Agronomics Regulatory News (ANIC)

14 August 2023

Agronomics Limited

("Agronomics" or the "Company")

Clean Food Group Announces Successful £2.3 Million Pre-Series A Financing Round with Strategic Investors

Agronomics (ANIC:LSE), the leading listed company focused on the field of cellular agriculture, is pleased to announce that the Company has invested £0.7 million in fermentation-derived palm oil company Clean Food Group Limited ("CFG"), as part of their £2.3 million Pre Series A funding round, subscribing for 4,249,700 ordinary shares (the "Subscription"). Notable co-investors include industrial food specialists Doehler Group and Alianza Team. The investment was made using cash from the Company's own resources.

Jim Mellon, Executive Director of Agronomics and Co-Chairman of CFG also participated in the funding round with a £50,000 investment on the same terms. AIM traded SEED Innovations Limited, of which Jim Mellon has a 6.95% holding, also invested in the round on identical terms.

Agronomics previously invested £900,500 in CFG in June 2022. In total, Agronomics will now hold 30.31% of the equity capital on a fully diluted basis. Subject to audit, Agronomics will carry this position in its accounts at a book value of £6.97 million, including an unrealised gain on cost of £5.37 million, an IRR of 385% and a MOIC of 3.92x. The holding in CFG will represent approximately 4.33% of the last published Net Asset Value of the Company (30.06.23), including estimated post-balance sheet date adjustments.

● CFG produces palm oil using a non-GMO microorganism which is already being used on an industrial scale in the wine industry meaning that the regulatory pathway in the UK and EU is anticipated to be less stringent.

● Capital raised from this pre-series round will enable CFG to accelerate the scale-up of its technology platform, ahead of the planned completion of its Series A funding next year to further develop its technology for production at a commercial scale, with the funds supporting the construction of a new manufacturing facility in the UK.

Jim Mellon, Executive Director of Agronomics and Co-Chairman of CFG, commented:

"Agronomics' portfolio speaks to the breadth of disruption emerging from biomanufacturing on conventional agriculture and beyond. This fundraise marks an important milestone for Clean Food Group in the mission to drive transformative changes across the food industry by providing an alternative to palm oil in food and cosmetic production. This funding takes CFG a step closer to commercialisation as we continue to unlock the potential for a future where our food choices will be more sustainable."

Since this Subscription is considered a Substantial Transaction under AIM Rule 12, this announcement requires certain disclosures under Schedule Four. CFG is an early-stage company with no revenues with operating costs of approximately £0.1 million per month, and total assets as at 31 December 2022 of £1.6 million, including cash or near cash of £1.3 million with no material liabilities.

The full announcement is set out below without any material changes:

UK food-tech business Clean Food Group announces additional £2.3m funding to scale operations in advance of Series A

£10m of funding to date to develop Company's sustainable oils and fats technology

Industrial giants Doehler Group and Alianza Team invest and confirm strategic collaborations

London, 14 August 2023: Pioneering UK-based biotech business Clean Food Group has announced a further £2.3 million in funding to accelerate the commercialisation of its sustainable oils and fats technology. International investment has come from industrial food specialists Doehler Group and Alianza Team as the global food industry looks to invest in healthier and more sustainable food choices for future generations. Agronomics, the leading listed investment company focussed on Cellular Agriculture, and SEED Innovations Ltd, the AIM-listed fund focused on investments in global health opportunities, have also shown their continued support and participated in the latest funding round.

Capital raised from this funding will enable Clean Food Group to accelerate the scale-up of its technology platform while advancing critical regulatory and commercial pathways. Clean Food Group expects to complete a Series A funding in 2024, by which time the business will have validated the technology at a commercial scale and have a clear line of sight to near term revenue generation. The business will raise funds at Series A to support the build out of a commercial scale manufacturing facility.

