Seed Innov Regulatory News (SEED)

13 March 2024

SEED Innovations Limited

("SEED" or the "Company")

Investee Company Update: Northern Leaf

SEED Innovations Ltd, the AIM-quoted investment company providing shareholders with exposure to early-stage health, wellness, and medical cannabis companies to which in normal circumstances they have limited access to, notes that its portfolio company, Northern Leaf plc ("Northern Leaf"), a Jersey based medical cannabis producer, has announced the signing of binding heads of terms for an all-share merger with Voyager Life plc ("Voyager"), a Scottish health and wellness group formulating, manufacturing and supplying high-quality Cannabidiol, hemp seed oil and hemp-related products.

The Company owns 1,236,331 ordinary shares in Northern Leaf representing c.0.55% of Northern Leaf's issued share capital. As at the last balance sheet date, the Company's interest in Northern Leaf was valued at £444,000 (as at 30/9/2023), subsequently revalued to £13,000 per the Company's RNS of 22 December 2023. Based on the terms of the merger as outlined below, SEED would carry its interest in Voyager at c.£5,000 based on the preliminary consideration; such interest to be held in Voyager shares traded on the Aquis Stock Exchange.

The following excerpt from the announcement, which was released by Voyager publicly on the Aquis Stock Exchange is set out without any material changes.

Voyager Life plc

Proposed merger with Northern Leaf

Voyager, the health and wellness group formulating, manufacturing and supplying high-quality Cannabidiol (CBD), hemp seed oil and hemp-related products, is pleased to announce that it has signed heads of terms with Northern Leaf plc ("Northern Leaf") for a merger of the two companies (the "Merger").

The Merger would value the enlarged group at in excess of £5 million, based on Voyager's current share price of 11 pence and assuming that the deferred consideration is settled in full. The deferred consideration is described in more detail below and, at its upper end, is based on potential revenues by Northern Leaf of over £5 million by no later than 31 March 2025.

Based in Jersey, Channel Islands, Northern Leaf is a cultivator and processor of pharmaceutical-grade medical cannabis flower. The Merger will be effected through the acquisition of the entire issued capital of Northern Leaf in consideration by the issue of new Voyager ordinary shares ("New Voyager Shares"). The transaction will create the first vertically integrated cannabis company in the British Isles with both pharmaceutical and health & wellness operations. From its two bases in Scotland and Jersey, the enlarged group will have multiple revenue streams and will comprise:

· 100,000 square feet of state-of-the-art indoor growing facilities

· GACP and GMP accredited facility

· Pharmaceutical customers in the UK and overseas

· VoyagerCann's manufacturing facility - both Voyager products and white label

· Three consumer brands - Voyager, Ascend Skincare and Infused Amphora

· Retail through online portals and Voyager's three own stores

· Wholesale of health & wellness products throughout the UK

Terms of the Merger

The Merger comprises a total consideration of up to 33,900,000 New Voyager Shares and includes a preliminary element, a loyalty element, and deferred performance-based consideration:

(i) Preliminary consideration: 10,000,000 New Voyager Shares issued pro rata to shareholders of Northern Leaf

(ii) Loyalty consideration: up to 2,000,000 New Voyager Shares issued to shareholders of Northern Leaf who remain on the shareholder register for six months after completion in proportion to their current shareholdings in Northern Leaf

(iii) Deferred consideration: up to 21,900,000 New Voyager Shares issued pro rata to shareholders of Northern Leaf subject to Northern leaf achieving annual revenues by no later than 31 March 2025 of:

· not less than £2.0 million - 10,950,000 New Voyager Shares

· more than £5.0 million - a further 10,950,000 New Voyager Shares 

New Voyager Shares will vest on a straight line basis for revenue in between the £5.0 million upper and £2.0 million lower limits.

Voyager announcement Ends

The announcement in full can be accessed from the following link: https://www.aquis.eu/stock-exchange/announcements/4513123

-Ends-

For further information on the Company please visit: www.seedinnovations.co or contact: 

Notes

Seed Innovations Ltd

SEED Innovations is an AIM quoted investment company focused primarily on disruptive high growth life sciences and technology businesses particularly within the medical cannabis arena. The Company's strategy is to identify early-stage opportunities that have an upcoming investment catalyst and grow its portfolio in terms of value whilst limiting the number of investee companies to a level where relevant time can be devoted to each.

About Northern Leaf Limited

Northern Leaf is a medical cannabis cultivator based in Jersey that, in December 2020, was granted the first UK commercial high THC medical cannabis license since UK based GW Pharmaceuticals (NASDAQ:GWPH) in 1998. The Company is leading the development of a new industry for the British Isles, creating centres of excellence, using state-of-the-art tracking systems and robust policies and procedures to ensure the highest levels of quality from seed to sale.

With a secure operational facility already built in Jersey where the favourable climate and sunshine hours contribute to a comparably lower cultivation cost, Northern Leaf will grow commercial quantities of medical cannabis for the rapidly growing European market, including the key markets of the UK, Germany, and Israel. For more information about Northern Leaf, please visit https://www.northern-leaf.com/.