REG - Agronomics Limited - Interim Results
03/02/2022 07:00
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RNS Number : 5311A Agronomics Limited 03 February 2022
3 February 2022
Agronomics Limited
("Agronomics" or the "Company")
Unaudited Interim Results for the six-month period ending 31 December 2021
Agronomics Limited (AIM:ANIC), the leading listed company focused on the field
of cellular agriculture, is pleased to announce its unaudited interim results
for the six-month period ending 31 December 2021. A copy of these Interim
Results is available on the Company's website www.agronomics.im
(http://www.agronomics.im) .
Financial highlights
· The Company's Net Asset Value per Share on 31 December 2021 was 14.32
pence (30 September 2021: 12.99 pence) - an increase of 10.24%.
· Investment income, including loan interest and net unrealised gains
on investments, increased to £3,629,016 (2020: £510,635) during the
six-month period.
· Operating expenses were £806,030 (2020: £441,013), and mostly
comprised of professional fees relating to the investments acquired and the
fundraise completed during the period.
· A net profit of £2,523,407 (2020: loss of £1,447,306) was
recognised during the period.
· Invested assets at fair value increased to £60,878,486 (30 June
2021: £38,770,676), and cash and cash equivalents stood at £45,281,054 (30
June 2021: £62,436,497).
· Net assets increased to £134,340,730 at 31 December 2020 (30 June
2021: £100,029,816). The increase is principally due to a successful funding
round during December 2021, raising total net funds of £31 million and
issuing 138,368,193 new ordinary shares, and from unrealised gains on the
revaluation of investments held in Vitrolabs (£1.8 million) and Galy Co
(£1.5 million).
Investment highlights
· 21st July 2021 - portfolio company Shiok Meats Pte. Ltd, the
world's first cell-based crustacean meat company, raised a bridge funding
round. This brought Shiok Meat's total raised capital to US$ 30 million.
Agronomics holds 2,465 Series A Preferred Shares in Shiok Meats, representing
a 1.6% equity ownership on a fully diluted basis.
· 13th September 2021 - The Company's shares inFormo, Europe's
first cellular agriculture company developing cultivated dairy products, saw a
7.5x uplift on the original investment after a US$ 50 million Series A
financing. This represents an IRR of 225% and Agronomics will carry this
position on its balance sheet at €10.7 million (approximately £9.2
million).
· 20th September 2021 - Agronomics led cultivated leather
company VitroLab's Series A financing, with a US$ 7.0 million
investment. Agronomics holds an equity ownership of 14.65% on a fully diluted
basis and have the right to a board seat. Agronomics will carry this position
in its accounts at a book value of US$ 12.75 million including an unrealised
gain on cost of US$ 2.25 million and an IRR of 40%.
· 28th September 2021 - Portfolio company Simply Foods, Inc closed
a US$ 25 million Series A funding round. The Series A financing represents a
5.14x uplift on the original cash investment by Agronomics, with an IRR of
119%. Agronomics carries this position in its accounts at a book value of US$
3.60 million, including an unrealised gain on cost of US$ 2.90 million.
· 20th October 2021 - Agronomics led cultivated cocoa
company California Cultured's Seed round with a US$ 2.2 million
investment. The financing was in the form of a SAFER ("Simple Agreement for
Future Equity"). The SAFER is expected to convert into Preferred Stock of
California Cultured at a future equity financing round by California Cultured
of at least US$ 4 million, following which Agronomics would hold an
approximate equity ownership of 18.33% on a fully diluted basis.
· 26th October 2021 - Agronomics invested €3 million in Solar
Foods Oy, a company that produces protein using air-captured carbon dioxide
and electricity, in the form of a Convertible Loan Note. The CLN is expected
to give Agronomics an approximate equity ownership of 5.80%.
· 8th November 2021 - Agronomics invested US$ 8 million in The
EVERY Company, a commercial stage precision fermentation company focused on
the production of egg proteins, such as albumin.
· 19th November 2021 - Agronomics led cultivated beef
company Ohayo Valley's Pre-Seed round with a US$ 1.5 million subscription
Richard Reed, Chairman of Agronomics, commented: -
"The first half of the financial year has been both busy and very exciting.
