REG - Seed Innovations Ltd - Interim Results
12/12/2022 17:30
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RNS Number : 4422J Seed Innovations Limited 12 December 2022
Seed Innovations Ltd / AIM: SEED / Sector: Closed End Investments
12 December 2022
SEED Innovations Limited ("SEED" or the "Company")
Interim Results
SEED Innovations Ltd, the AIM quoted company investing in fast growing and
industry leading businesses with a focus on the medical cannabis, health, and
wellness space, is pleased to announce its interim results for the six months
ended 30 September 2022.
A copy of this announcement and the Interim Results will be available on the
Company's website, www.seedinnovations.co (http://www.seedinnovations.co/) .
HIGHLIGHTS
· Further development of portfolio in the period with a focus on
providing exposure to disruptive growth opportunities that would normally be
inaccessible to private investors, with medical cannabis, health, and wellness
at the core
· Well positioned to benefit from the long-term potential of the
medical cannabis industry, which we continue to support, and other emerging
growth markets, despite recent worldwide geopolitical and economic events
· Disposal of legacy holding in Leap Gaming to IMG Arena US, LLC., post
period end and conditional upon regulatory approvals, generating approximately
€5.9 million cash over two-year period, increasing our cash position for
further investments in time
· Continued to invest in disruptive growth opportunities that would
normally be inaccessible to private investors, including a recent investment
in Clean Food Group
Progress from investee companies:
· Little Green Pharma has continued its global expansion strategy with
early penetration into key future markets with limited supply options:
o Significant supply partnerships made with Cannamedical, Demecan and with
Ilios Santé, following its global expansion strategy with key future markets:
o Record quarterly revenue to 30 September 2022 reported of AU$4.9 million and
cash receipts of AU$4.4 million
· Eurox rebranded to Avextra:
o Raised €4.4 million from new and existing investors at an approximate 62%
premium to its July 2021 fundraise in which SEED previously invested
o Post period end in October 2022, Avextra successfully completed a €7.4
million fundraise
· Invested a further £50,000 in SWB, by way of a three-year, 8%
Convertible Loan Note, and agreed to extend the terms to 16 January 2023 of a
£150,000 CLN that came up for maturity in October 2022
· Progress made by Juvenescence by way of a new joint venture with the
formation of Selah Therapeutics Limited in collaboration with the Buck
Institute for Research on Ageing
· Several operational updates made by NASDAQ listed Portage Biotech
including an agreement to acquire Tarus Therapeutics, a clinical trial
collaboration agreement with Merck and a collaboration with Intensity
Therapeutics
· Positive developments in investments outside of the cannabis sector
including a further £125,000 investment in Clean Food Group, a UK-based
cellular agriculture company focused on the commercialisation of palm oil by
fermentation
For further information on the Company please
visit: www.seedinnovations.com (http://www.seedinnovations.com/) or
contact:
Ed McDermott SEED Innovations Ltd E: info@seedinnovations.co (mailto:info@seedinnovations.co)
Lance de Jersey
James Biddle Beaumont Cornish Limited, T: (0)20 7628 3396
Roland Cornish Nomad
Isabella Pierre Shard Capital Partners LLP T: (0)20 7186 9927
Damon Heath Broker
Catherine Leftley St Brides Partners Ltd, E: info@stbridespartners.co.uk (mailto:info@stbridespartners.co.uk)
Isabelle Morris Financial PR
Max Bennett
CHAIRMAN'S STATEMENT
2022 has been one of the most testing periods for a considerable time with
persistent challenging headwinds from global economic and political
instability, rising inflation and interest rates, as well as volatile global
stock markets. Combined, this is impacting the current appetite for public
markets, and investor activity across all sectors has remained poor. Most
sectors are failing to deliver on investor expectations, and Venture Capital
investors have had a very tough twelve months as price pressure globally has
seen a marked decrease in values almost across the board.
All this being said however, even in these difficult times we continue to
develop our portfolio by focusing on our core objective of providing investors
with exposure to disruptive growth opportunities that would normally be
inaccessible to private investors, with medical cannabis, health, and wellness
at the core. We are optimistic for the New Year as we end 2022 with a diverse
portfolio of innovative companies, that if successful could have a positive
and lasting impact on people and the planet alike while proving to be
profitable investments for Seed Innovations.
Our portfolio comprises small cap companies, many of which are not listed.
Naturally this increases the risk of investment as well as its potential
future volatility. What is particularly challenging is that, inevitably, small
start-up companies do not have the depth of resources of their larger peers to
manage and report on their company. This means that often they rely on a small
team led by an entrepreneur which increases the risk of a skills gap within
management as the company develops. With SEED's collective experience and
skillset, we work with these companies to chart their path to a successful
liquidity event wherever we can.
We continue to be a firm believer in investing in the health and wellness
space, including medical cannabis and CBD. With our access and network in the
sector, we are well positioned to capitalise on future growth in the short,
medium, and long term, whilst continuing to seek investments in other
disruptive technologies that we believe will create shareholder value such as
Clean Food Group, our new portfolio company, which we invested in during the
period.
On 7 December, we announced the potential disposal of our legacy holding in
Leap Gaming ("Leap") (Fralis LLC) to IMG Arena US, LLC. Post completion this
will generate approximately €5.9 million to us in cash over two years. We
had been pursuing a liquidity event for Leap over the last 3 years, but the
worsening equity market conditions and macroeconomic factors made it clear
that this was not going to materialise in any sensible time frame. While the
eventual proceeds are less than we had hoped, after several years of a
strategic partnership between Leap and IMG, this deal is the natural next step
in the development of Leap's product. The divestment importantly means that
SEED is not committed to continually fund a company which does not align with
our current investment preference and the proceeds of the sale will provide us
with additional funds to invest in other projects where we see better
opportunity.
We have continued to support our existing medical cannabis portfolio
companies. As the cannabis sector matures, I remain confident of the
opportunities which companies in the sector present to investors, despite
investor sentiment and share price value not currently reflecting the growth
opportunity that the cannabis market represents, particularly in Europe. For
instance, Germany continues to be the largest European medical cannabis
market, larger than all others combined. Imports of medical cannabis into
Germany have almost doubled year on year from 2017 to 2021 and are expected to
be worth over €840 million by 2024. Whilst the medical cannabis industry
continues to be impacted by worldwide geopolitical and economic events, we
believe in the long-term potential of this emerging sector and remain focused
on providing investors with exposure to selective, disruptive growth
opportunities that would otherwise be inaccessible.
