Shares of the Farmmi, Inc. (FAMI) stock were falling in the pre-market today following the announcement of pricing of Upsized Underwritten Public Offering of ordinary shares by it. FAMI stock price saw a downtrend of 55.25% to drop at $0.35 as of this writing. FAMI stock dropped by 9.27% at the previous closing. Let’s have a look at current scenarios.
Farmmi stock intends to sell its ordinary shares:
FAMI stock on April 28, 2021, announced the pricing of an upsized underwritten public offering of its ordinary share according to which FAMI intends to sell 140,000,000 ordinary shares at a $0.30 price per share. The gross proceeds resulting from this offering would be approximately $42.0 million without deduction of underwriter discounts and commissions along with other offering-related expenses.Net proceeds resulting from this offering would be used for the working capital as well as general corporate purposes of the Farmmi stock. The underwriter has been granted a 45-day option to purchase up to 15% additional ordinary shares of the FAMI stock under the public offering to cover the over-allotments and full exercise of this option would increase the gross proceeds from $42.00 million to $48.3 million in total. The offering is expected to end on May 3, 2021.
Farmii sales expansion:
Farmii stock expanded its sales through its subsidiary Zhejiang Forest Food Co., Ltd which had won the multiproduct order for export to Japan. The order is from the existing customer in Japan and related to Farmmi’s high quality richly flavored dried mushrooms, and dried black fungus. Japan is one of the top markets in the globe for Farmmi as the demand for the mushroom is very high there due to its use in various types of soup and food.
Zhejiang has also won a couple of other multiproduct orders in April for export to U.S and Israel. Both of these orders were for richly flavored dried mushrooms as well as dried black fungus. The U.S customer is a well-established trading company the network of which is expanded to many hotels in the U.S.
The announcement of upsized underwritten public offering is the obvious reason for the declining FAMI stock price. The recent developments of the Farmmi show that the FAMI stock is continuously expanding sales of its high-quality products around the globe. In the short long-term investors need to keep an eye on it.