In addition to the collaboration agreement with Alianza Team, announced by the Company on 8 August 2023, Clean Food Group also recently signed a services agreement with Doehler Group, designed to rapidly scale its fermentation process to a commercial level, and enable the manufacture of product batches required for regulatory approval for Cosmetics and Food applications. The scale-up process with Doehler is now well advanced, with a successful fermentation run at 1,000 litres recently completed; the manufacture of product batches for the regulatory approvals will be completed later this year.

Additionally, in 2023, Clean Food Group strengthened its Operational team with the hires of Dr. James Mercer, Head of Manufacturing and Scale-up, and Andrea Cattaruzza as Head of Product. James will be responsible for the scale-up of the Company's technology and brings over 25 years of experience in industrial fermentation and scale-up of alternative proteins, having previously held senior operational roles at Quorn, Croda, and DuPont, amongst others. Andrea brings 30 years of experience from Mars Global Chocolate, most recently as Director of Science. Andrea will drive Clean Food Group's product strategy, developing high performance, sustainable ingredients for commercial partners.

Clean Food Group Co-founder and CEO Alex Neves says, "We are delighted with the rapid progress the business has made in the past year. The successful conclusion of this current funding round validates the important strides our business is taking in solving critical sustainability and supply chain challenges facing our food and cosmetic manufacturer customers. We are now in a great position to validate our technology at a commercial scale, advance our regulatory pathways and develop our growing list of commercial partners in advance of our Series A next year".

Clean Food Group's technology platform is the result of eight years of pioneering research led by Professor Chris Chuck, Technical Lead at Clean Food Group. The proprietary technology platform uses proven, scalable yeast strains and fermentation technology and uses food waste as its food source to deliver sustainable alternatives to traditional oil and fat ingredients. 

About Clean Food Group

Clean Food Group is a UK-based food-tech business delivering sustainable oils and fats solutions to the world's food and cosmetics manufacturers, with the mission to deliver scalable, healthier, competitively priced ingredients that have a positive impact on the economic, environmental, and social health of the planet.

Clean Food Group is founded by a team with key experience in growing bio-tech, food industry and retail businesses supported by established venture capital and family office investors with a track record supporting fast-growth start-up companies in highly regulated industries. Clean Food Group's proprietary technology platform has been developed as a result of 8 years of pioneering research by Professor Chris Chuck, technical lead at Clean Food Group, and the University of Bath.

About Agronomics

Agronomics is the leading listed venture capital firm with a focus on cellular agriculture. The Company has established a portfolio of over 20 companies at the Pre-Seed to Series C stage in this rapidly advancing sector. It seeks to secure minority stakes in companies owning technologies with defensible intellectual property that offer new ways of producing food and materials with a focus on products historically derived from animals. These technologies are driving a major disruption in agriculture, offering solutions to improve sustainability, as well as addressing human health, animal welfare and environmental damage. This disruption will decouple supply chains from the environment and animals, as well as being fundamental to feeding the world's expanding population.

About Cellular Agriculture

Cellular Agriculture is the production of agriculture products directly from cells, as opposed to raising an animal for slaughter or growing crops. This encompasses cell culture to produce cultivated meat and materials, and fermentation processes that harness a combination of molecular biology, synthetic biology, tissue engineering and biotechnology to massively simplify production methods in a sustainable manner.

Over the coming decades, the source of the world's food supply traditionally derived from conventional agriculture is going to change dramatically. We have already witnessed the first wave of this shift with the consumer adoption of plant-based alternative proteins but today, we are on the cusp of an even bigger wave of change. This is being facilitated by advances in cellular agriculture. This change is necessary, given scientists' claims that if we maintain existing animal protein consumption patterns, then we will not meet the Paris Agreement's goal of limiting warming to 1.5℃.

AT Kearney, a global consultancy firm, projects that cultivated meat's market share will reach 35% by 2040. This combined with the Good Food Institute's estimate that a US $1.8 trillion investment will be required in order to produce just 10% of the world's protein using this technology, means that we are on the cusp of a multi-decade flow of capital to build out manufacturing facilities. Funding in the field of cellular agriculture is accelerating, however, still, less than US$ 5 billion has been invested worldwide since the industry's inception in 2016.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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