A key investment for SEED is ASX listed company Little Green Pharma ('LGP'),
which has made strides in advancing its global expansion strategy with early
penetration into key future markets with limited supply options. This period
saw LGP add several supply deals to its portfolio: including a supply
agreement with Cannamedical and an offtake agreement with Demecan in Germany,
representing an annual revenue opportunity of approximately AU$9 million (€6
million) post ramp-up for its Danish facility, further showcasing the
viability and the quality of its products.
The company also entered into a two-year AU$2 million medicinal cannabis
supply agreement with Ilios Santé in Germany, to purchase a guaranteed annual
quantity of a high-THC white-label medicinal cannabis flower product being
developed by LGP. LGP has demonstrated its ability to grow in all aspects of
its European strategy from cultivation, production, manufacturing, and
distribution; further consolidating LGP's growing industry reputation as one
of the leading global pure-play medicinal cannabis suppliers operating in
Europe. SEED is pleased to see LGP recently reporting ever-growing patient
numbers, sales, and new market entries, achieving a record quarterly revenue
to 30 September 2022 of AU$4.9 million and cash receipts of AU$4.4 million.
Our only frustration being that LGP's progress has not been reflected in its
share price performance, but we firmly believe they have the foundations in
place to be a long-term player as the industry continues to mature.
During the period Eurox rebranded to Avextra. Our investment in Avextra
provides us with exposure to the largest European medical cannabis market and
continues to show excellent growth in patient numbers and total market
revenues. Avextra continues to make encouraging progress as it broadens its
revenue streams and generates sales in segments of the medical cannabis market
with high-entry barriers. A demonstration of the strength of this company is
that it successfully completed a €7.4 million fundraise in October via a
secured convertible loan note.
We made a further investment in South West Brands ('SWB'), the female-led
multi-brand consumer goods group focusing on the health & wellness
segment. SWB utilises plant ingredients including CBD to create unique and
efficacious products. Earlier this year the company launched two new brands to
market: FEWE and LoveMeMeMe in prominent retailers such as Superdrug stores
and online at ASOS. In August we invested a further £50,000 by way of a
three-year, 8% Convertible Loan Note ('CLN'). More recently, SEED agreed to
extend the terms of an earlier £150,000 CLN, due to mature in October 2022,
to 16 January 2023.
Yooma Wellness Inc, a company whose strategy is to become a vertically
integrated global leader in the manufacturing, marketing, distribution, and
sale of wellness products, including hemp seed oil and hemp-derived
cannabinoid ingredients, has continued to see a disappointing share price
performance. However, we remain quietly optimistic about its recently reported
acquisitions.
We recently invested in Clean Food Group, a biotech company focused on
cellular agriculture and the commercialisation of bio-equivalent palm oil
production by fermentation. Cellular agriculture, and the innovative nature of
CFG's yeast technology, produces cultivated, sustainable alternatives to palm
oil and soy protein, and will, we believe, play a major part within the
cultivated food industry as the sector endeavours to minimize its global
environmental footprint. SEED invested a further £125,000, during the period,
which is in line with our investment strategy of diversification by investing
in the life science and biotech sectors alongside the medical cannabis sector.
CFG recently announced a partnership with Doehler Ventures, the venture arm of
Doehler Group GmbH ("Doehler"), who are focused on early-stage start-ups in
the Nutrition & Technology ecosystem. For a young company, CFG's
opportunity to be involved with Doehler, an influential and global producer,
marketer and provider of technology-driven natural ingredients and systems,
represents a key milestone and could potentially drive the next uplift in
valuation of CFG as it moves to demonstrating a commercially scalable
production methodology.
We have seen positive progress by NASDAQ listed Portage Biotech Inc.
('Portage') as it continues to advance a pipeline of operational and clinical
developments. Portage acquired four best-in-class assets targeting the
adenosine pathway as a result of an acquisition of Tarus Therapeutics. SEED
anticipates further progress as the excellent Portage team continues with its
strategy to identify and efficiently develop novel opportunities to improve
the landscape of immuno-oncology treatment for patients with cancer.
In May of this year, Juvenescence, a longevity biotech, and life sciences
company, entered into a new venture with the formation of Selah Therapeutics
Limited in collaboration with the Buck Institute for Research on Ageing, to
focus on developing first-in-class novel ketone-based therapies. Also, through
its JuvLife Division, the company invested in Chrysea Labs, a synthetic
biology company developing high-value and difficult to source natural
products. Post period end the Company announced a Series C fund raise which,
market conditions allowing, will be its last raise prior to a public listing.
In contrast, the education technology company and legacy investment, Vemo
Education, has faced several well publicised regulatory and political hurdles
which will likely result in the company ceasing to trade. The board of SEED
wrote the remaining value down to nil in March 2022.
Finally, following the restructuring of a legacy investment, Inveniam has
agreed to a strategic partnership with Apex Group Ltd., a global financial
services provider, to offer Valuation-as-a-Service to clients worldwide. The
partnership will allow a wide range of institutional investors and family
offices to use Inveniam.io's patented blockchain technology to provide greater
trust and efficiency to private asset valuations.
Results
The net asset value of the Company at 30 September 2022 was £16,689,000 (31
March 2022: £20,461,000), equal to net assets of 7.84p per Ordinary Share (31
March 2022: 9.62p per Ordinary Share).
Looking to the months ahead, I firmly believe that SEED is now in a position
to expand and balance the liquidity of our portfolio. Bear market conditions
often provide opportunities for nimble companies to make acquisitions at
prices which offer excellent long-term value. Despite the macroeconomic
challenges, we continue to work to increase shareholder value by investing in
disruptive technologies, particularly in the life sciences, biotech, health,
and wellness industries (including cannabis) where we see value.
I do not believe that the current share price reflects the true value of the
Company, it remains, in my opinion, significantly undervalued by the market.
We believe that taking a 5% stake in Clean Food Group at the founders and seed
round levels demonstrates the boards commitment to making sure that our
current and future investors are getting the earliest stage investment
exposure possible in ventures they would be unlikely to be presented with were
it not for a vehicle like SEED. This is one of the key reasons for SEED's very
existence; to provide all investors with opportunities that are usually
reserved for very high net worth investors only.
Upon completion of the sale of Leap, SEED will be in a strong cash position to
make more such investments.
Ian Burns
Non-Executive Chairman
12 December 2022
Report of the Chief Executive Officer
For the period ended 30 September 2022
The continuing inflation shock, combined with recent domestic and geopolitical
instability and central banks raising rates, have impacted investor sentiment,
with investors looking particularly at growth stocks valuations more
sceptically and some moving away from their riskiest positions, particularly
in the technology market. This in turn has impacted valuations across many
small cap sectors and which we expect may take some further time to recover.
