LISHUI, China, May 10, 2022
/PRNewswire/ -- Farmmi, Inc. ("Farmmi" or the "Company") (NASDAQ:
FAMI), an agricultural products supplier in China, today provided a CEO update detailing
an extension of the proxy voting period to May 13, 2022 (www.transhare.com/farmmi) to better
accommodate shareholders and its progress on the Company's
expectations for increased growth and expanded opportunities. The
full text of the CEO letter follows:
May 10, 2022
Dear Shareholders,
Farmmi has continued to make steady progress on our business
diversification and growth, as we work to build on the Company's
rich 20 year history. Our brand remains strong and is recognized
with customers in the markets we serve worldwide as an industry
leading agricultural brand specializing in the production,
processing, marketing and research of edible fungi products.
We were not immune to the impact of the global pandemic and
ongoing shutdowns in China. But we
remained focused on serving our customers as we leveraged
investments in our field-to-table supply chain, with our increased
capacity, storage and shipping capabilities fortifying our
business. Customers appreciated our efforts and ability to reliably
deliver the high quality agriculture products they rely on our
company for. Our perseverance and commitment to our customers has
been rewarded many times over as evidenced by the steady pace of
new orders.
Our core business is strong, and we are very positive on the
growth prospects over the near and long-term. Demand for our edible
fungi continues to grow led by increased adoption by consumers
seeking healthy diets without sacrificing flavor. The pandemic has
served as an accelerator in many cases with consumers staying home
and learning to cook for the first time or seasoned chefs dusting
off their pans and re-engaging with their hobby. Both audiences
have been demand drivers and are expected to serve as growth
drivers to our business as we move through 2022.
While we are positive on the continued growth and success of our
core business, we are less satisfied with our pace of expansion in
the newer Health and Wellness business. In September 2021, we established four new
subsidiaries. Zhejiang Yitang Medical Service Co., Ltd., Zhejiang
Yiting Medical Technology Co., Ltd., Farmmi (Hangzhou) Health Development Co., Ltd., and
Zhejiang Farmmi Healthcare Technology Co., Ltd. We expect these new
subsidiaries to play an important role in our growth as we
accelerate development of Farmmi's new health and wellness
business.
The much larger scale of our strategic business plan and
ambition was seen in our November
2021 announcement to invest approximately RMB 509 million (approximately US$79.8 million) in another public company
serving China's large and
established medical and health industry. This would have been the
largest investment in our 20-year history. We had expected the
investment would close but it ultimately did not. This does not
change our plan to be aggressive or our commitment to diversify.
This just means we need another platform to accelerate our
multi-year growth opportunities in the segment, which we still view
as highly attractive, led by the aging population, which was
further amplified by the COVID-19 pandemic.
We are proud of our rigorous approach to M&A and our team's
evaluation of potential targets. Our objective is to ensure the
business fits our growth and profitability criteria, targeted
return on investment, is aligned with our stated long-term strategy
and serves as a platform we can leverage over both the near and
long-term. This process takes time, but we believe it will
ultimately lead us to the right opportunities, drive our broader
expansion and diversification and create significant value for
Farmmi and our shareholders over the coming years.
I noted in my last update that Farmmi was in an even stronger
position today than at any time in our history. That statement
remains true today. With improved financial results, a broader
product line, an even stronger balance sheet, and significantly
more meaningful long-term growth opportunities, Farmmi is on the
right path in the right markets with the right diversification and
growth strategy. Importantly, our previous capital raises have
given us the strong balance sheet needed to reach many of the goals
we have set for the near term.
Extending Proxy Voting Period to May
13, 2022
With all of that said, we appreciate the difficulty the pandemic
and stock market decline has posed for our shareholders. We have
been listening to your concerns and are fully committed to taking
the actions necessary to create greater value for all of our
shareholders. This is why we are extending the proxy voting period
to May 13, 2022. Shareholders were
given the opportunity to vote online, by fax or by email. Some
shareholders have expressed the desire to have more time to
complete this task. We listened and have extended the proxy
vote.
This is an important vote and the outcome will directly impact
both the Company and all shareholders. We strongly encourage all
shareholders to vote "FOR" the three resolutions. The first
two resolutions, which are related to the consolidation in the
Company's outstanding shares, will allow the Company to regain
compliance with The Nasdaq Capital Market's ("Nasdaq") minimum bid
price requirement set forth under Nasdaq Listing Rule 5550(a)(2).
The Company was previously granted an additional 180 calendar day
period for compliance under its minimum bid price requirement
through May 30, 2022. To regain
compliance with NASDAQ's minimum bid price requirement, the closing
bid price of the Company's ordinary shares needs to be at least
$1.00 per share or greater for at
least ten consecutive business days. The deadline for returning to
compliance is May 30, 2022.
We have evaluated other options but our management believes the
share consolidation is the only way to ensure we will be able to
regain compliance with the minimum bid requirement in the required
time. If shareholders approve this matter, we will immediately
begin the consolidations so that we can meet Nasdaq's requirement.
We believe that the lack of a positive outcome in passing the
resolutions being voted on would result in the shares of the
Company being delisted by Nasdaq. We do not view that as a positive
outcome as it would severely reduce shareholders participation in
the Company's future success. As a result, we ask all shareholders
to vote for the resolutions being proposed through email, fax or
online at www.transhare.com/farmmi.
While our progress has not yet translated into a higher
valuation for our ordinary shares, we are committed to building
value for our shareholders and will continue to work tirelessly on
your behalf given the opportunity. Our balance sheet is strong,
with our balance of net cash well exceeding our market
capitalization. We have listened and know this has not been an easy
period for shareholders. We appreciate and are thankful for your
support and look forward to building a greater future together.
Sincerely,
Ms. Yefang Zhang, Farmmi's
Chairwoman and CEO
About Farmmi, Inc.
Established in 1998, Farmmi Inc. (NASDAQ: FAMI) is an
agricultural products supplier, processor and retailer of edible
mushrooms like Shiitake and Mu Er, as well as other agricultural
products. In addition to its offline sales, Farmmi sells its
products direct-to-consumer at http://www.farmmi88.com. For further
information about the Company, please visit:
http://ir.farmmi.com.cn/.
Forward-Looking Statements
No statement made in this press release should be interpreted as
an offer to purchase or sell any security. Such an offer can only
be made in accordance with the Securities Act of 1933, as amended,
and applicable state securities laws. Certain statements in this
press release concerning our future growth prospects are
forward-looking statements regarding our future business
expectations and intended to qualify for the "safe harbor" under
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from those in such forward-looking statements. The risks and
uncertainties relating to these statements include, but are not
limited to, risks and uncertainties regarding lingering effects of
the Covid-19 pandemic on our customer's businesses and our end
purchaser's disposable income, our ability to raise capital on any
particular terms, fulfillment of customer orders, fluctuations in
earnings, fluctuations in foreign exchange rates, our ability to
manage growth, our ability to realize revenue from expanded
operation and acquired assets in China, our ability to attract and retain
skilled professionals, client concentration, industry segment
concentration, and general economic conditions affecting our
industry. Additional risks that could affect our future operating
results are more fully described in our United States Securities
and Exchange Commission filings. These filings are available at
www.sec.gov. Farmmi may, from time to time, make additional written
and oral forward-looking statements, including statements contained
in the Company's filings with the Securities and Exchange
Commission and our reports to shareholders. In addition, please
note that any forward-looking statements contained herein are based
on assumptions that we believe to be reasonable as of the date of
this press release. The Company does not undertake to update any
forward-looking statements that may be made from time to time by or
on behalf of the Company unless it is required by law.
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SOURCE Farmmi, Inc.