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(Sharecast News) - Medical cannabis investor Seed Innovations said on Tuesday that its portfolio company Avextra has raised €7.4m from existing investors, via a secured convertible loan note.
The AIM-traded firm said that following the fundraise, its holding in Avextra on a fully-diluted basis was 7.48%, adding that it did not participate in the fundraise.
It noted that the fundraise took Avextra's total raised in 2022 to date to €11.8m.
The note would be convertible at a 20% discount to a future fundraise, or at maturity on 31 January 2024 at the same valuation as the previous fundraise, being a 62% premium to Seed's initial investment.
It said the inferred value in the carrying value of Seed's holding in Avextra remained at €5m.
The fundraise would be used to support Avextra's launch in Germany, research and development activities including the start of clinical studies, as well as furthering the expansion of its Portugal operations.
Seed said the €7.4m was raised from existing shareholders, including institutional investor Iberis Bluetech Fund.
"Seed is pleased to share the news of a significant €7.4m fundraise by investee company Avextra, despite the widely-reported poor market conditions for raising money," said chief executive officer Ed McDermott.
"The large quantum of the fundraise, and the terms it has been raised on, is a testament to the confidence investors have in Avextra's future."
McDermott said Germany remained the largest European medical cannabis market, adding that it was showing "excellent growth" in patient numbers and total market revenues.
"We continue to see strong progress from Avextra, in both operational breakthroughs, its vertically integrated production capabilities and its increased sales of its 'made in Germany' medical cannabis product range, and with further significant funding now secured, Avextra is very well capitalised for future growth."
At 1124 BST, shares in Seed Innovations were up 2.04% at 2.5p.
Reporting by Josh White at Sharecast.com.