I believe firmly that the macroeconomic back drop provides SEED with a great
opportunity to take advantage of more realistic venture valuations. We are
committed to investing in companies where we can add value as a key driver,
and where the cutting-edge businesses we invest in are supported by
entrepreneurs who truly care about the future. This is clearly highlighted by
our most recent investment in Clean Food Group which aims to play a major part
within the cultivated food industry as the sector endeavours to minimize its
global environmental footprint.
With the highly experienced and well-connected team at SEED, we remain
dedicated to supporting the continued growth of our investee companies, while
delivering on our strategy of providing access to investment opportunities in
sectors often inaccessible to the smaller investor. We continue to see a
number of interesting investment opportunities across a number of themes where
we have previously made very strong investment returns while entertaining
new sectors that very much fit within our investment strategy.
The net asset value of the Company at 30 September 2022 was £16,689,000 (31
March 2022: £20,461,000), equal to net assets of 7.84p per Ordinary Share (31
March 2022: 9.62p per Ordinary Share).
The table below lists the Company's holdings at 30 September 2022 and 31 March
2022.
Country of Incorpor- Portfolio % of Net Asset Value Number of Shares Held at 30 September 2022 Valuation at Number of Shares Held at Valuation at 31 March
Holding Inv. Category ation 30 September 31 March 2022
Type 2022 2022 £'000
£'000
Fralis LLC All Gaming Nevis 31.24% Equity, 5,214 Equity 8,270
(Leap Gaming) CLN & Loan & CLN
Yooma Equity CBD Canada 0.26% 4,427,609 43 4,427,609 351
Wellness Inc Wellness
Juvenescence Equity Biotech/ Isle of 16.99% 128,205 2,835 128,205 2,410
Healthcare Man
Limited
Portage Equity Biotech/ BVI 1.38% 37,623 230 50,123 251
Healthcare
Biotech Inc.
Little Green Equity Biotech/ Australia 6.39% 7,324,796 1,067 7,324,796 2,028
Healthcare
Pharma
Inveniam Capital Equity Fintech USA 3.96% 8,681 661 8,681 562
Partners
Avextra Pharma Equity Biotech/ Germany 26.58% 5,142 4,436 5,142 4,281
GmbH Healthcare
Northern Leaf CLN Biotech/ Jersey 4.14% - 691 - 660
Healthcare
Ltd
Clean Food Equity Food England 3.51% 5,850,000 585 4,600,000 46
Technology
Group Limited
South West CLN CBD England 3.25% - 543 - 476
Wellness
Brands
CiiTECH CLN CBD England 0.08% - 13 - 188
Wellness
Limited
Vemo Equity Edtech USA - 1,000,000 - 1,000,000 -
Education, Inc.
Total Investment Value 16,318 19,524
Cash and receivables, net of payables and accruals ________937
371
20,461
Net Asset Value
16,689
Liquid Investments
Yooma Wellness Inc. ('Yooma')
Yooma is an emerging global marketer and distributor of cannabinoid and
hemp-derived wellness products, whose mission is to become a
vertically-integrated global leader in the manufacturing, marketing,
distribution, and sale of wellness products, including hemp seed oil and
hemp-derived and cannabinoid ingredients. The company leverages strategically
curated sales channels and ecommerce networks to deliver a diverse mix of
wellness products through operating subsidiaries in the United States, United
Kingdom, France and Japan.
Yooma has since announced its interim financial statements for the three-month
period ended 30 September 2022, which showed revenues up 14% in Q3 over the
same period last year to US$2.4 million. The increase in revenues year-on-year
has been predominantly as a result of the effect of M&A activity as well
as acquisitions completed by Yooma in the second half of 2021, including most
notably the acquisitions of Vitality CBD in the UK and of Vertex Co., Ltd. in
Japan.
Despite the Company's belief that the current price is well below the
underlying value, very low trading volumes have impacted general valuation
multiples negatively, as has poor sector sentiment, which continues to have a
downward impact on SEED's NAV.
Portage Biotech, Inc ('Portage')
NASDAQ listed Portage Biotech Inc., is an emerging clinical-stage
biotechnology company developing an immunotherapy-focused pipeline to improve
patient lives and increase survivability by avoiding and overcoming cancer
treatment resistance. Its focus is to combine its own technology with already
proven immune-boosting PD1 agents and to this end, Portage has a pipeline of
products targeted for clinical testing and a growing roster of notable
partnerships. Portage's portfolio consists of five diverse platforms,
leveraging delivery by intratumorals, nanoparticles, liposomes, aptamers and
virus-like particles. Within these five platforms, Portage has 10 products
currently in development with multiple clinical readouts expected over the
next 12-24 months.
Portage continues to execute on its core business model whilst enhancing its
value proposition and pipeline with its recent transactions. Early in the
reporting period, Portage presented data at the American Association for
Cancer Research (AACR) 2022 Annual Meeting discussing its work with the
potential of STING-based therapies, in collaboration with Stimunity, an
early-stage biotech company.
Portage also shared preliminary data from the Phase ½ trial of PORT-2, an
invariant natural killer T cell (iNKT) agonist for patients with melanoma and
non-small cell lung cancer (NSCLC), at the 2022 American Society of Clinical
Oncology meeting. Portage also presented three posters on INT230-6 (PORT-1) in
collaboration with Intensity Therapeutics. In September, Portage announced
that it is focusing research and development priorities on converting their
investigator-initiated PORT-2 study into a company-sponsored study and
launching their company-sponsored adenosine trial (PORT-6 and PORT-7) in the
U.S., Portage has subsequently provided updated data support the proof of
concept of using an iNKT agonist monotherapy (PORT-2) to induce immune
response for patients with refractory NSCLC and melanoma.
In July, Portage signed an agreement to acquire Tarus Therapeutics, a private
company developing adenosine receptor antagonists, as it follows its own
development strategy to identify and efficiently develop novel opportunities
to improve the landscape of Immuno-oncology treatment for patients with
cancer. As a result of the transaction, Portage has acquired four
best-in-class assets targeting different aspects of the adenosine pathway, and
is now in a unique position to evaluate the role of adenosine in cancer and
other diseases.
In recent months, Portage announced a clinical trial collaboration agreement
with Merck which will evaluate PORT-2 in combination with KEYTRUDA®
(pembrolizumab) for the treatment of patients with front-line as well as
refractory non-small cell lung cancer.
