Benson Hill $BHIL a food company

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(06-17-1023) (STL Business Journal) Matt Crisp, who co-founded Benson Hill, out as CEO of the publicly traded firm. Quote the article:

Crisp received total compensation of $17.1 million for 2022, including a base salary of $613,462 as well as stock awards and incentive plan compensation.

Benson Hill has recently enacted a “liquidity improvement plan” aimed at reducing costs and improving cash flow, with Benson Hill setting a target of achieving profitability by 2025. Initiatives that Benson Hill has outlined to improve liquidity include refinancing “high-cost” debt, trimming operating costs, staffing cuts, and exploring a possible sale of a soybean crushing facility it owns in Seymour, Indiana.

My quick comment: the CEOs got the usual gold parachute. For investors, not so much. Again quote: Since going public, Benson Hill has rapidly grown its revenue but has operated with losses. Its share price has also sagged since becoming publicly traded, down significantly from its starting point of $10 per share to close Thursday at $1.19 per share.

(05-11-2023) The Q1, 2023 results are here. It looks like they burned about $38 m cash. They still have about $110 liquidity (cash + marketable securities) per page 19. One thing I am not 100% is on page 20, they were saying “Cash, cash equivalents and restricted cash, end of period $ 41,107”, that cash equivalent may include “Current assets held for sale” in page 19. Anyway in about 2 to 3 quarters, they may run out of cash. It seems the stock rallied in last 2 days after earning report though.

(01-03-2023) The Q3 results is here. It looks like they burned about $49 m cash, and they have $30 m cash on hand. Keep in mind they came to market via SPAC and in last year or 2 SPAC bubble pretty much busted. Another example is Nextdoor ($KIND). Note the marketable security position is the same: still about $163 m. Also, it seems they may issue new shares down the road (quote from the Q3 release again): “The Company also filed a registration statement to put in place an At-The-Market (“ATM”) facility for up to $100 million. Once effective, the ATM facility is expected to provide additional flexibility to supplement the Company’s cash position over the next two to three years.”

(Update 09-20-2022) They released the q2 results. It looks like they burned about $50 mil cash in q2 and I also noticed they do have some marketable securities: worth $163 m. They also made an announcement on the ADM partnership news. I am staying away from them for now.

(Original 05-25-2022) They are across the street neighbor (linkedIn, web page, career page, current openings, Investor Relations, google finance stock).

Some readings

Latest 10-Q for the 3 months ends at 03/31/2022; investor presentation April 2022; investor presentation June 2021). They seems to have cash to sustain two quarters (source: from 10-Q page 8 we can see $53.2 m being used in operation in Q1, and they have $104 m cash on hand at the end of the Q.

Earning call transcript (seekingalpha)

“The total reported mark-to-market loss was approximately $13 million, with $5 million realized during the quarter for settlement of contracts corresponding to higher price sales in the quarter…Lastly, use of cash to fund our operations during the quarter was $53 million, which included a temporary timing effect of approximately $15 million for the margin calls on the mark-to-market losses in the quarter…” || #MajorsTake: it sounds like they are buying soy beans and do some food processing. Assuming they sold the processed material to the brand name or store name food makers. In terms of food chain (figuratively speaking) or business model, this is not the top of the food chain.

The PIPE news

It’s combined with the full year 2021 results news release, quote below: Today, Benson Hill also announced that it has entered into definitive agreements with certain investors for a PIPE (Private Investment in Public Equity) offering of common stock and warrants to purchase common stock, which delivered approximately $85 million in gross proceeds. The Company intends to use the proceeds from the transaction to help fund its ongoing business growth, namely in its Ingredients segment...

The definitive agreements define the issuance and sale of 26,150,000 units at a purchase price of $3.25 per unit in a private placement. Each unit consisted of one share of the Company’s common stock, par value $0.0001 per share, and a warrant to purchase one-third of one share of the Company’s common stock. In the aggregate, 8,716,661 shares of the Company’s common stock are underlying the warrants.

The warrants have an exercise price of $3.90 per share of common stock (subject to customary adjustments), were exercisable upon issuance, and will expire on March 25, 2027. Each warrant is redeemable by the Company for $0.10 upon the Company’s common stock trading greater than $9.75 per share for 20 of 30 consecutive trading days.

Impact of Russia / Ukraine war

Because both are main grain producer / exporter of the world, Benson Hill plant based food (mainly soy beans) seems poised to benefit from the war, ironically. “Benefit from war” is cringy to me, to say the least.

More info: Benson Hill | A SPAC to solve world hunger?!

2021 Letter to shareholder (dated 05/09/2022 by CEO Matt Crisp)

My comments: right now as of 06-08-2022, this is still on “too good to be true” or “too hard to understand” people. However, I am holding a small position and trying to understand it better.

“Founded in 2012 by two pioneering researchers in the photosynthesis field, Andrew Benson and Robin Hill, Benson Hill Biosystems is an agricultural solutions company dedicated to increasing crop yield primarily by increasing photosynthetic efficiency and carbon fixation. Benson Hill employs an integrated approach of computational and systems biology, bioinformatics, synthetic biology, and next-generation phenotyping, which afford it significant advantages in the field of intrinsic yield.” (source: BENSON HILL BIO INCREASES TOTAL FUNDING TO $34.7 MILLION)

Last but not least: couple YouTube videos below. The first one (business wire) sounds a bit like infomercials to me, when I watched it.

This one has a bit more analysis.

Overall, I don’t like companies used AI (artificial intelligence) and ML (machine learning) too much in its pitching deck. For that matter, big data, data science and in a promotional video.

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