the meanwhile, I came across a post by one of the founders that seems quite illuminating:
https://www.linkedin.com/pulse/shiok-meats-updates-sandhya-sriram-phd
In short, the efforts to scale up shrimp production have thus far been unsuccessful, and half of the staff have left in the last 6+ months. The company has not yet been able to secure additional funding, and they are now trying to launch red meat (leveraging their acquisition of Gaia Foods) as their first product to market using the funds they have left.
Based on the turbulent situation in the company, I guess ANIC has simply written down the value to 0 and no longer list their holding in the corporate presentation, even though they most likely remain a shareholder.
The outlook for Shiok Meats isn't great, but I am keeping my fingers crossed.
Agronomics' most recent final results RNS, released on December 20, 2022, stated that their investment in Shiok Meats was valued at zero. I've now noticed Shiok Meats is no longer featured as a portfolio company in the latest corporate presentation, which is available on Agronomics' website.
What's behind this move? Is Agronomics trying to downplay what seems to be a less than optimal investment by presenting only companies with positive valuations, or have they completely disposed of their holdings in Shiok Meats? There's no public evidence of bankruptcy—quite the opposite, in fact, as Shiok Meats was actively hiring just a week ago and maintains an active LinkedIn presence.
In my view, if Agronomics still holds any shares in Shiok Meats, it would provide clarity for stakeholders if Shiok Meats remains mentioned in the corporate presentation, even if their investment value is listed as zero. This is not to criticize Agronomics; it's understandable for any company to want to present a robust portfolio. It's simply a matter of providing complete information to those who follow Agronomics' activities closely.
Both New Age Eats and Shiok Meats were assigned zero value in the final results RNS from December 20. While it is not surprising that some companies do not make it, I would have appreciated additional information and explanation. It appears that Agronomics RNS are mainly, perhaps exclusively, focused on conveying good news.
Solar Foods has now received regulatory approval for sale in Singapore:
https://solarfoods.com/solar-foods-receives-novel-food-regulatory-approval/
More products on the market for our companies is good news, and hopefully Solar Foods will benefit from its experiences in Singapore prior to entering the EU and US market.
@RyeSloan: I think we are pretty much in agreement. The NAV uplift is a good development. I am just saying that I would have been even happier if Liberation Labs had already been able to complete their seed funding round. As I read today's RNS, only ANIC and Siddhi Capital were prepared to make a serious investment with additional investors "anticipated to participate by year end".
Maybe I being too critical here - it could be that the additional investors are already secured and for whatever reason they just choose to wait a bit with their investments. I guess we will see by year and, and I am hoping for the best!
@RyeSloan, turning $627k cash into an unrealised gain of $14.8m in 4 months is fantastic if there is a way to realise the gain. However, since Liberation Labs' seed funding round is not yet fully subscribed, I presume it may be difficult to find a buyer for ANIC's holdings at that price. But this can - and hopefully will - change in the near term.
If the unrealised gain of $14.8m cannot be realised, then it is for now only a liability of 15% * $14.8m + VAT to Shellbay.
Today's RNS sounds good, but I am still slightly worried as the US$ 20 million seed funding round does not seem to be fully subscribed and may perhaps never be. The RNS also doesn't seem to state to what extent Liberation Labs' seed funding round has already been subscribed. I am guessing that it is subscribed to US$ 10 million but I don't know. Hopefully, we will get clarity on this in the coming days.
With the current market sentiment, I wouldn't be surprised if we see the stock price drops below 10 pence soon.
I think it is also likely that positive news - such as regulatory approval in the US - gives the stock price a significant uplift.
I don't know what the future holds, but at times like this I take some comfort from legendary investor's Thomas Phelps advice in a fictional (!) conversation with Christopher Mayer:
"What investors should do is focus on the business, not on the stock market."
and
"Phelps advices looking for new products, new materials, and new products - things that improve lives, that solve problems and allows us to do things faster better, faster and cheaper."
The quotes are from Christopher's book 100 Baggers: Stocks That Return 100-to-1 and How To Find Them. You can read the fictional conversionation as a free preview on Amazon, if you wish. Amazon, by the way, is a 100 bagger but its generously rewarded shareholders still had to experience soul-crushing declines, at one time even as much as 90%. Now they are thankful that they did not lose their hope and sell their holdings during one of these downturns.
The Guardian has an article about plant-based food that may be of interest:
https://www.theguardian.com/food/2022/sep/24/plant-based-meat-failed-impossible-burger-mcdonalds-beyond-meat
Among other things, it highlights the difficulty of getting consumers to adopt climate-friendly, but more expensive, plant-based food alternatives. The Good Food Institute is mentioned towards the end.
Don't want to scare you 100Cups, but at ca 15.45 minutes into the linked presentation Anthony Chow states that "these are pretty capital hungry businesses so we are going to need to raise more money although we are not going to be raising money at earliest until late this year if not early next year."
https://www.youtube.com/watch?v=WW4SuZqf9Dw
I do hope the fundraising can wait a bit longer than that, if the stock price remains at its current low levels.