Little Green Pharma ('LGP')
Little Green Pharma is an ASX-Listed vertically integrated medicinal cannabis
business with operations from cultivation and production through to
manufacturing and distribution. During the period, LGP made large strides
advancing its global expansion strategy with early penetration into key future
markets with limited supply options.
LGP has seen strong progress as it fast-tracks its European growth strategy of
partnering with quality global distribution partners to gain market share in
Europe, notable progress in the period under review included:
· Signed an offtake agreement with long-standing foundation
distribution partner Demecan in Germany, representing an annual revenue
opportunity of approximately AU$9 million (€6 million) post ramp-up for its
Danish facility.
· Signed a two-year AU$2 million medicinal cannabis supply agreement
with Ilios Santé in Germany, to purchase minimum annual quantities of a
high-THC white-label medicinal cannabis flower product being developed by LGP.
The Agreement represents continued validation of LGP's key strategy of
developing bespoke, high-value white label strains for export to lucrative
jurisdictions.
· Appointed highly regarded former Director of Public and Regulatory
Affairs at Bayer Spain, Ms. Beatriz Vicen Banzo, as independent non-executive
director.
· During the quarter to 30 September 2022, LGP achieved record
quarterly revenue of AU$4.9 million and cash receipts of AU$4.4 million.
Revenue growth was driven by a 40% increase in flower sales in Australia
(AU$1.6 million) (unaudited) and a 25% increase in Australian flower sales
into Germany and the United Kingdom (AU$0.5 million) (unaudited) over the
previous quarter, while oil sales into Australia increased by 10% to AU$2.6
million (unaudited) over the same period.
· Achievements made within the reporting period further consolidates
LGP's growing industry reputation as one of the leading global pure-play
medicinal cannabis suppliers operating in Europe.
Post period end, LGP has partnered with German cannabis pioneer Cannamedical
for the supply of bulk medicinal cannabis from Denmark to Germany, with a
potential value of over AU$4.5 million (€3 million) over two years, the
fourth medicinal cannabis supply agreement with key wholesalers and
distributors in Germany that LGP has announced in 2022.
As announced on 2 November, LGP has also raised AU$4 million from new and
existing investors along with on a AU$2 million Share Purchase Plan for
eligible shareholders that will close 19 December 2022. Funds will be used for
operational expenses and accelerating European and Australian sales.
We believe that LGP is undervalued relative to its peers and that the
management continue to make positive steps forward and the business strategy
is aligned with our own views for future success.
Fralis LLC (trading as Leap Gaming - 'Leap')
Leap is a B2B developer and provider of high-end 3D gaming applications and
products with a focus on virtual sports and virtual casino, partnering with
top-tier online and land-based gaming companies to provide advanced gaming
products for end-users worldwide. Leap is licensed by the MGA and currently
holds gaming licenses obtained in Sweden, the Netherlands, Romania, South
Africa and Greece.
SEED has invested a total of approximately £4.92 million in Leap (comprised
of a mix of equity, convertible loan notes and the term loan detailed
below).
On 7 December 2022, shareholders of Leap entered into a conditional Share
Purchase Agreement ('SPA') for the sale of the entire issued share capital of
Leap to IMG Arena US, LLC ('IMG') based upon an enterprise value of €14
million (the 'Leap Transaction').
The price will be adjusted for both working capital and repayment of debt
(including both the term loan of €250,000 advanced by SEED (see announcement
of 8 June 2022) (the 'Term Loan') and a further bridging loan of €500,000
advanced by IMG to provide Leap with working capital through to completion.
Completion is subject to receipt by Leap of regulatory approvals required from
various Gambling Commissions (including the United Kingdom and Malta). This
regulatory review process will take some months and the parties are currently
estimating it may be late Q1 or early Q2 2023 before the transaction can be
confirmed
SEED currently estimates that the consideration at completion will be in the
region of €12.9 million. Of this SEED expects to receive approximately
€5.6 million, payable €2.8 million upon Completion and €2.8 million on
the 12-month anniversary of Completion.
In addition, SEED will also receive repayment of its €250,000 Term Loan plus
accrued interest upon Completion.
The expected total blended return on investment over all of the Leap
investments is disappointing at approximately 4%, albeit this is skewed by
losses made on units purchased at high prices in 2018 (when the Gaming market
was trading strongly). By comparison, the more recent CLNs acquired by
SEED's current management in 2020 & 2021 will return approximately 36%
(being an expected €1M against a cost of €733K).
Juvenescence Ltd ('Juvenescence')
Juvenescence is a life sciences company developing therapies and consumer
products to modify and support heathy aging focused on improving and extending
human lifespans. By utilising a coalition of best scientists, physicians, and
investors across its four divisions, it aims to create cutting-edge therapies
and products that disrupt the thinking and behaviour around ageing.
Juvenescence has a broad portfolio of products in development and is driving
innovation amongst two divisions: JuvTherapeutics- Focused on traditional
prescription medicines to modify aging and prevent diseases, and JuvLife-
Consumer products that manage aging and help increase health span.
In May, the company announced a new joint venture with the formation of Selah
Therapeutics Limited in collaboration with the Buck Institute for Research on
Ageing, to focus on developing first-in-class novel ketone-based therapies for
chronic diseases of ageing of which our first therapeutic focus is heart
disease with secondary interests in neurological diseases.
Within the reporting period, Juvenescence, through its JuvLife Division,
invested in Chrysea Labs, a synthetic biology company developing high-value
and difficult to source natural products, using proprietary synthetic biology
platforms alongside investors including 200M Fund Portfolio, managed by Banco
Português de Fomento. Juvenescence and Chrysea will collaborate to develop
and commercialise one of Chrysea's products.
Southwest Brands ('SWB')
South West Brands Limited is a London-based, pioneering multi-brand consumer
goods group focusing on the health & wellness segment, utilising plant
ingredients (including CBD) to create unique and efficacious products.
In August 2022, SEED made a further investment of £50,000, by way of a three
year, 8% Convertible Loan Note ('CLN') in South West Brands Limited. This was
part of a larger funding round by SWB to raise up to a maximum of £1,000,000,
of which £570,000 has been secured. More recently, SEED agreed to extend the
terms to 16 January 2023 of a £150,000 CLN that came up for maturity in
October 2022.
Seed continues to see progress by SWB since launching its two own brands
(LoveMeMeMe and FEWE) in prominent retailers such as Superdrug stores and
online at ASOS earlier in the year. The Company will continue to support the
SWB team as they build a sustainable and scalable wellness business developing
while supporting the SWB's omnichannel approach to commercialising their
brands.
