GEO Investing

We are calling all investors who own the stock Origin Agritech Limited (NASDAQ:SEED) to sign a petition to urge the company’s Executive Chairman & CEO, Dr. Gengchen Han, to cancel the shelf it disclosed on March 4, 2021.

At the very least, the company should cancel its stock purchase agreement executed on May 21, 2021. In our opinion these types of arrangements are often viewed as toxic and low quality ways to raise money. As a matter of fact an investor created a list of firms that are often parties to these types of arrangements. It just so happens that SEED executed this agreement with a company on this list.

Let’s not forget that U.S. listed Chinese companies have a tremendous amount of reputation and trust hurdles to cross when courting U.S. investors. In our opinion, equity line of credit arrangements such as the one SEED entered into only adds to this hurdle.

On May 5, 2022, SEED issued a 2022 mid-year financial update. In the press release, the company mentioned that It had access to credit facilities to fund its growth:

“The company has access to borrowing under credit facilities that can be accessed as needed to fund future growth.”

So, we are asking the company to show us that this is the case!

The company currently has ~$67 million of contracted revenue with marquee agricultural customers in China, including a recent contract with Muyuan, China’s largest hog farming company.

Furthermore, this contract is expected to span five years and cover a 1 million metric ton purchase agreement. Using the current rates that the company has disclosed, ~$325 per acre, this could translate into a revenue potential of $325 million over the next five years vs. SEED’s current market cap of ~$62 million.

This should help the company obtain lines of credit to fund its near-term growth to fill these orders,

We also urge investors to call on Mr. Han to purchase shares of his own company on the open market to strengthen investor confidence in SEED’s efforts to become a premier source of its stated robust biotechnology seed pipeline, especially in the area of pest resistant GMO corn seed varieties.

Let’s not forget that in 2014 the company rejected a buyout offer by Longping High Tech valued at $25 per share. Obviously, Mr. Han thought the stock was cheap at that price.

So, he should have no problem showing us he is still confident that it’s still cheap at that price and at the current lower price, as the story has become infinitely more bullish, and certainly more so than it was in 2014.

Please sign this petition so Mr. Han and the Board of directors can see the importance of taking these actions for the sake of long-time and trusting investors in the company who have stood by Origin Agritech through the years, championing progress in the GMO and hybrid seed exploits in China.


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