This SEED is now set to grow for springtime
“…In the short, medium and long term, there are great opportunities for us here at SEED Innovations…”
When you look at the net asset value of SEED Innovations’ portfolio and the current market cap there’s an obvious disconnect.
The most recent interims for the company that invests in the medical cannabis, health, and wellness space showed a portfolio worth £16.7 million pounds which is many multiples of where the share price is as of March 2023.
Chief executive Ed McDermott is sanguine about market sentiment and the market conditions that put paid to some of the liquidity events keenly anticipated for some of the portfolio. South West Brands shelved its IPO plans as did legacy asset Leap Gaming.
And it’s the latter that has been taking centre stage, rightly or wrongly, for SEED. The gaming company is an unusual fit in the portfolio, but Leap’s largest shareholder IMG wants to buy it. That’s straightforward, but what isn’t is that Leap has multiple licenses across many different jurisdictions. McDermott explains that “in terms of the regulators that enforce those licenses, you need the permission for those licenses to be transferred, which thus far, I’m pleased to say it doesn’t look like it’s been a problem. And in terms of the guidance we set, we suggested that it would be Q1 2023, or very early, Q2 2023. So, we’re getting very close to that and I’m pleased to say at this point in time, there’s nothing to suggest that it won’t be the case.”
Once that transaction occurs, SEED’s original investment will see a return of £5 million into the coffers which McDermott says “will put us in a strong cash position.”
Then there’s the more recent news from Avextra, the business formerly known as Eurox, that has bucked market conditions that has raised £15 million from “significant capital sources.” SEED owns 6.6% of Avextra, so that liquidity event is in turn significant for SEED.
Significant too was McDermott and Chairman Ian Burns buying shares in the business when a narrow window of not being inside materialised. McDermott would like to buy more because he has a steadfast belief that “we wouldn’t be doing what we’re doing if we didn’t think that this portfolio and potential future assets in the portfolio weren’t going to make a material difference to value for shareholders.”
Listen to Ed talk to Sarah Lowther in the below podcast about the portfolio elements and potential liquidity events on the horizon.
Watch (below) Ed and #SEED’s board present the 2022 AGM on the Investor Meet platform
Watch Ed and Sarah (below) talking about the bigger picture cannabis investment opportunity
Access #SEED’s corporate presentation here
Follow the company on Twitter – @SEEDInnov
The author was remunerated but does not hold shares in the company