Northern Leaf Ltd ('Northern Leaf')
Northern Leaf is focused on becoming a key player in the European medical
cannabis supply chain, having already built a secure operational facility in
Jersey. Northern Leaf is leading the development of a new industry for the
British Isles, using state- of-the-art tracking systems and robust policies
and procedures to ensure the highest levels of quality from seed to sale.
Northern Leaf have continued to make good progress across key areas of the
business. On the operations side, progress continues towards the second
validation batch and the company are in the final stages of preparation for
both the GACP and EU-GMP audits. Achieving both GACP and EU-GMP accreditations
will be significant milestones for the Northern Leaf business.
Vemo Education ('Vemo')
VEMO is an education technology company founded to address the student debt
crisis by developing income share agreement ('ISA') programmes and deferred
tuition plans and partnering with higher education institutions to make these
funding options available to students.
As previously reported, Vemo has faced a number of significant issues
including encountering political and regulatory head-winds within the
controlled sector. Again, SEED do not expect to recoup any more of our
investment in Vemo and consequently wrote the value down to nil in March 2022,
with the expectation that the company may well fail in the near future.
Avextra ('Avextra') (formally Eurox Group GmbH)
Avextra is a German-based, vertically integrated medical cannabis company
focused on intensifying its investment in pharmaceutical development
internationally while maintaining the highest European pharmaceutical quality
standards to expand its Avextra-branded pharmaceutical products.
Eurox rebranded to Avextra to emphasise its clear focus on the highest quality
cannabis extracts and its commitment to the development of evidence-based
cannabis medicines. Following its successful launch of its own-brand
'made-in-Germany' products in August 2021 (see SEED RNS of 17 August 2021),
Avextra continues to prioritise its medical cannabis range and crucially its
distribution channels while remaining focused on innovation and product
development, which has seen revenues gradually increasing as multiple supply
agreements were signed (as reported in SEED RNS announcements of 2 November
2021, and 12 and 13 January 2022).
In April 2022, Avextra raised a total of €4.4 million from new and existing
investors at an approximate 62% premium to its July 2021 fundraise in which
SEED previously invested approximately €3 million. SEED invested c. €176k
in this round. Post period end, Avextra announced a further €7.4 million
fundraise via a secured convertible loan note which will be used to support
Avextra's launch in Germany, R&D activities including the start of
clinical studies, as well as furthering the expansion of their Portuguese
operations.
SEED's holding in Avextra was valued at €5 million (£4.4 million) as at 30
September 2022, an increase of 62% compared like for like with the holding as
at 30 September 2021. We remain enthusiastic about the prospects for the
holding and, through our supervisory board seat, we look forward to adding
further value in 2023.
CiiTECH Limited ('CiiTECH'
CiiTECH is an established research-led cannabis healthcare company. It uses
its partnerships with leading institutions and scientists to create consumer
focused brands, the company is dedicated to ongoing cannabis research and the
commercialisation of cannabis products and the best science-led brands
As reported at the time of SEED's Annual Report, discussions regarding a
planned reverse takeover by Fragrant Prosperity Holdings Limited ceased in
March 2022, primarily as a result of movements in equity capital markets
driven by geopolitical instability. The SEED management have been closely
watching developments and the performance of the business continues to be
poor. Despite management downsizing capital expenditure, CiiTECH is likely to
need further funding in the near term. Given recent uncertainty for
fundraisings and therefore the potential ongoing viability of the company as a
result, the Company has written down the value of the holding substantially
but will continue to monitor.
Inveniam Capital Partners ('Inveniam')
Inveniam is a private Fintech company which built Inveniam.io, a powerful
technology platform that utilises big data, AI and blockchain technology to
provide surety of data and high-functioning use of that data in a distributed
data ecosystem. Inveniam has built Inveniam.io, the data operating system for
delivering access, transparency, and trust in the value and performance of
private market assets.
Within the reporting period the leading financial technology company entered
into a strategic partnership with Apex Group Ltd. a global financial services
provider, to offer Valuation as a Service to clients worldwide. Through the
partnership, Inveniam and Apex Group will use Inveniam's patented blockchain
technology and the Inveniam.io data operating system to deliver digitally
credentialed, higher-functioning private asset data for more consistent, fully
auditable valuations. The partnership will allow a wide range of institutional
investors and family offices to use Inveniam.io's patented blockchain
technology to provide greater trust and efficiency to private asset
valuations.
Clean Food Group Limited ('CFG')
Clean Food Group is a UK-based cellular agriculture company focused on the
commercialisation of palm oil by fermentation and bringing sustainable,
cultivated foods to market, initially in the UK and Europe. CFG are developing
a sustainable yeast technology that produces cultivated, sustainable
alternatives to palm oil and soy protein, two ingredients in food and
cosmetics with currently massive and still growing demand and negative
environmental impact. Clean Food Group operates within the fast-developing
cultivated food industry, a market with significant opportunities driven by
global, environmental, health and animal welfare concerns about existing and
future consumption levels of animal protein and other foods such as palm oil.
SEED invested a total of £171,000 into CFG. The investment was made in two
parts, firstly £46,000 for 4.6 million shares was invested in a seed round in
March 2022 and a further £125,000 for 1.25 million shares has now been
invested in the "Friends & Family" funding round which raised a further
£1.65 million and was led by Agronomics Limited, the AIM traded alternative
proteins company with a focus on cellular agriculture and cultivated meat. CFG
recently announced a partnership with Doehler Ventures, the venture arm of
Doehler Group GmbH ("Doehler"), who are focused on early-stage start-ups in
the Nutrition & Technology ecosystem. This partnership with Doehler
Ventures further highlights CFG's opportunity as a disruptive food-tech
business bringing sustainable, cultivated foods to market.
SEED's investment into CFG fits within the Company's policy of investing in
the life science and biotech sectors. As CFG matures it should provide
steady news flow that should resonate with SEED investors and the market, this
investment also brings with it further diversification to SEED's current
portfolio.
Ed McDermott CEO
12 December 2022
CONDENSED HALF-YEARLY STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
01 April 2022 to 01 April 2021 to
30 September 30 September
2022 2021
(unaudited) (unaudited)
Notes £'000 £'000
Net realised (loss)/gain on disposal of financial assets at fair value through
profit and loss 5 4 (1,930)
Net unrealised (loss)/gain on revaluation of financial assets at fair value
through profit and loss 5 (3,536) 762
Interest income on financial assets at fair value through profit and loss 41 45
Total investment (loss)/income (3,490) (1,123)
Other income
Arrangement fee
9 -
Total other income 9 -
Expenses
Directors' remuneration and expenses 12 (173) (200)
Recognition of Directors share based expense 12 (16) (16)
Legal and professional fees (40) (118)
Other Expenses (80) (65)
Administration fees (24) (48)
Adviser and broker's fees (46) (57)
Total expenses (379) (504)
Net (loss)/profit before losses and gains on foreign currency exchange (3,860) (1,627)
Net foreign currency exchange gains/(loss) 72 25
Total comprehensive (loss)/gain for the period/year (3,788) (1,602)
(Loss)/earnings per Ordinary share - basic and diluted 7 (1.78p) (0.75p)
The Company has no recognised gains or losses other than those included in the
results above.