Our current investment portfolio shows considerable promise for future growth,
given the scale of opportunity to invest in the nascent alternative foods
sector. We are expecting significant developments in a number of our
portfolio companies that should positively impact their valuation in the
coming months. The Board continue to seek new opportunities in line with its
Investing Policy, thereby creating value for shareholders."
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.
For further information please contact:
Agronomics Beaumont Cenkos Peterhouse Capital TB Cardew
Limited Cornish Limited Securities Plc Limited
The Company Nomad Joint Broker Joint Broker Public Relations
Richard Reed Roland Cornish Giles Balleny Lucy Williams Ed Orlebar
Denham Eke James Biddle Michael Johnson Charles Goodfellow Joe McGregor
+44 (0) 1624 639396 +44 (0) 207 628 3396 +44 (0) 207 397 8900 +44 (0) 207 469 0936 +44 (0) 20 7930 0777
info@agronomics.im +44 (0) 7738 724 630
agronomics@tbcardew.com
Chairman's statement
Introduction
I am pleased to present the Unaudited Interim Results for Agronomics Limited
(the "Company" or "Agronomics") for the six-month period ending 31 December
2021.
This half-year saw Agronomics focus on selective opportunities to deploy
capital within the field of cellular agriculture, which saw three new names
added to the portfolio. Agronomics now has 18 companies in its portfolio, with
broad diversification across the world's largest protein categories.
We define cellular agriculture as the direct production of agricultural
commodities without animals, but from living cells or single-celled organisms
completely disconnected from conventional agriculture. This encompasses cell
culture, including cultivated meat and seafood, precision fermentation -
including biomass and precision fermentation, and enabling technologies, such
as novel bioreactor designs and low-cost growth factor methodologies to
support the first two categories. These technologies aim to provide more
sustainable methods for the development of such products, reducing greenhouse
gas emissions, antibiotic requirements, land use, water use, energy use,
improving animal welfare and mitigating climate change. Agronomics now has
exposure across cultivated meat - chicken, beef, pork, cultivated leather,
cultivated cocoa and cotton, precision fermentation derived dairy and egg
proteins.
During the period, Agronomics led three deals in cellular agriculture:
cultivated leather company VitroLab's Series A financing, cultivated cocoa
company California Cultured's Seed round and cultivated beef company Ohayo
Valley's Pre-Seed round. It also saw The EVERY Company, a commercial stage
precision fermentation company focused on the production of egg proteins, such
as albumin, be added to the portfolio.
With the December 2021 financing completed, Agronomics has a very strong
balance sheet with approximately £74 million cash on hand to deploy into new
and existing opportunities. During 2021, US$ 2.4 billion was invested into the
sector, which was a significant increase from prior years. Last year, US$ 1
billion was raised by cultivated meat companies alone, and US$ 1.4 billion by
fermentation companies, seeing the largest amount of capital raised in any
single year. We are witnessing and supporting the sector's evolution to focus
on commercial scale-up, with many companies looking to establish their first
pilot facilities and seek regulatory approvals. It is now anticipated that the
next 12 months will be pivotal, with the first regulatory approvals for the
sale of its cultivated meat products in the US. Looking further out, China
also recently announced its five-year agricultural plan, referencing
cultivated meat for the first time.
In the last 6 months, the largest financing of a cultivated meat company was
achieved, with Israel based Future Meat Technologies raising a substantial US$
347 million Series B led by ADM Ventures. We also witnessed Upside Foods
unveil its 53,000 square ft facility in California, as well as recently
announcing the acquisition of a cultivated seafood company in the field,
Cultured Decadence. There have been three acquisitions in the sector to date.
JBS, the largest meat processing company in the world, also acquired Spanish
cultivated meat company Biotech Foods. Though this is the first acquisition by
a major conventional meat producer, we anticipate many more similar
acquisitions or collaborations with other giants in the protein supply chain.
Investment Review
During the period, the Company completed a number of acquisitions and a number
of investments had positive revaluations, as detailed below.
