Quotes on shares of Above Food, a regenerative agriculture company, plummeted following a corporate update for investors. The company acknowledged that it lacked working capital for growing its business in the 2024 fiscal year (ended January 31, 2024). As a result, revenue for the full year was lower than 2023, while its gross loss increased nearly fivefold.
Details
On Friday, July 26, shares of Above Food, a small company with a market capitalization of $41.6 million, fell 20.2% to $1.46 per share on the Nasdaq exchange, though it opened trading on Monday with a 6% rebound.
After the close on Thursday, the company released an operating update for investors, including a statement that a lack of working capital hindered the growth of its business in the 2024 fiscal year. The company’s revenue for 2024 was $273 million, down nearly 7% year-over-year. Since the 2021 fiscal year, the company’s revenue had been growing about 34% annually: from $113 million in 2021 to $149 million in 2022, and then to $293 million in 2023.
The revenue trend “presented the company with headwinds related to its efforts to optimize its mix of revenues,” the release said. Its gross loss nearly quintupled to $4.4 million, with a net loss of $39.5 million, almost 15% bigger year-over-year. “Significant losses” in the 2023 and 2024 fiscal years were attributed to consultant fees related to the company’s IPO preparations, as well as expenditures to fulfill sales contracts and the implementation of the systems needed to be publicly traded, Above Food explained.
Context
In May 2023, Above Food announced its intention to go public through a merger with the SPAC Bite Acquisition Corp. However, the deal was delayed as the company repeatedly submitted amendments to the registration statement for the U.S. Securities and Exchange Commission (SEC). The merger was finally completed on June 28, 2024. Trading of the new company’s shares began on July 1.
What the company offers investors
Above Food is a food company specializing in regenerative agriculture and sustainable food technologies. It focuses on soil and seed genomics and grows lentils, beans, chickpeas, and other protein-rich crops “naturally.”
The company has its own grain storage facilities and a private railcar fleet to more effectively manage logistics. According to Above Food, it operates in a market worth over $200 billion. The company has 260 clients and 62,000 points of sale. By controlling its production and distribution channels, Above Food claims it can achieve higher margins and improved operational efficiencies.