All the items in the above statement are derived from continuing operations.
The accompanying notes form an integral part of these unaudited condensed
half-yearly financial statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
30 September 2022 31 March 2022
(unaudited) (unaudited)
Notes £'000 £'000
Non-current assets
Financial assets at fair value through profit or loss 5 16,318 19,524
16,318 19,524
Current assets
Cash and cash equivalents 360 922
Other receivables 30 57
390 979
Total assets 16,708 20,503
Current liabilities
Payables and accruals (19) (42)
(19) (42)
Net assets 16,689 20,461
Financed by
Share capital 11 2,127 2,127
Employee stock option reserve 228 212
Other distributable reserve 14,334 18,122
16,689 20,461
Net assets per Ordinary share - basic and diluted 10 7.84 9.62
The financial statements were approved by the Board of Directors on 12
December 2022 and were signed on their behalf by:
Ian
Burns
Lance De Jersey
Director
Director
The accompanying notes form an integral part of these unaudited condensed
half-yearly financial statements.
CONDENSED STATEMENT OF CHANGES IN EQUITY
AS AT 30 SEPTEMBER 2022
Share Capital Deferred shares reserve Employee share option reserve Other distributable reserve Total
£'000 £'000 £'000 £'000 £'000
Balance as at 31 March 2022 Note 2,127 - 212 18,122 20,461
Total comprehensive loss for the period - - - (3,788) (3,788)
Transactions with shareholders -
Employee share scheme - value of employee services
12 - - 16 - 16
Balance as at 30 September 2022 2,127 - 228 14,334 16,689
Balance as at 31 March 2021 2,127 - 180 22,632 24,939
Total comprehensive loss for the period - - - (1,602) (1,602)
Transactions with shareholders
Employee share scheme - value of employee services
12 - - 16 - 16
Balance as at 30 September 2021 2,127 - 196 21,030 23,353
The accompanying notes form an integral part of these unaudited condensed
half-yearly financial statements.
CONDENSED HALF-YEARLY STATEMENT OF CASHFLOWS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
01 April 2022 to 01 April 2021 to
30 September 2022 30 September 2021
(unaudited) (unaudited)
£'000 £'000
Notes
Cash flows from operating activities
Total comprehensive (loss)/income for the year (3,788) (1,602)
Adjustments for:
Unrealised loss/(gain) on fair value adjustments on financial assets at 3,536 (762)
FVTPL
Realised loss/(gain) on disposal of financial assets at FVTPL (4) 1,930
Foreign exchange movement (72) (25)
Directors' share based payment expense 16 16
Finance income (37) (45)
Changes in working capital:
Decrease in other receivables and prepayments 27 17
Decrease in other payables and accruals (23) (5)
Net cash outflow from operating activities (345) (476)
Cash flows from investing activities
Acquisition of financial assets at fair value through profit or loss 5 (439) (4,714)
Disposal of financial assets at fair value through profit or loss 5 150 5,566
Net cash inflow/(outflow) from investing activities (289) 852
(Decrease)/Increase in cash and cash equivalents (634) 376
Cash and cash equivalents brought forward 922 1,675
(Decrease)/Increase in cash and cash equivalents (634) 376
Foreign exchange movement 72 25
Cash and cash equivalents carried forward 360 2,076
The accompanying notes form an integral part of these unaudited condensed
half-yearly financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2022
1. General Information
SEED Innovations Limited (the "Company") is an authorised closed-ended
investment scheme. The Company is domiciled and incorporated as a limited
liability company in Guernsey. The registered office of the Company is PO Box
343, Obsidian House, La Rue D'Aval, Vale, GY6 8LB.
The Company's objective is set out in its Investing Policy which can be found
at https://seedinnovations.co/about/investing-policy and as detailed on page 4
of these financial statements.
The Company's Ordinary Shares are quoted on AIM, a market operated by the
London Stock Exchange and is authorised as a Closed- ended investment scheme
by the Guernsey Financial Services Commission (the "GFSC") under Section 8 of
the Protection of Investors (Bailiwick of Guernsey) Law, 2020 and the
Authorised Closed-Ended Investment Schemes Guidance and Rules 2021.
2. Statement of Compliance
These condensed half-yearly financial statements, which have not been
independently reviewed or audited by the Company auditors, have been prepared
in accordance with International Accounting Standard 34: Interim Financial
Reporting. They do not include all of the information required for full annual
financial statements and should be read in conjunction with the audited
financial statements for the year ended 31 March 2022.
The unaudited condensed half-yearly financial statements were approved by the
Board of Directors on 12 December 2022.
3. Significant Accounting Policies
These unaudited condensed half-yearly financial statements have adopted the
same accounting policies as the last audited financial statements, which were
prepared in accordance with International Financial Reporting Standards
("IFRS"), issued by the International Accounting Standards Board,
interpretations issued by the IFRS Interpretations Committee and applicable
legal and regulatory requirements of Guernsey Law and reflect the accounting
policies as disclosed in the Company's last audited financial statements,
which have been adopted and applied consistently.
The Company has adopted all revisions and amendments to IFRS issued by the
IASB, which may be relevant to and effective for the Company's financial
statements for the annual period beginning 1 April 2022. No new standards or
interpretations adopted during the period had an impact on the reported
financial position or performance of the Company.
4. Critical Accounting Estimates and Judgements
The preparation of financial statements in conformity with IFRS requires the
Board to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The Board makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results.
The Directors believe that the underlying assumptions are appropriate and that
the financial statements are fairly presented. Estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are outlined
below.
Judgements
Going concern
After making reasonable enquiries, and assessing all data relating to the
Company's liquidity, the directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future and do not consider there to be any threat to the going
concern status of the Company. For this reason, they continue to adopt the
going concern basis in preparing the financial statements.
Assessment as an investment entity
In determining the Company meeting the definition of an investment entity in
accordance with IFRS 10, it has considered the following:
• the Company has raised the commitments from a number of investors in order
to raise capital to invest and to provide investor management services with
respect to these private equity investments;
• the Company intends to generate capital and income returns from its
investments which will, in turn, be distributed to the investors; and
• the Company evaluates its investment performance on a fair value basis, in
accordance with the policies set out in these financial statements.