On 21st July 2021, portfolio company Shiok Meats Pte. Ltd ("Shiok Meats")
raised a bridge funding round from South Korean strategic investors Woowa
Brothers Asia Holdings and CJ CheilJedang Corporation, as well as Vietnamese
seafood exporter Vinh Hoan Corporation. Agronomics holds 2,465 Series A
Preferred Shares in Shiok Meats, representing a 1.6% equity ownership on a
fully diluted basis (excluding any shares to be issued pursuant to this debt
financing). This increased Shiok Meat's total raised capital to US$ 30
million.
On 13 September 2021, the Company participated in the US$ 50 million Series A
financing of Formo Bio GmbH ("Formo" formerly LegenDairy Foods GmbH), led by
EQT Ventures (http://www.eqtventures.com/) . Agronomics participated in the
round, subscribing for 1,186 Series A Preferred Shares, with a €3.15 million
investment. Agronomics now holds a total of 3,575 shares in Formo,
representing an equity ownership of 5.94% on a fully diluted basis. Agronomics
co-led Formo's €4 million Seed round in December 2019
(https://www.londonstockexchange.com/news-article/ANIC/investment-in-legendairy-foods-gmbh/14353180)
, with a €1 million investment for 2,389 Series Seed Preferred Shares, which
will see a 7.5x uplift on the original investment. This represents an IRR of
225% and, subject to audit, Agronomics will carry this position on its balance
sheet at €10.7 million (approximately £9.2 million), inclusive of the
Series A participation. This equates to an estimated portfolio weighting based
on the Company's last reported Net Asset Value of 9.1%.
Agronomics led VitroLabs Inc. ("VitroLabs") Series A funding round on 20th
September 2021, with a US$ 7.0 million investment, with the proceeds being
used to build and scale the world's first pilot production facility of
cultivated leather. Agronomics previously invested US$ 3.5 million in
VitroLabs via SAFEs and CLNs, which converted on completion of this funding
round. Agronomics holds an equity ownership of 14.65% on a fully diluted basis
and have the right to a board seat. Agronomics will carry this position in its
accounts at a book value of US$ 12.75 million, subject to audit, including an
unrealised gain on cost of US$ 2.25 million and an IRR of 40%. VitroLabs is
the Bay-Area-based biotechnology company focused on producing leather via its
innovative and unique cell culture process. Its technology encompasses
utilising a tissue engineering process to create genuine hides directly from
animal cells for leather products.
The global luxury leather goods market is a US$ 48 billion opportunity, and
VitroLabs is set to become the world's first company to commercialise
cultivated leather.
On the 28th September 2021, portfolio company Simply Foods, Inc., (trading as
"New Age Meats"), closed a US$ 25 million Series A funding round led by Hanwha
Solutions Corporation, a South Korean conglomerate. Agronomics first invested
in New Age Meats in July 2019
(https://www.lse.co.uk/rns/ANIC/investment-in-simply-foods-inc-new-age-meats-hrmdir431x2ucem.html)
, with a US$ 699,999 investment. The Series A financing represents a 5.14x
uplift on the original cash investment by Agronomics, with an IRR of 119%.
Subject to audit, Agronomics carries this position in its accounts at a book
value of US$ 3.60 million, including an unrealised gain on cost of US$ 2.90
million.
Agronomics led California Cultured Inc's ("California Cultured") Seed funding
round on the 20th October 2021, with a US$ 2.2 million investment. The
financing was in the form of a SAFER ("Simple Agreement for Future Equity").
Joining the round included global venture firm SOSV's IndieBio. The SAFER is
expected to convert into Preferred Stock of California Cultured at a future
equity financing round by California Cultured of at least US$ 4 million,
following which Agronomics would hold an approximate equity ownership of
18.33% on a fully diluted basis. Following the close of the round, Agronomics
has the right to a directorship in California Cultured. Should California
Cultured not complete a qualifying financing within 12 months the SAFER will
automatically convert into equity. California Cultured is a food-tech company
based in Davis, California, U.S., which harnesses cell culture technology to
produce cocoa products. The application of cellular agriculture for the
production of plants or plant-derived ingredients has to date not been
extensively commercialised. Using cocoa cell cultures to produce valuable
cocoa products, such as cocoa powder, chocolate, cocoa butter and flavanols is
considered an exciting opportunity.
