Nabati Foods (MEAL.C), an Edmonton, Alberta-based company focused on providing whole, natural, plant-based, gluten-free and soy-free foods, announced today that it had halted trading on the Canadian Securities Exchange.
This notice comes on the heels of a July 8, 2022, news release, which updated its self-imposed Management Cease Trade Order (MCTO) on June 20, 2022. This MCTO followed an earlier MCTO issued by the company on May 3, 2022.
These administrative measures were put in place after the company failed to produce its financial statement for the year ending December 31, 2021. Nabati started 2022 at $0.42 per share and has since dropped 88% to trade at $0.05 per share on July 8, 2022.
There was a major management shuffle at the beginning of May when the company announced it had replaced its interim CEO, Michael Aucoin, with company founder, Ahmad Yehya. Shortly after this announcement, Kelvin Lee, Nabati CFO, resigned his position to be replaced with Becky Leong. Not stopping there, company director Don Robinson, also resigned his position and was replaced by Sean Ty, a Canadian capital market veteran.
This didn’t help investor sentiment as it followed an announcement in April that two other board members also resigned their positions.
Shareholder confidence continued to be damaged as Nabati’s news releases since May 17, 2022, solely consisted of updates to the company’s MCTO and continual delays on releasing its financial statements.
Management has now stated it expects the year-end 2021 statement to be released at the end of July instead of the previously announced June 30 release.
The company’s signature dairy-free and plant-based meat product line remain available for sale on Nabati’s ecommerce site.
This isn’t singular dunk on Nabati, the whole sector is taking a hit as noted by the below EATV ETF, an active portfolio of global plant-based innovation companies and climate change driven companies.
One might argue the current bear market and declining economy is impacting the plant-based food sector unduly, but the real problem is the inept get-rich-quick investment strategies that plague today’s stock exchanges.
The Plant-based food sector is the latest bubble following psychedelics, NFTs and cannabis. Industry players are struggling with the reality trough of profitably selling specialty food products to a niche market.
Consolidation is the next stage for the plant-based sector, and like cannabis, it remains to be seen if any positive bottom lines can be achieved. That said, the future is not written and Nabati’s statements may tell a happier story than anticipated. Only time will tell.
Currently Nabati trades at $0.05 per share for a market cap of $2.5 million.
–Gaalen Engen