Although the Company met all three defining criteria, management has also
assessed the business purpose of the Company, the investment strategies for
the private equity investments, the nature of any earnings from the private
equity investments and the fair value model. Management made this assessment
in order to determine whether any additional areas of judgement exist with
respect to the typical characteristics of an investment entity versus those of
the Company. Management have therefore concluded that from the assessments
made, the Company meets the criteria of an investment entity within IFRS 10.
Part of the assessment in relation to meeting the business purpose aspects of
the IFRS 10 criteria also requires consideration of exit strategies. Given
that the Company does not intend to hold investments indefinitely, management
have determined that the Company's investment plans support its business
purpose as an investment entity.
The Board has also concluded that the Company meets the additional
characteristics of an investment entity, in that: it holds more than one
investment; the investments will predominantly be in the form of equities,
derivatives and similar securities; it has more than one investor and the
majority of its investors are not related parties.
Estimates and assumptions
Fair value of securities not quoted in an active market.
The Company may value positions by using its own models or commissioning
valuation reports from professional third-party valuers. The models used in
either case are based on valuation methods and techniques generally recognised
as standard within the industry and in accordance with International Private
Equity and Venture Capital Valuation (IPEV) Guidelines. The inputs into these
models are primarily revenue or earnings multiples and discounted cash flows.
The inputs in the revenue or earnings multiple models include observable data,
such as the earnings multiples of comparable companies to the relevant
portfolio company, and unobservable data, such as forecast earnings for the
portfolio company. In discounted cash flow models, unobservable inputs are the
projected cash flows of the relevant portfolio company and the risk premium
for liquidity and credit risk that are incorporated into the discount rate. In
some instances, the cost of an investment is the best measure of fair value in
the absence of further information. Models are calibrated by back-testing to
actual results/exit prices achieved to ensure that outputs are reliable, where
possible.
Models use observable data, to the extent practicable. However, areas such as
credit risk (both own and counterparty), volatilities and correlations require
management to make estimates. Changes in assumptions about these factors could
affect the reported fair value of financial instruments. The sensitivity to
unobservable inputs is based on management's expectation of reasonable
possible shifts in these inputs, taking into consideration historical
volatility and estimations of future market movements.
The determination of what constitutes 'observable' requires significant
judgement by the Company. The Company considers observable data to be market
data that is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are
actively involved in the relevant market.
Valuation of Options
The fair values of the Options are measured using the Black-Scholes model, for
those options with non-market vesting conditions, and a Monte Carlo Simulation
model for those Options with market related vesting conditions.
The key estimates and assumptions which are used as inputs in these valuation
models are as follows;
• any market vesting conditions;
• the expected vesting period;
• the term of the options;
• the expected volatility of the Company's share price as at grant date;
• the risk-free rate of return available at grant date;
• the Company's share price at grant date;
• the expected dividends on the Company's shares over the expected term of
the options; and
• the exercise (strike) price of the options.
For those Options which did not vest immediately on issue, non- market vesting
conditions, the expected vesting period of the options is estimated to be 5
years from the grant date. 5 years is deemed to be a realistic timeframe in
which the performance conditions can be expected to be achieved.
However, the options can be exercised (subject to market conditions being met
where applicable) at any point after vesting and prior to the Option expiry
date.
5. Investments designated at fair value through profit or loss
A reconciliation of the opening and closing balances of assets designated at
fair value through profit or loss classified as Level 1 is shown below:
30 September 2022 31 March 2022
£'000 £'000
Fair value of investments brought forward 2,632 5,455
Purchases during the year - 1,922
Transfer from Level 3 to Level 1 - -
Disposals proceeds during the year (100) (529)
Realised gains/(losses) on disposals 4 384
Net unrealised change in fair value (1,190) (4,600)
Fair value of investments carried forward 1,346 2,632
A reconciliation of the opening and closing balances of assets designated at
fair value through profit or loss classified as Level 3 is shown below:
30 September 2022 31 March 2022
£'000 £'000
Fair value of investments brought forward 16,892 17,825
Purchases during the year 439 3,855
Transfer from Level 3 to Level 1 - -
Disposals proceeds during the year (50) - 5,376
Capitalised interest on loan 37 104
Realised gains/(losses) on disposals - - 2,335
Net unrealised change in fair value (2,347) 2,819
Fair value of investments carried forward 14,972 16,892
During the period there were no transfers between the levels.
The valuations used to determine fair values are validated and periodically
reviewed by experienced personnel, in most cases this validation and review is
undertaken by members of the Board, however professional third-party valuation
firms are used for some valuations and the Company also has access to a
network of industry experts by virtue of the personal networks of the
directors and substantial shareholders. The valuations prepared by the Company
or received from third parties are in accordance with the International
Private Equity and Venture Capital Valuation Guidelines. The valuations, when
relevant, are based on a mixture of:
• Market approach (utilising EBITDA or Revenue multiples, industry value
benchmarks and available market prices approaches);
• Income approach (utilising Discounted Cash Flow, Replacement Cost and Net
Asset approaches);
• Price of a recent transaction when transaction price/cost is considered
indicative of fair value; and
• Proposed sale price.
6. Segmental Information
In accordance with IFRS 8: Operating Segments, it is mandatory for the Company
to present and disclose segmental information based on the internal reports
that are regularly reviewed by the Board in order to assess each segment's
performance and to allocate resources to them.
Operating segments are reported in a manner consistent with the internal
reporting used by the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board as a
whole. The board is responsible for the Company's entire portfolio and
considers the business to have a single operating segment. Asset allocation
decisions are based on a single, integrated investment strategy, and the
Company's performance is evaluated on an overall basis.
7. (Loss)/Earnings per Ordinary Share
The loss per Ordinary Share of -1.78p (30 September 2021: -0.75p loss per
ordinary share) is based on the loss for the year of £3,789,000 (30 September
2021: loss £1,602,000) and on a weighted average number of 212,747,395
Ordinary Shares in issue during the year (30 September 2021: 212,747,395
Ordinary Shares).
The basic and diluted earnings per Ordinary Share were the same. The average
share price of the Ordinary Shares during the year was below the exercise
price of the Options (exercise prices of 19.00 pence, 20.00 pence and 25.00
pence) and Warrants (exercise price 12.75p). Therefore, as at 30 September
2022 neither the Options nor the Warrants had a dilutive
effect.