On the 26th October 2021, Agronomics invested €3 million in Solar Foods Oy
("Solar Foods") in the form of a Convertible Loan Note ("CLN"). Also joining
the round were existing investors CPT Capital and Happiness Capital Limited
and new investor, LOSA Group. The CLN is expected to give Agronomics an
approximate equity ownership of 5.80%, inclusive of its prior investment
announced in September 2020
(https://www.londonstockexchange.com/news-article/ANIC/investment-in-solar-foods-eur-15million-financing/14671578)
. In the past year, Solar Foods has made strong R&D progress and is now
focused on building its new demonstration facility that is set to be
operational early 2023. Solar Foods' novel technology has recently been
recognised by NASA as part of their Deep Space Food Challenge - looking for
new solutions to feed astronauts.
Agronomics invested US$ 8 million in The EVERY Company ("EVERY", formerly
Clara Foods Co.) on the 4th November 2021 for an equity stake on a fully
diluted basis of 1.39%. This was part of an oversubscribed US$ 127.5 million
Series C Round by raising a total of US$ 175 million. Based on this revised
Series C Round its investment will equate to an interest of 1.28%. EVERY is a
leading precision fermentation company with a key focus on the
commercialisation of proteins traditionally derived from animals. Recently,
EVERY launched the world's first animal-free egg protein and collaborated with
the juice brand Pressed to produce smoothies containing their protein. This
recent fundraise will help drive the scale up of its animal-free protein
platform, so that EVERY's sustainable ingredients can have a worldwide reach.
On the 19th November 2021, Agronomics led Ohayo Valley Inc's ("Ohayo Valley")
Pre-Seed funding round with a US$ 1.5 million subscription in the form of a
Simple Agreement for Future Equity ("SAFE"). Ohayo Valley is a cultivated meat
company, initially focused on producing cultivated Wagyu ribeye steak, before
expanding to other beef products. Ohayo Valley was co-founded in 2020 by Dr
Jess Krieger. Combined, the co-founding team brings 20 years of experience in
the cultivated meat sector, including Jess' previous position as CSO for
Artemys Foods, where she led the development of the Artemys Burger prototype.
The SAFE is expected to convert into preferred shares in Ohayo Valley at a
future equity financing round of at least US$ 1.5 million, giving Agronomics
an approximate equity ownership of 18.75%. Agronomics will have the right to a
board seat.
Agronomics also disposed of two assets during the period. On the 29th
September 2021, Agronomics sold its entire holding of 23,147 shares in
Insilico Medicine, Inc for US$ 523,477 (£378,561), thereby representing an
IRR of 45%.
Agronomics also sold its entire holding of 40,000 shares in Oritain Global
Limited for NZ$ 1.36 million (approximately £0.7 million), representing an
IRR of 74%. The proceeds from these disposals will be used to provide further
funding for opportunities within the field of cellular agriculture, inclusive
of supporting existing companies, as well as identifying new opportunities.
Financial Review
The Company recorded a net profit for the period of £2,523,407 (2020: loss of
£1,447,306). During the six months, our investment income, including loan
interest and net unrealised gains, increased to £3,629,016 (2020: £510,635).
Operating expenses were £769,365 (2020: £430,180), with the increase due to
professional fees relating to the investments acquired and the fundraise
completed during the period. Following the fundraise, share issue commissions
of £43,600 were paid, which under IFRS have been capitalised to equity. No
performance fees were payable or accrued for the current period. The basic
profit per share was 0.33 pence (2020: loss of 0.62 pence), and the diluted
profit per share was 0.21 pence (2020: loss of 0.61 pence).
