REG - Seed Innovations Ltd - Investee Company Updates

Seed InnovationsAnnouncement

22/12/2023 11:15

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RNS Number : 8036X  Seed Innovations Limited  22 December 2023

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic
Law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.

 

 

22 December 2023

 

SEED Innovations Limited

 

("SEED" or the "Company")

 

Investee Company Updates

 

SEED Innovations Ltd, the AIM-quoted company investment company providing
shareholders with exposure to early-stage health, wellness and medical
cannabis companies, to which, in normal circumstances, they have limited
access to, is disappointed to note an update from portfolio company Northern
Leaf plc ("Northern Leaf"), a Jersey based medical cannabis producer.

 

The Company also provides an update on Yooma Wellness Inc. ("Yooma").

 

Northern Leaf

 

By way of background, in April 2021 SEED invested a total of £600,000 via a
convertible loan note in Northern Leaf as part of a pre-IPO funding round on
the understanding that an IPO was achievable in the near-term. In April 2023,
as part of a £3 million equity raise by Northern Leaf, this was converted
into 1,236,331 preference shares, representing approximately 2.22% of Northern
Leaf.

 

On 8 September 2023, SEED announced that Northern Leaf had raised a further at
least £1 million of pre-IPO money for working capital purposes as it
continued to work towards an intended IPO.

 

Unfortunately, Northern Leaf failed to successfully IPO the company during
2021/22 as intended, and poor public market conditions in 2023 have further
worked against Northern Leaf's ambitions to complete an IPO thus far.

 

As a result, in the Company's interim results to 30 September 2023 announced
on 22 November 2023, SEED subsequently reduced the carrying value of Northern
Leaf by a little over half to £443,000 to reflect either the risk of an IPO
at a lower price or indeed of a listing not progressing and the resultant
pressures of raising further private funding as a result of poor public market
conditions.

 

The Company has since been informed that Northern Leaf has completed an
aggressive rights issue raising at a post-money valuation of £2.33M.

 

SEED did not participate in either the September or this latest round and
following the transactions is advised it will be diluted to a 0.55% holding in
Northern Leaf.

 

The Company has further reduced the carrying value of Northern Leaf to
c.£13,000 to reflect the valuation inferred by this latest raise.

 

Commenting, Ed McDermott, CEO of SEED said:

"SEED invested in Northern Leaf in 2021 based on its promises of an imminent
IPO. As investors ourselves, we understand as well as anyone how fundraising
challenges and limited liquidity across the UK market have exerted significant
pressure on companies attempting to come to market in the recent period. That
said, we are extremely disappointed in Northern Leaf's founding management and
their advisors in not taking advantage of what were clear opportunities during
2021 and early 2022 for a liquidity event. We are reviewing all our options,
including seeking legal advice as appropriate."

Yooma Wellness Inc.

As anticipated, the Company has noted a filing by Yooma confirming that it has
filed an assignment in bankruptcy pursuant to the Bankruptcy and Insolvency
Act (Canada). As announced in the Company's interim results to 30 September
2023 announced on 22 November 2023, Yooma was already written down to zero.

 

- Ends -

 

 

 

For further information on the Company please
visit:    www.seedinnovations.co (http://www.seedinnovations.com/)
   or contact:

 

  Ed McDermott        SEED Innovations Ltd             E: 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

 Ana Ribeiro          Financial PR

 Isabelle Morris

 

Notes

 

Seed Innovations Ltd

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

 

 

 

 

 

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