8. Tax effects of other comprehensive income
The Directors do not propose an interim dividend for the period ended 30
September 2022 (30 September 2021: £Nil).
9. Tax effects of other comprehensive income
The Income Tax Authority of Guernsey has granted the Company exemption from
Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey)
(Amendment) Ordinance, 2012 and the income of the Company may be distributed
or accumulated without deduction of Guernsey income tax. Exemption under the
above mentioned Ordinance entails payment by the Company of an annual fee of
£1,200 for each year in which the exemption is claimed. It should be noted,
however, that interest and dividend income accruing from the Company's
investments may be subject to withholding tax in the country of origin.
There were no tax effects arising from the other comprehensive income
disclosed in the Statement of Comprehensive Income (30 September 2021: £Nil).
10. Net Assets per Ordinary Share
Basic and diluted
The basic and diluted net asset value per Ordinary Share is based on the net
assets attributable to equity shareholders of £16,689,000 (31 March 2022:
£20,461,000) and on 212,747,395 Ordinary Shares (31 March 2022: 212,747,395
Ordinary Shares) in issue at the end of the period. The share price of the
Ordinary Shares at 30 September 2022 of 7.84 pence (31 March 2022: 9.62 pence)
was below the exercise price of any of the Options (lowest exercise price of
19.00 pence) or Warrants (12.75 pence). Therefore, as at 30 September 2022
neither the Options nor the Warrants had a dilutive
effect.
11. Share Capital, Warrants, Options, Treasury shares and Other distributable reserves
30 September 2022 31 March 2022
Authorised: £'000 £'000
1,910,000,000 Ordinary Shares of 1p (2021:
1,910,000,000 Ordinary Shares) 19,100 19,100
100,000,000 Deferred Shares of 0.9p (2021: 900 900
100,000,000 Deferred Shares)
20,000 20,000
Allotted, called up and fully paid:
212,747,395 Ordinary Shares of 1p
(2021: 212,747,395 Ordinary Shares) (i) 2,127 2,127
Nil Deferred Shares of 0.9p (2021: Nil)
````````(ii) - -
Share options ```````(iii) 2,000,000 2,000,000
Warrants ```````(vi) 24,117,762 24,117,762
Treasury Shares:
2,472,446 Treasury Shares of 1p
(2021: 2,472,446) ```````(v) 25 25
(i) Ordinary Shares
There was no issue of shares during the period ended 30 September 2022 (31
March 2022: Nil).
(ii) Deferred Shares
There was no issue of shares during the period ended 30 September 2022 (31
March 2022: Nil).
(iii) Options
The options granted relate to Ed McDermott.
(iv) Directors' Authority to Allot Shares
The Directors are generally and unconditionally authorised to exercise all the
powers of the Company to allot relevant securities. The Directors may
determine up to a maximum aggregate nominal amount of 100% of the issued share
capital during the period until the following Annual General Meeting. The
Guernsey Companies Law does not limit the power of Directors to issue shares
or impose any pre-emption rights on the issue of new shares.
(v) Shares held in Treasury
There were no changes to the number of Shares held in Treasury during the
period.
(vi) Warrants
There were no changes to the number of Warrants during the period.
12. Related Parties
Ian Burns
Mr Burns, Non-Executive Chairman of the Company, is the legal and beneficial
owner of Smoke Rise Holdings Limited, which held 1,374,024 (2021: 1,374,024)
Ordinary Shares in the Company at 31 March 2022 and at the date of signing
this report.
Mr Burns is entitled to an annual remuneration of £36,000, payable quarterly
in arrears.
Ed McDermott
Ed McDermott is entitled to an annual remuneration of £160,000 effective 1
April 2021 (2021: £160,000). The Company has also granted Mr McDermott
Options over 1,000,000 Ordinary shares at 19 pence per share and further
Options over 1,000,000 Ordinary shares at 25 pence per share.
Mr McDermott was paid no performance bonus in 2022 (2021: £15,000) relating
to work undertaken in the year ended 31 March 2022.
Lance De Jersey
Mr De Jersey, Finance Director of the Company held 400,000 ordinary shares in
the Company as at 31 March 2022 and at the date of signing of this report.
Mr De Jersey is entitled annual remuneration of £106,000 (2021: £106,000)
and was paid no performance bonus in 2022 (2021:
£15,000) relating to work undertaken in the year ended 31 March 2022.
Luke Cairns
Mr Cairns is entitled to an annual remuneration of £36,000 per annum.
30 September 2022
Recognition of
Directors' share based
Remuneration expense Total
£'000 £'000 £'000
Ian Burns 18 - 18
Ed McDermott 80 16 97
Lance De Jersey 57 - 57
Luke Cairns 18 - 18
173 16 189
30 September 2021
Recognition of
Directors' share based
Remuneration expense Total
£'000 £'000 £'000
Ian Burns 18 - 18
Ed McDermott 95 16 111
Lance De Jersey 69 - 69
Luke Cairns 18 - 18
200 16 216
13. Capital Management Policy and Procedures
The Company's capital structure is derived solely from the issue of Ordinary
Shares.
The Company does not currently intend to fund any investments through debt or
other borrowings but may do so if appropriate. Investments in early stage
assets are expected to be mainly in the form of equity, with debt potentially
being raised later to fund the development of such assets. Investments in
later stage assets are more likely to include an element of debt to equity
gearing. The Company may also offer new Ordinary Shares as consideration as
well as cash, thereby helping to preserve the Company's cash for working
capital and as a reserve against unforeseen contingencies including, for
example, delays in collecting accounts receivable, unexpected changes in the
economic environment and operational problems.
The Board monitors and reviews the structure of the Company's capital on an ad
hoc basis. This review includes:
• The need to obtain funds for new investments, as and when
they arise;
• The current and future levels of gearing;
• The need to buy back Ordinary Shares for cancellation or to be
held in treasury, which takes account of the difference between the net asset
value per Ordinary Share and the Ordinary Share price;
• The current and future dividend policy; and
• The current and future return of capital policy.
The Company is not subject to any externally imposed capital requirements.
14.Events after the Financial Reporting Date
On 11 November 2022 the Company in consultation with South West Brands agreed
to extend the terms of the £150,000 12 month Convertible Loan Note due on 27
October 2022 to 16 January 2023.
On 7 December 2022 the Company announced the conditional sale of Fralis LLC
(Leap Gaming). Under the terms of the sale (expected to complete within 6
months of signing), SEED will sell its entire holding in Leap for
approximately €5.6 million (subject to adjustment for debt and working
capital) plus repayment of the €250,000 term loan advanced during the period
(together with accrued interest).
- Ends -
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