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@dominicusbenacus He sounds quite relaxed and confident for a CEO who is having difficulty completing a fund raise. More generally I'm impressed by the team he's built, their industry experience and connections to potential customers.

The interview with CEO Mark Warner, during which he discusses funding, is 2 months old: https://www.youtube.com/watch?v=s9Nj16LB_JY

"US precision fermentation protein manufacturer Liberation Labs is lining up a Series A funding round that could ink the brand as much as $75M, reports Axios. The financing will be used to build its upcoming $115M facility in Richmond, Indiana, which will have a capacity of between 600 to 1,200 tonnes of protein per year."

www.greenqueen.com.hk/liberation-labs-75m-series-a-funding-commercial-precision-fermentation-protein-facility/

The largest addressable markets are labour, energy, transport and food. Labour will be disrupted by humanoid robots, energy by decentralised solar and batteries (virtual power plants), transport by electric and autonomous vehicles and food by precision fermentation. Tesla is in a good position to gain significant market share in the first three industries, the companies in ANIC's portfolio the latter. Both companies should be excellent investments. For me it's and/and, not either/or.

Tony Seba and the RethinkX team made accurate predictions about the growth of electric vehicles well before that happened. The whole report on "Rethinking Food & Agriculture" should be required reading for anyone invested in ANIC: https://www.rethinkx.com/publications/rethinkingfoodandagriculture2019.en

There is no chance the US government will allow itself to fall behind China when it comes to such important and revolutionary technology, opening it up to a position of vulnerability in important elements of its food supply because of swine fever or bird flu. All nations are going to seek autonomy (renewables) when it comes to energy and agriculture (precision fermentation).

At 2p a share, the company would be trading for about the value of the cash on the balance sheet. That will diminish over time if they don't monetise any of their assets, but 2p seems excessively bearish to me. Unless you think their whole portfolio is worth nothing.

Here's another article that covers some of the same ground: https://www.greenqueen.com.hk/meatly-cultivated-lab-grown-meat-pet-food-uk-regulatory-approval/

Hi Agricore, thanks for the correction, I was indeed confusing pounds and pence. Why aren't you including bank deposits in your estimation of current assets? If you add the £10m of bank deposits to the £18,093,984 of cash and cash equivalents you get to £28,093,984.

Hi Agricore,

"Yet we also know the NAV as at 30/09/23 is reported as 16.48p. (0.46p a share LESS than 30/06)"

For me, Agronomics reported a NAV of £15.80 as of 30 June 23. That would mean an increase in the NAV of 68p. Here's the press release: https://www.londonstockexchange.com/news-article/ANIC/net-asset-value-calculation-at-30-june-2023/16066212

ANIC shares made a low of £8.90 on 23/10/23 and made a higher low on 22/12/23 at £9.35. The stock hit a high of £11 on 22/11/23 and the high so far today is £11.50. So a higher low and now a higher high. We could finally be seeing a change in trend.

"RNS 03/11/23 states the NAV per share as at 30/09/23 is 16.48p/share. And as at 30/06 was 15.80p"

Changes in the NAV happen when portfolio companies raise new capital at valuations that differ from the last time they raised capital. Between June and September of last year, Meatable raised £30m, which means Agronomics stake increased by £3.9m, and Clean Food Group raised £2.3m, resulting in an unrealised gain to Agronomics of £5.37m. This accounts for the jump in NAV between quarterly calculations in June and September.

I dislike the terms of the Consultancy Agreement, where Shellbay is entitled to 15% of any increase in the NAV, especially because Shellbay is controlled by Jim Mellon, Chairman of the Board. It's difficult to say whether the NAV is correct as none of the companies Agronomics has invested in are publicly traded. The NAV gets adjusted to reflect the current valuation of an asset when a new funding round happens. That said, if its largest investment, Liberation Labs really will begin generating $25m in FCF a year from 2025 onwards, then I think the shares are significantly undervalued.

Agronomics has a little more than £18m of cash on the balance sheet, it has £170m in total assets, most of which is made up of its portfolio investments. It raised capital in the past by issuing equity not debt.

Lots of interesting comments in this article:

"Liberation Labs’ pricing structure “isn’t that different than the CMOS out there as far as cost to use our facility per month,” he said. “The difference is, we’re designed to make twice the product. Most of the numbers we’ve seen when we’ve quoted larger clients are minimum 30-40% lower than they’re seeing on their existing all-in manufacturing costs.

...

Demand exceeds supply

With more than 12 months to go before the facility is operational, Liberation Labs has “way more interest than the capacity of the facility,” claimed Warner. “We’re confident we’re going to be able to get a credible binding offtake for a baseload on the facility that will support our fundraising and initial operation.”

https://agfundernews.com/liberation-labs-bags-25m-usda-backed-loan-to-fund-us-biomanufacturing-hub-what-matters-is-whether-the-capacity-is-fit-for-purpose

I agree that there will need to be quite a bit of education about lab meat not being a form of "Frankenfood". I remember a few years back there was a lot of concern about GMOs, especially soy, and there seems to be less these days. Will we see a similar trend?

The bigger question for me is whether Agronomics can be successful if lab meat fails to gain traction. I think it will be easier for companies like Onego Bio, Every and Formo to become successful as their products (dairy and eggs) are largely used as ingredients in other foods. The hurdle for milk and dairy is low as protein represents just 3% of total content. These are also large markets, with global demand at $8b and $3b for dairy products and eggs respectively. Then there is Liberation Labs...

In another interview, this time with Nick Searl at Zeus Capital, Anthony Chow states that Liberation Labs will be generating about $25m in FCF when it begins production in Q1 25. He estimates that Agronomics' stake will represent about 1/3 of the company at that time (clearly anticipating further funding rounds) which he also says "pretty much underwrites the entire market cap of Agronomics as it currently stands."

https://zeuscapital.co.uk/exclusives/9906909192/

Here's an alternative link: https://www.brrmedia.co.uk/broadcasts/654b751359ca99144baccab8/agronomics-q3-results/

That link doesn't work, so for anyone interested, the interview can be found on Research Tree.

he discusses the share price and market environment. expects new funding rounds by liberation labs and onego bio will help the valuation. opex of £1m per year means they have a comfortable runway of at least 10 years. would like to raise more capital to add to investements, but won't do so with the share price trading at such a steep discount:

https://*********************/media/agronomics-q3-results-17-11-2023/id/19365/bade8f5a-0e6a-4a49-9d82-427af0f39223