Our invested assets at fair value increased to £60,878,486 (30 June 2021:
£38,770,676), and cash and cash equivalents stood at £45,281,054 (30 June
2021: £62,436,497). Our net assets increased to £134,340,730 at 31 December
2021 (30 June 2021: £100,029,816). The increase is due to a fundraise
completed on 21 December 2021, issuing 138,368,193 new ordinary shares for
gross proceeds of £31,824,684, and unrealised gains on investments of
£3,492,270 recognised during the period. As a result, the net asset value per
share at 31 December 2021 is 14.32 pence, being 14% higher than at 30 June
2021 (12.51 pence).
Financing
During the 6 months to 31st December 2021, the Company successfully completed
a funding round, raising gross proceeds of £31,824,684 and issuing
138,368,193 new Ordinary Shares. Following share issue commissions and
professional fees, net cash proceeds of approximately £31 million were
retained by the Company. These funds, together with existing cash resources,
will be utilised to provide funding for opportunities within the field of
cellular agriculture, inclusive of supporting existing companies, as well as
identifying new opportunities.
Approach to Risk and Corporate Governance
"The Company's general risk appetite is a moderate, balanced one that allows
it to maintain appropriate growth, profitability and scalability, whilst
ensuring full corporate compliance."
The Group's primary risk drivers include: -
Strategic, Reputational, Credit, Operational, Market, Liquidity, Foreign
Exchange, Capital and Funding, Compliance and Conduct.
Our risk appetite has been classified as high under an "impact" matrix defined
as Zero, Low, Medium and High. Appropriate steps have been taken and adequate
controls implemented to monitor the risks of the Company, and the appropriate
committees and reporting structures have been established, which under the
Chairmanship of the Chairman, will monitor risks facing the Company. Further
details of the Corporate Governance Statement, including the role and
responsibilities of the Chairman and an explanation as to how the QCA Code has
been applied, will be found on pages 7 to 10 of the audited 30 June 2021
Financial Statements, which are on the Company's website at www.agronomics.im
(http://www.agronomics.im) .
At the General Meeting of the Company on 16 April 2019, shareholders adopted a
new Investing Policy, which includes the following:
''The Company will invest in opportunities within the Life Sciences sector,
concentrating on, but not being limited to, environmentally friendly
alternatives to the traditional production of meat and plant-based nutrition
sources ("Clean Food"). The Company will focus on investments that provide
scalable and commercially viable opportunities."
Under our valuation policy, it is not possible to reflect significant uplifts
between valuation events such as a new third party funding, and therefore the
Board believes that the stated NAV per share may not fully represent the
current intrinsic value of the portfolio companies given their continuing
progress and the comparable valuations we see for these types of companies in
this rapidly growing sector.
Further details of the new Investing Policy can found on the Company's website
at www.agronomics.im (http://www.agronomics.im) .
Strategy and Outlook
The first half of the financial year has been both busy and very exciting. Our
current investment portfolio shows considerable promise for future growth,
given the scale of opportunity to invest in the nascent alternative foods
sector. We are expecting significant developments in a number of our
portfolio companies that should positively impact their valuation in the
coming months. The Board continue to seek new opportunities in line with its
Investing Policy, thereby creating value for shareholders.
Richard Reed
Chairman
2 February 2022
Condensed statement of comprehensive income
For the period ended 31 December 2021
Period Period
ended ended
31/12/2021 31/12/2020
Notes (unaudited) (unaudited)
£ £
Income
Net income from financial instruments at fair value through profit and loss 2
3,492,270 479,010
──────── ────────
3,492,270 479,010
Operating expenses
Directors' fees (36,667) (10,833)
Other operating costs 4 (769,363) (430,180)
Unrealised foreign exchange losses (299,579) (1,516,928)
──────── ────────
Profit/(loss) from operating activities 2,386,661 (1,478,931)
Interest received 2 136,746 31,625
──────── ────────
Profit/(loss) before taxation 2,523,407 (1,447,306)
Taxation - -
──────── ────────
Profit/(loss) for the period 2,523,407 (1,447,306)
Other comprehensive income - -
──────── ────────
Total comprehensive profit/(loss) for the period 2,523,407 (1,447,306)
══════ ══════
Basic profit/(loss) per share (pence) 5 0.33 (0.62)
Diluted profit/(loss) per share (pence) 5 0.21 (0.61)
The Directors consider that the Company's activities are continuing.
