REG - Agronomics Limited - Issue of Performance Shares & Directors' Dealings

AgronomicsAnnouncement

25/04/2022 07:00

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RNS Number : 0987J  Agronomics Limited  25 April 2022

25 April 2022

 

Agronomics Limited (https://agronomics.im/)

("Agronomics" or the "Company")

Performance Shares issued to Shellbay Investments Limited

Directors' Dealings

 

Further to the publication by Agronomics Limited (the "Company") of its annual
results for the financial year to 30 June 2021 on 16 December 2021 (the
"Results"), the Company has resolved to issue 30,492,206 new ordinary shares
of the Company ("Fee Shares") to Shellbay Investments Limited ("Shellbay") in
settlement of the fees due to Shellbay under the Consultancy Agreement for the
period to 30 June 2021. The Fee Shares are issued at an implied price equal to
£0.2425 per Fee Share (in aggregate equal to £7,394,360), being the
mid-market price of Ordinary Shares of the Company at close of markets on the
last day of the relevant period, being 30 June 2021.

 

As announced in the Results, the fee due to Shellbay for the period to 30 June
2021 was reduced by £821,595 as a gesture of goodwill by Shellbay, being a
contribution by Shellbay towards the irrecoverable VAT potentially due on this
fee by the Company. Should the Company subsequently become registered for VAT
and be successful in reclaiming all or part of the VAT associated with the
consulting fee, then Agronomics undertakes to add an ex-gratia amount to the
next annual bill from Shellbay, equal to the pro rata part of the waived fee
relative to amount of VAT subsequently recovered by the Company.

 

Transfer of Fee Shares to Galloway Limited and Grant of Options over Fee
Shares by Shellbay

Shellbay is a company indirectly wholly owned by Mr James Mellon, a Director
of the Company. Immediately on receipt of the Fee Shares, Shellbay has agreed
to transfer 11,457,446 Fee Shares directly to Galloway Limited, the 100% owner
of Shellbay, and also indirectly wholly owned by Mr Mellon. Mr Denham Eke is
also a director of both Galloway and Shellbay.

In accordance with consulting and other incentive agreements agreed by
Shellbay it has granted options to acquire, for nil consideration, in
aggregate, 15,215,610 Fee Shares (the "Options") to certain of its management
and advisory consultants (the "Option Holders"), including an option over
853,781 Fee Shares to Mr Denham Eke, the Finance Director of the Company.
One-third of Options vest immediately, with one-third vesting on 30 June 2022
and the final third vesting on 30 June 2023. Up to 25% of the Options are
subject to claw-back by Shellbay.

Option Holders have elected to exercise Options, in aggregate, over 3,803,902
Fee Shares, and the transfer of these shares to relevant Option Holders shall
occur with immediate effect (of which Mr Eke shall receive 213,445 shares).

Following the transfer of the shares to Mr Mellon, and exercise of Options,
Shellbay shall hold, in aggregate, 15,230,856 Ordinary Shares of the Company,
of which 11,411,707 shares remain subject to the Options.

Following the transfer of shares to Galloway Limited, the grant of Options,
and the exercise of Options, the interests of the Directors in Ordinary Shares
is as set out below:

                  No. of Ordinary Shares  % of current issued Ordinary Shares
 Jim Mellon*      149,145,611             15.25%
 Richard Reed**   6,354,412               0.65%
 David Giampaolo  2,434,783               0.25%
 Denham Eke       213,445                 0.02%

 

*Jim Mellon is currently interested in a total of 149,145,611 Ordinary Shares.
133,910,950 are held by Galloway Limited and 15,234,661 are held by Shellbay,
companies which are both indirectly wholly owned by Jim Mellon, and 1,273,960
Ordinary Shares are held directly by Mr Mellon. Denham Eke is a director of
Galloway Limited and Shellbay Investments Limited.

 

** Richard Reed is currently interested in 6,354,412 Ordinary Shares held by
Reepa Limited. Reepa Limited is wholly owned by Richard Reed.

 

Terms of Shellbay engagement

Shellbay is not paid an annual consultancy fee (whether fixed or relating to
the net asset value of the Company's assets) but the Company shall reimburse
it for all reasonable and properly documented direct expenses incurred in
performing the services (including the direct costs of remunerating employees
and/or consultants).

As previously reported, Shellbay is 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 its engagement, aligning the
interests of Shellbay with those of the Company. 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 highest NAV per share reported at a financial year
end 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 issued share capital
at the end of the relevant period for the purposes of determining the 15% fee.

Further details regarding the terms of Shellbay's engagement by the Company
are set out in the announcement of the Company dated 6 May 2021.

Related Party Transaction

Mr Jim Mellon and Mr Denham Eke are Directors of the Company. Mr Mellon is
indirectly the sole owner of Shellbay. Mr Denham Eke is the sole director of
Shellbay.  The appointment of Shellbay as the Company's Advisory Consultant
(and the terms of Shellbay's appointment) constituted a related party
transaction at the time Shellbay was appointed, but the issue of the Fee
Shares to Shellbay in accordance with the terms of Shellbay's advisory
agreement is not a related party transaction pursuant to the AIM Rules for
Companies (the terms having previously been agreed and determined as being
fair and reasonable and in the best interests of all shareholders by the
independent directors of the Company).

Admission & Total Voting Rights

Application has been made for the 30,492,206 new Shares to be admitted to
trading on AIM ("Admission"), with Admission expected to occur on or around 29
April 2022. The new Shares will rank pari passu with the existing Shares,
including the right to receive all dividends and other distributions declared
after the date of their issue.

 Following the issue of the Fee Shares, the Company's total issued share
capital will comprise 977,946,666 Ordinary Shares, each with voting rights.
This figure may be used by shareholders as the denominator for the
calculations by which they will determine if they are required to notify their
interest in, or a change to their interest in, securities of the Company under
the Financial Conduct Authority's Disclosure and Transparency Rules.

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.

 

About Agronomics

Agronomics is a leading listed alternative proteins company with a focus on
cellular agriculture and cultivated meat. The Company has established a
portfolio of 21 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. A full
list of Agronomics' portfolio companies is available at https://agronomics.im/
(https://agronomics.im/) .

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$ 2 billion has been invested worldwide since the
industry's inception in 2016.

Contacts

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              Max Gould                 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

 

 

 

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