In a letter from the CEO to shareholders, farming company Wide Open Agriculture (ASX: WOA) made big promises about funding its ambitious plans. Then, when the ASX asked it to prove its claims, the Company failed to comply.
Wide Open Agriculture’s securities have been suspended from trading by the ASX due to questions about the claims made in a letter to shareholders on April 19, which caused a significant increase in the share price.
WOA requested the 9-week suspension to address these concerns but this has left shareholders unable to trade the shares in the meantime. According to the voluntary suspension request, it will take two months for WOA to make a further announcement, aimed to be released by June 30, which is longer than the typical 1-3 day suspension period for most listed companies.
WOA was asked by ASX on April 27, 2023, to provide specific information regarding the “advanced confidential negotiations with a strategic production partner” that was mentioned in their Letter to Shareholders. However, WOA did not fulfill this request as required.
Therefore, the ASX will suspend WOA’s securities from trading following Listing Rule 17.3.1. This will continue until ASX is content with WOA’s adherence to the Listing Rules and deems it suitable for WOA’s securities to resume trading.
As per its report following the suspension request, the Company has started discussions for financing the remaining equipment required for Buntine Protein commercial production. WOA anticipates more than $1 million in grant funding for its Returns, Export, and R&D activities in 2023. In the first quarter of FY23, WOA announced a partnership-based approach for large-scale production, moving away from its previous “greenfield” facility strategy.
In the second quarter of FY23, it achieved regular and high-quality production at its pilot plant. In the third quarter of FY23, WOA engaged in preliminary discussions with engineering consultants and potential production partners, exploring the potential for faster time to market, lower capital requirements, and a stepped profile for capital investment aligned with volume. These discussions contrasted WOA’s previous “greenfield” facility strategy. In the fourth quarter of FY23, Wide Open Agriculture (WOA) anticipates that confidential talks with a strategic partner to produce Buntine Protein will work out.
Expenses related to the production and operation of Dirty Clean Food products, such as beef, lamb, and oat milk, are included in the Product Manufacturing and Operating Costs. Advertising and Marketing expenses cover the costs of promoting the Dirty Clean Food brand. Staff Costs represent the salaries paid for administrative, sales, distribution, and general management activities.
While Wide Open Agriculture emphasised strategic deals for its Buntine product, it didn’t share details. Over the next nine weeks, the Company must prove to the ASX that it has the money to see through its future or suffer the consequences.
Alinda is a Business Reporter for The Sentiment
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