Vertical farming firm Kalera eyes SPAC deal

The company's falling value is notable, as it has seen its stock fall from a 52-week high of $5.99 per share to just $0.91 as of its most recent close, per Google Finance data. (The company intends to delist from its current exchange as part of the transaction, its release states.)

Why pursue a SPAC combination when the company has already listed? The deal would provide the firm with funding as it works to grow its current number of farms from four to 10. According to an investor presentation from December, 2021, the company said that it was "actively pursuing different financing alternatives to satisfy our financing requirements for 2022."

It's not hard to see why. Per the company's Q3 2021 earnings report, its operations burned $8.7 million in the first nine months of last year, while its investing cash flow was a stiffer -$110.0 million for the same period. Capital raised of $61.5 million helped partially offset those deficits, but Kalera still posted a net cash change of -$57.2 million in the first three quarters of 2021. It closed the September quarter with $56.2 million worth of cash and equivalents — more simply, the company needs more capital to continue expanding, as its operations are deeply in the red and the company is far from reaching cash flow breakeven, let alone positive net income.

Agrico, the SPAC that Kalera intends to merge with, has "$146.6 million cash in trust," it claims. That would give Kalera far more time to improve its operating results than its current cash position will afford the company.

A growing market

The deal will likely be viewed as a bellwether for the health of the burgeoning category. Last year, AeroFarms called off its own SPAC deal with Spring Valley Acquisition Corp. after the former announced the plan was ultimately, "not in the best interests of our shareholders."

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Photo Courtesy of IGS

Source: TechCrunch