Condensed statement of financial position
As at 31 December 2021
31/12/2021 30/06/2021
Notes (unaudited) (audited)
£ £
Current assets
Financial assets at fair value through profit or loss 6 60,878,486 38,770,676
Trade and other receivables 7 29,892,027 445,667
Cash and cash equivalents 45,281,054 62,436,497
──────── ────────
Total assets 136,051,567 101,652,840
════════ ════════
Equity
Share capital 937 799
Share premium 123,065,776 91,278,407
Share reserve 7,394,360 7,394,360
Accumulated earnings 3,879,657 1,356,250
──────── ────────
Total equity 134,340,730 100,029,816
Current liabilities
Trade and other payables 8 1,710,837 1,623,024
──────── ────────
Total liabilities 1,710,837 1,623,024
──────── ────────
Total equity and liabilities 136,051,567 101,652,840
════════ ════════
These interim financial statements were approved by the Board of Directors on
2 February 2022 and were signed on their behalf by:
Denham Eke
Director
Condensed statement of changes in equity
For the period ended 31 December 2021
Share Share Retained (loss)/earnings
capital premium £ Total
£ £ £
Balance at 01 July 2020 331 19,080,138 336,409 19,416,878
(audited)
Total comprehensive loss for the period - - (1,447,306) (1,447,306)
Issue of shares 168 10,050,474 - 10,050,642
Share issue costs capitalised - (265,635) - (265,635)
──────── ──────── ──────── ────────
Balance at 31 December 2020 (unaudited)
499 28,864,977 (1,110,897) 27,754,579
══════ ═══════ ════════ ══════
Share Share Share reserve Retained earnings
capital premium £ £ Total
£ £ £
Balance at 01 July 2021
(audited) 799 91,278,407 7,394,360 1,356,250 100,029,816
Total comprehensive profit for the period - - - 2,523,407 2,523,407
Issue of shares 138 31,830,969 - - 31,831,107
Share issue costs capitalised - (43,600) - - (43,600)
────── ──────── ─────── ──────── ────────
Balance at 31 December 2021 (unaudited) 937 123,065,776 7,394,360 3,879,657 134,340,730
══════ ════════ ═══════ ════════ ════════
Condensed statement of cash flows
For the period ended 31 December 2021
Period Period
ended ended
Notes 31/12/2021 31/12/2020
(unaudited) (unaudited)
£ £
Cash flows from operating activities
Profit/(loss) for the period 2,523,407 (1,447,306)
Purchase of investments (19,423,481) (9,647,469)
Proceeds from sale of investments 696,456 91,092
Interest received - non-cash (134,052) (31,625)
Unrealised gains on investments 2 (3,492,270) (479,010)
Unrealised foreign exchange losses on investments 245,537 1,469,538
─────── ───────
Operating loss before changes in working capital (19,584,403) (10,044,780)
Change in trade and other receivables 378,324 (4,065)
Change in trade and other payables 87,813 176,439
─────── ───────
Net cash flows from operating activities (19,118,266) (9,872,406)
═══════ ═══════
Cash flows from financing activities
Proceeds from issue of shares 2,006,423 9,855,460
Share issue commissions paid (43,600) (265,635)
─────── ───────
Net cash flows from financing activities 1,962,823 9,589,825
═══════ ═══════
Decrease in cash and cash equivalents (17,155,443) (282,581)
Cash and cash equivalents at beginning of period 62,436,497 2,789,097
─────── ───────
Cash and cash equivalents at the end of period 45,281,054 2,506,516
═══════ ═══════
1 Significant accounting policies
Agronomics Limited (the "Company") is a company domiciled in the Isle of Man.
The address of the Company's registered office is 18 Athol Street, Douglas,
Isle of Man, IM1 1JA.
