PhDtrader wrote: From the recent financials I’ve estimated the book value of EATS to analyze the current sp overevaluation, and it looks very favourable. Available data suggests that EATS current assets divided by 19,133,350 shares outstanding puts the value of each share between $0.29 (extremely conservative) and $1.17 (likely over optimistic). All estimates are in $CAD. At the time of writing EATS trades at $2.12.
Explanation of valuation range:
$0.29 (extremely conservative) assumes that the private placements have not increased at all in value, which seems extremely unlikely but I think is useful because it adds transparency to the more likely figure below.
$1.17 (likely over optimistic) assumes that the private investments have multiplied 15.5 times, which is the ROI from the known public investments. This is likely an over estiamte because recent additions (Plant-Power, Zoglos) almost certainly have not increased at such magnitude. Meanwhile, Eat Just has likely increased as much if not more.
Conclusion: EATS is probably worth about $0.90 to $1.00 CAD based on its current assets alone. At time of writing it trades at $2.12, and thus is about 2.2x overvalued. IMO, this is an extremely attractive valuation for a growth space with such disruptive potential and investor interest where 10x - 30x valuations are not uncommon. EATS will easily ‘grow into’ into this evaluation.
sp will be determined by investor optimism for growth in the foods/plastics biotech space, and how well EATS is positioned to capitalize on that growth with its current and expanding portfolio.
Methods:
* I worked under a conservative assumption that EATS has 1.5 million CAD cash. If someone sorts through this, please update us, but my assumption derives from EATS’ $3mil CAD cash in Sept 2020, minus investments (~$750,000), marketing ($300,000) and operations (?), plus about $600,000 raised from financing. So, I’m just going working with 1.5million as a conservative assumption – it could be as high as $2.5mil CAD
*References are the intern statement (March 2021), including Section 10 'Subsequent events' and the original prospectus (available on EATS website). Note that some investments are listed on both the original Prospectus and again in the Intern “Subsequent Events.’ I have been careful not to double count those.
Prospectus : https://eatbeyondglobal.com/invest/
Intern Financial Statement (March 2021):https://www.sedar.com/GetFile.do?lang=EN&docClass=5&issuerNo=00049633&issuerType=03&projectNo=03145743&docId=4910375
*I found no data on how much was invested in Above Foods!? But Above is still on the website, and so I assume EATS still holds equity in Above. I have completely left those funds out. Again, this means these estimates are conservative.
Results
here is my process to derive a range of estimates on EATS assets. Please do your own research and DD – this is really a back of the envelope analysis so please help me out by suggesting how this analysis should be improved
| | purchase sp | $ invested | Num shares | sp now | value now | Refernce | Comments | Shares outstanding |
| Public | | | | | | | | |
| Very | 0.25 | 50000 | 200000 | 5.5 | 1100000 | Prospectus | Assumes none sold |
| GDNP | 0.14 | 200000 | 1428571.4 | 1.25 | 1785714.29 | Prospectus | Assumes none sold |
| Sire Bioscience | unknown | 50000 | | | 50000 | Intern | Assumes no change - likely conservative, assume CAD$ |
| Private | | | | | | | | |
| Above | | Unknown | | | ? | News release | No info in Intern, but still on website |
| Nabati | | 250000 | | | ? | Prospectus | Assumes no shares sold |
| Eat Just | | 200,000 | | | ? | Prospectus | Assumes no shares sold |
| Singcell | | 152000 | | | ? | Prospectus | Assumes no shares sold |
| Turtle Tree | | 200000 | | | ? | Prospectus | Assumes no shares sold |
| Zoglos | | 50000 | | | ? | Intern | Assumes no shares sold, assume $CAD |
| Plant Power | | 312458.8 | | | ? | Intern | Assumes no shares sold, converted $US to CAD March 19, 2021 |
| | | | | | | | | |
| Total private ('no ROI') | | | | 1,164,459 | | Extremely conservative |
| Total public | | | | 2935714.29 | | Assumes no shares sold |
| cash and other assets less liabilities (assumed) | | 1500000 | | Estimate based on ~3 million in Sept 2020 (erring conservative) |
| | | | | | | | | |
| Estimate of private change | | | | | | | |
| Avg increase in public share price ('public ROI') | | 15.4642857 | | GDNP and VERY only |
| total (assuming private has had 'no ROI', plus cash) | | 5,600,173 | | | |
| total (assuming private has gained at 'public ROI') | | 22,443,237 | | | |
| | | | | | | | | |
| Share value estimate | | | | | | | |
| Sp (public plus 'private no ROI', plus cash) | | 0.29269172 | | Extremely conservative |
| Sp (Public plus private at 'public ROI', plus cash) | | 1.17299046 | | Likely over optimsitic (?) |