Shareholder Approval Key as Wide Open Agriculture Seeks $500K Capital Raise Amid Risks

Capital Raising Strategy

Wide Open Agriculture Ltd (ASX – WOA), a player in the plant-based protein sector, has launched a Share Purchase Plan (SPP) to raise up to $500,000 by issuing 21,739,130 shares at an issue price of $0.023 per share. Accompanying this offer, shareholders will receive one free-attaching option for every two shares subscribed, exercisable at $0.03 and expiring in July 2026. The offer is fully underwritten and contingent on shareholder approval at the upcoming general meeting scheduled for 3 July 2025.

This SPP follows a recent two-tranche placement that raised approximately $2.6 million, demonstrating the company’s ongoing efforts to secure funding to support its strategic growth initiatives. The placement involved issuing over 112 million shares at the same price point, with free-attaching options on a similar basis.

Use of Funds and Growth Prospects

The funds raised from the SPP and placement are earmarked primarily for ramping up production at the company’s protein manufacturing facility in Germany, advancing sales and marketing activities, and developing by-products such as lupin fiber and oil. These initiatives are critical to Wide Open Agriculture’s pathway to commercialisation of its proprietary lupin-based protein products, including the Buntine Protein® brand.

The company’s strategy reflects a focus on scaling production efficiently while expanding market reach in Australia, Europe, and beyond. However, the prospectus highlights that the offer is speculative and subject to risks including production scale-up challenges, competitive pressures in the alternative protein space, and regulatory compliance across multiple jurisdictions.

Shareholder Impact and Governance

Upon completion of the SPP and placement, the total number of shares on issue is expected to increase by approximately 3.25%, potentially diluting existing shareholders’ ownership proportion. Notably, substantial shareholders such as Liam Cornelius hold significant stakes, with interests remaining largely stable post-offer.

The company’s board, including Non-Executive Chairperson Ms Zhan Yaxi and Directors Mr Anthony Maslin and Mr Brett Tucker, have disclosed their holdings and remuneration, maintaining transparency ahead of the shareholder vote. Directors have indicated they do not intend to participate in the SPP, underscoring the offer’s focus on broader shareholder participation.

Regulatory and Market Considerations

Wide Open Agriculture is unable to satisfy certain ASIC discount price conditions for the SPP, necessitating shareholder approval for the issue of securities under the offer. The company also cautions that the share price may fluctuate, and the offer price represents a premium to recent trading prices, which introduces market risk for participants.

The company remains compliant with ASX continuous disclosure obligations and has provided a detailed prospectus outlining the rights attaching to the new shares and options, risk factors, and the pro-forma financial position post-raising. No material legal proceedings are pending against the company, and it maintains insurance coverage consistent with industry standards.