The unaudited condensed financial statements of the Company (the "Financial
Information") are prepared in accordance with Isle of Man law and
International Financial Reporting Standards ("IFRS") and their interpretations
issued by the International Accounting Standards Board ("IASB") and adopted by
the European Union ("EU"). The financial information in this report has been
prepared in accordance with the Company's accounting policies. Full details of
the accounting policies adopted by the Company are contained in the financial
statements included in the Company's annual report for the year ended 30 June
2021 which is available on the Group's website: www.agronomics.im
(http://www.agronomics.im)
The accounting policies and methods of computation and presentation adopted in
the preparation of the Financial Information are consistent with those
described and applied in the financial statements for the year ended 30 June
2021. There are no new IFRSs or interpretations effective from 1 July 2020
which have had a material effect on the financial information included in this
report.
The unaudited condensed financial statements do not constitute statutory
financial statements. The statutory financial statements for the year ended 30
June 2021, extracts of which are included in these unaudited condensed
financial statements, were prepared under IFRS as adopted by the EU. The
auditors' report on those financial statements was unmodified.
The preparation of the Financial Information requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses. Actual
results could differ materially from these estimates. In preparing the
Financial Information, the critical judgements made by management in applying
the Company's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the financial statements as
at and for the year ended 30 June 2021 as set out in those financial
statements.
The Financial Information is presented in Great British Pounds, rounded to the
nearest pound, which is the functional currency and also the presentation
currency of the Company.
2 Net income from financial instruments at fair value
through profit and loss
31/12/2021 31/12/2020 31/12/2019
(unaudited) (unaudited) (unaudited)
£ £ £
Net unrealised gains on investments 3,492,270 479,010 84,262
Other income 136,746 31,625 -
─────── ─────── ───────
Total investment income 3,629,016 510,635 84,262
═══════ ═══════ ═══════
3 Performance fee
31/12/2021 31/12/2020
(unaudited) (unaudited)
£ £
Performance fee - -
═══════ ═══════
Shellbay Investments Limited ("Shellbay") receives performance fees for the
provision of Jim Mellon as Director of the Company. Shellbay shall be entitled
to an annual fee equal to the value of 15% of any increase between the
Company's net asset value ("NAV") on a per issued share basis at the start of
a reporting period and 30 June ("Closing NAV Date") each year during the term
of the New Shellbay Agreement, with the first reporting period being from 1
July 2020 to 30 June 2021, and annually thereafter. The opening and closing
NAV for each period will be based on the audited financial statements of the
Company for the relevant financial year, with the opening NAV for each
reporting period being the higher of (i) 5.86 pence per share (the highest
annual audited NAV per share since the Company adopted its current investment
policy and reported NAV per share in September 2019), and (ii) the highest NAV
per share reported at a Closing Date for the previous reporting periods during
the term of the agreement (establishing a rolling high-watermark for Shellbay
to qualify for such fee). Any increase in NAV per share will then be applied
to the total issued share capital at the end of the relevant period for the
purposes of determining the 15% fee. Any change in NAV per share that arises
from funds raised at a premium or discount to the existing NAV per share will
therefore be considered for the purposes of calculating Shellbay's fee by
reference to the annual audited accounts (for clarity being an increase in
respect of a premium and a decrease in respect of a discount).
At the election of the Company, the Shellbay fee shall be payable either in
whole or in part by the issue of new shares at a price equal to the mid-price
on the last day of the relevant Qualifying Period (being the Company's
accounting year from 1 July to 30 June) or grant of nil price warrants over
shares; or in cash; or (with the agreement of Shellbay), in cash-equivalents
(such as shares), and other assets held by the Company
No fees were payable or accrued for the current period (31 December 2020:
£nil). See note 9 for further details.
4 Other operating costs
31/12/2021 31/12/2020 31/12/2019
(unaudited) (unaudited) (unaudited)
£ £ £
Auditors' remuneration 51,149 17,500 9,500
Insurance 9,031 4,158 3,544
Professional fees 577,849 360,136 518,388
Sundry expenses 131,334 48,386 31,350
─────── ─────── ───────
Total other costs 769,363 441,013 577,782
═══════ ═══════ ═══════
The Company has no employees other than the
Directors.
