Partial Sale of Avextra:60% Premium to Entry Point

Seed Innovations Limited

11 September 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.

11 September 2023

SEED Innovations Limited

("SEED" or the "Company")

Partial Sale of Shareholding in Avextra AG

60% Premium to Entry Point

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 pleased to announce the sale of 2,900 share units of Avextra AG ('Avextra'), a German-based, European vertically integrated medical cannabis company, representing 56.4% of SEED's holding in Avextra (formerly Eurox Group) for gross proceeds of €2.9 million (£2.45 million) (the 'Sale').

SEED remains a holder of 2,242 shares in Avextra representing approximately 3% of Avextra on a fully diluted basis.

Highlights

·    Sale has resulted in gross proceeds of €2.9 million (£2.45 million), a 62% (1.6x) return on SEED's original investment in 2021 and 2022

·    SEED remains a supportive shareholder, continuing to hold 2,242 units representing approximately 3% of Avextra on a fully diluted basis.

·    SEED's total cash position will be approximately £4.6M following the Sale, with further cash receivables due from the sale of Leap Gaming of around £2.5 million.

·    Total Cash and Receivable position at £7.1 million is markedly (c.38.9%) higher than the current market capitalisation of SEED of c.£5.11 million (per closing on 8 September 2023).

·    Last published NAV of SEED included Avextra at £4,436,000, based on a price per share of €980.

o  Sale at €1,000 per share represents a 2% premium to the EURO price per share

o  Following the Sale, SEEDs remaining holding in Avextra can be valued at €2,240,000 (c£1.9M) based on this new price.

·    With an increased level of cash available, and a robust potential deal flow, SEED remains confident that the current environment will offer superior opportunities to invest and in turn, create long-lasting value for investors.

·    SEED remains committed to its investment policy of providing exposure to disruptive growth opportunities, diversifying into life sciences and biotechnology sectors, and leveraging its resources and expertise for maximum returns while mitigating risks.

·    In addition to multi-year time horizon investments, the Board may look to make shorter term, opportunistic investments where there are significant levels of liquidity and in keeping with SEED's Investing Policy, as indicated in the Company's 2023 Final Results.

CEO, Ed McDermott commented: "The opportunity arose for a partial exit of our Avextra holding and the board agreed that generating another c.£2.45 million via a premium asset sale was the right decision. The Sale represents a 60% premium to our entry point which is pleasing, especially when prevailing market conditions are accounted for. We remain supportive shareholders of Avextra and appreciate the progress they continue to make along with their focus on meeting the needs of patients and healthcare professionals across Europe.

"As an agile fund that can adapt to the movements in the markets, SEED is looking to speed up the investment cycle and, where appropriate, seek full or partial exits within as close to a 24-month timeframe as possible. Current market conditions have created strong opportunities for investment companies with cash and, with the Board's broad network and access to investment opportunities, we intend to utilise our cash and cash receivables balance of some £7.1m to invest in fast moving enterprises with excellent upside potential."

Avextra CEO, Bernhard Babel, commented: "SEED joined us as an investor very early on and the initial investment came at an important time for Avextra to enable its growth and add to the confidence of other institutional investors who have, like SEED, supported the company across a number of raises. SEED's representative on the supervisory board, Alfredo Pascual, has helped us with his experience and deep insights in the sector and we would like to thank him and SEED for their valuable support. We are pleased SEED remains an investor and we look forward to providing further positive Avextra updates in the coming weeks."

Further Information

As announced on 5 July 2021, SEED invested €3 million in Avextra (formally Eurox Group). In addition, SEED invested a further €0.17million in preferred shares, as announced on 6 April 2022 taking the total investment by SEED into Avextra to €3.17 million.

SEED has completed the Sale at €1,000 per share with gross proceeds to the Company of €2.9 million (£2.45 million), a 60% (1.6x) return on SEED's original investment.

SEED remains a holder of 2,242 shares in Avextra representing 3.8% of Avextra's issued share capital.

It is intended that Alfredo Pascual, SEED's Executive Director, will step down from his role on the Avextra supervisory board in the near future.

-Ends-

For further information on the Company please visit:  www.seedinnovations.co or contact: 

Ed McDermott Lance de Jersey	SEED Innovations Ltd	E: [e-mail]
James Biddle Roland Cornish	Beaumont Cornish Limited, Nomad	T: (0)20 7628 3396
Isabella Pierre Damon Heath	Shard Capital Partners LLP Broker	T: (0)20 7186 9927
Catherine Leftley Ana Ribeiro Isabelle Morris	St Brides Partners Ltd, Financial PR	E: [e-mail]

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.

 

END