Last checked at 22 Dec 2023 11:10
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.
22 December 2023
SEED Innovations Limited
("SEED" or the "Company")
Investee Company Updates
SEED Innovations Ltd, the AIM-quoted company 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, is disappointed to note an update from portfolio company Northern Leaf plc ("Northern Leaf"), a Jersey based medical cannabis producer.
The Company also provides an update on Yooma Wellness Inc. ("Yooma").
Northern Leaf
By way of background, in April 2021 SEED invested a total of £600,000 via a convertible loan note in Northern Leaf as part of a pre-IPO funding round on the understanding that an IPO was achievable in the near-term. In April 2023, as part of a £3 million equity raise by Northern Leaf, this was converted into 1,236,331 preference shares, representing approximately 2.22% of Northern Leaf.
On 8 September 2023, SEED announced that Northern Leaf had raised a further at least £1 million of pre-IPO money for working capital purposes as it continued to work towards an intended IPO.
Unfortunately, Northern Leaf failed to successfully IPO the company during 2021/22 as intended, and poor public market conditions in 2023 have further worked against Northern Leaf's ambitions to complete an IPO thus far.
As a result, in the Company's interim results to 30 September 2023 announced on 22 November 2023, SEED subsequently reduced the carrying value of Northern Leaf by a little over half to £443,000 to reflect either the risk of an IPO at a lower price or indeed of a listing not progressing and the resultant pressures of raising further private funding as a result of poor public market conditions.
The Company has since been informed that Northern Leaf has completed an aggressive rights issue raising at a post-money valuation of £2.33M.
SEED did not participate in either the September or this latest round and following the transactions is advised it will be diluted to a 0.55% holding in Northern Leaf.
The Company has further reduced the carrying value of Northern Leaf to c.£13,000 to reflect the valuation inferred by this latest raise.
Commenting, Ed McDermott, CEO of SEED said:
"SEED invested in Northern Leaf in 2021 based on its promises of an imminent IPO. As investors ourselves, we understand as well as anyone how fundraising challenges and limited liquidity across the UK market have exerted significant pressure on companies attempting to come to market in the recent period. That said, we are extremely disappointed in Northern Leaf's founding management and their advisors in not taking advantage of what were clear opportunities during 2021 and early 2022 for a liquidity event. We are reviewing all our options, including seeking legal advice as appropriate."
Yooma Wellness Inc.
As anticipated, the Company has noted a filing by Yooma confirming that it has filed an assignment in bankruptcy pursuant to the Bankruptcy and Insolvency Act (Canada). As announced in the Company's interim results to 30 September 2023 announced on 22 November 2023, Yooma was already written down to zero.
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For further information on the Company please visit:££www.seedinnovations.co£ or contact:
?Ed McDermott Lance de Jersey | SEED Innovations Ltd | E:?info@seedinnovations.co? ? |
James Biddle Roland Cornish | Beaumont?Cornish?Limited, Nomad | T: (0)20 7628 3396 ? |
Isabella Pierre Damon Heath | Shard Capital Partners LLP Broker | T: (0)20 7186 9927 |
Catherine Leftley Ana Ribeiro Isabelle Morris
| St Brides Partners Ltd, Financial PR | E:?info@stbridespartners.co.uk |
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.