5 Basic and diluted profit per share
The calculation of basic profit per share of the Company is based on the
profit for the period of £2,523,407 (31 December 2020: loss of £1,447,306)
and the weighted average number of shares of 763,671,848 (31 December 2020:
231,939,864) in issue during the period.
Diluted profit per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares such as warrants and options. The calculation of
diluted profit per share of the Company is based on the profit for the period
of £2,523,407 (31 December 2020: loss of £1,447,306) and the diluted
weighted average number of shares of 1,199,151,684 (31 December 2020:
234,466,498) in issue during the period.
6 Financial assets at fair value through profit or loss
During the previous financial year, the Company established a new wholly owned
subsidiary entity, Agronomics Investment Holdings Limited ("the Subsidiary" or
"AIHL"), which now holds the majority of the portfolio of unquoted investments
previously held directly by the Company. Unquoted investments were transferred
by the Company into AIHL at their respective carrying amounts. The investment
in subsidiary is stated at fair value through profit or loss in accordance
with the IFRS 10 Investment Entity Consolidation Exception. The fair value of
the investment in Subsidiary is based on the period-end net asset value of the
Subsidiary. Additions and disposals regarding the investment in subsidiary are
recognised on trade date.
31/12/2021 30/06/2021
(unaudited) (audited)
£ £
Quoted 360,442 656,502
Unquoted 2,646,684 59,704
Investment in subsidiary 57,871,360 38,054,470
─────── ───────
60,878,486 38,770,676
═══════ ═══════
The composition of the investments held, both directly and indirectly through
the Subsidiary in the underlying portfolio, is as follows:
31/12/2021 30/06/2021
(unaudited) (audited)
£ £
Equities 50,282,538 28,349,567
Convertible loan notes and SAFEs* 10,595,948 10,421,109
─────── ───────
60,878,486 38,770,676
═══════ ═══════
* A SAFE is a Simple Agreement for Future Equity. SAFE Agreements have similar
characteristics to Convertible Loans and are designed to provide an early
investor with an "edge" ahead of a larger planned funding. The edge is
typically conversion of funds advanced for new equity at a discount to the
subsequent raise.
7 Trade and other receivables
31/12/2021 30/06/2021
(unaudited) (audited)
£ £
Trade and other receivables 29,892,027 445,667
══════ ══════
As stated in the Chairman's statement, the Company completed a fundraise on
21 December 2021, issuing 138,368,193 new ordinary shares for gross proceeds
of £31,824,684. As at 31 December 2021, £29,824,546 of the fundraise
proceeds were due to be received by the Company.
8 Trade and other payables
31/12/2021 30/06/2021
(unaudited) (audited)
£ £
Provision for audit fee 25,000 37,797
Other provisions - 2,203
Trade creditors 206,965 104,152
Provision for irrecoverable VAT 1,478,872 1,478,872
────── ──────
1,710,837 1,623,024
══════ ══════
9 Related party transactions
Under an agreement dated 1 December 2011, Burnbrae Limited, a company related
to both Jim Mellon and Denham Eke, provide certain services, principally
accounting and administration, to the Company. This agreement may be
terminated by either party on three months' notice. The Company incurred a
total cost of £18,000 (31 December 2020: £18,000) during the period under
this agreement of which £6,000 was outstanding as at the period end (30 June
2021: £68).
Under an updated agreement dated May 2021, Shellbay Investments Limited, a
Company related to both Jim Mellon and Denham Eke, provide the services of Jim
Mellon as Director of the Company. No fees were payable or accrued for the
current period (31 December 2020: £nil). See note 3 for further details.
In accordance with the Company's published investment strategy, Jim Mellon may
co-invest alongside the Company in certain investments and, accordingly, he
has direct and indirect interests in other investments held by the Company.
10 Commitments and contingent liabilities
There are no known commitments or contingent liabilities as at the period end.
11 Events after the reporting date
To the knowledge of the Directors, there have been no material events since
the end of the reporting period that require disclosure in the condensed
interim financial statements.
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