TIDMSEED
Seed Innovations Limited
08 February 2022
Seed Innovations Ltd / AIM: SEED / Sector: Closed End
Investments
08 February 2022
SEED Innovations Limited ("SEED" or the "Company")
Investee Company Update: Little Green Pharma Ltd
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 note an
announcement by its portfolio company, Little Green Pharma Ltd
('LGP').
SEED owns a holding of 7,324,796 ordinary shares in LGP
representing 3.1% of LGP's issued share capital.
The announcement by Little Green Pharma Ltd is set out below
without material changes or adjustments:
8 February 2022
LGP to demerge psychedelics business via in-specie distribution
and entitlement offer to shareholders. Demerger to complete in June
quarter 2022.
Highlights
-- Intention to demerge psychedelics business into separate
unlisted entity, Reset Mind Sciences Ltd
-- Demerger to be undertaken via pro-rata, in-specie
distribution of 100% of Reset securities to eligible LGP
shareholders who afterwards will hold separate shareholdings in LGP
and Reset
-- Intention to also offer eligible Reset shareholders the
opportunity to participate in entitlement offer to fund Reset
operations
-- LGP Board believes Demerger will unlock strategic value of
psychedelics business for benefit of all shareholders
-- Demerger completion targeted for June quarter 2022
Little Green Pharma Ltd (ASX: LGP, "LGP" or the "Company") is
pleased to announce its intention, subject to shareholder and other
required approvals, to demerge the ownership of its psychedelics
business, Reset Mind Sciences Limited ("Reset"), from the LGP Group
("Demerger"). In conjunction with the Demerger, Reset also intends
to undertake an entitlement offer to LGP shareholders to fund its
operations.
Demerger overview and rationale
There is an increasing body of research globally into the use of
psychedelic medicines, most notably psilocybin and MDMA, to treat
various chronic mental health conditions. To date, this global
research has produced highly encouraging results and has catalysed
the development of a significant global medicinal psychedelics
industry, particularly in North America and the United Kingdom. The
psychedelics industry is now gaining significant momentum in
Australia which includes support from the Australian Government for
medicinal psychedelics research through a $15m grant program to be
awarded in January 2022.
In late 2020, the Company entered the psychedelics space given
its logical fit with LGP's long term stated goals of solving real
patient problems and transforming lives, as well as LGP's existing
regulatory platform and expertise in cultivating and manufacturing
Schedule 9 herbal drugs. The strategy also aligned with LGP's
record of being a pioneer in emerging Australian pharmaceutical
industries.
Since its formation, Reset has made significant progress in the
field of psychedelics and LGP believes its shareholders' best
interests are now served by demerging the subsidiary to allow it to
pursue its strategy as a standalone company. This will give new and
existing shareholders the freedom to dictate their preferred
investment appetite across the two industries.
Post-Demerger, LGP will provide Reset with ongoing operational
support and product supply, including exclusive access to the
Company's Schedule 9 licensed West Australian cultivation and
production facilities. Reset is currently investing in the
expansion of LGP's facilities to include specialist mushroom
cultivation capability.
As part of the Demerger, LGP shareholders are expected to
receive a pro rata allocation of 100% of the shares in Reset and a
pro-rata offer to participate in a Reset entitlement offer, with
further details to be provided in due course.
Post-Demerger, Reset will focus solely on developing its
psychedelics business with the aim of being at the forefront of the
psychedelics industry in Australia.
Leadership
A highly experienced and respected team has been assembled to
run Reset, including:
Shaun Duffy as Chief Executive Officer and Executive Director.
Mr Duffy is a Chartered Accountant and former Senior Managing
Director of FTI Consulting as well as head of that firm's
Australian Strategic Communications practice and member of its
Australian Leadership Group. Mr Duffy has also provided strategy
consultancy and corporate advisory services to LGP since 2020.
Angus Caithness as Executive Director. Mr Caithness is an
executive director of LGP and an experienced corporate finance
executive and consultant in Australia and international markets. Mr
Caithness was previously an Executive Director at EY in London and
Australia specialising in initial public offerings of large cap
mining companies. Mr Caithness is a Harvard Business School
alumnus, a Chartered Accountant, holds a Master of Science and is a
fellow of the Financial Services Institute of Australasia.
Honourable Cheryl Edwardes AM as Non-Executive Director and
Chairperson. Ms Edwardes is a member of the Foreign Investment
Review Board and a company director on a number of ASX Boards,
private companies and not-for-profit associations. A solicitor by
profession, Ms Edwardes is a former Minister in the Court
Government with extensive experience and knowledge of WA's legal
and regulatory framework. During her political career, Ms Edwardes
held positions as the first female Attorney General for Western
Australia, Minister for Environment and Labour Relations, and was
the Member for Kingsley for nearly 17 years.
Reset has also engaged a highly credentialed Clinical Advisory
Board with an emphasis on expertise in the delivery of psychedelic
assisted psychotherapy.
The Clinical Advisory Board comprises clinical psychologist and
Senior Lecturer of Addiction at Edith Cowan University in Western
Australia, Dr Stephen Bright; clinical psychologist and previous
member of a psilocybin based clinical trial team at Imperial
College London, Renee Harvey; and Chief Executive Officer and
co-founder of Enlighten Mental Health, Eternity Hausen.
Benefits of the Demerger
-- Demerging LGP's cannabis and psychedelics businesses
anticipated to unlock greater value for LGP shareholders and allow
differentiated investments across medicinal cannabis and
psychedelics
-- Permits each entity to appropriately fund, resource and focus on their individual businesses
-- Establishes two separate management teams to pursue
independent strategies and growth opportunities
-- Capitalises on strong momentum in the global psychedelics
sector and allows shareholders to better share in any sector
uplift
-- Attracts stronger investor attention and valuation as a standalone entity
-- Allows LGP to maintain its focus on the domestic and global cannabis markets
-- Provides a timely, clean separation of businesses
Update on psychedelics business
The Company has commenced construction of its standalone
psilocybin mushroom cultivation facility which is expected to be
completed in the June 2022 quarter.
Planning is well underway for a West Australian based clinical
trial into psilocybin assisted psychotherapy. Reset is currently
finalising the psychotherapy protocols for use in the clinical
trial and has received an Federal import permit for the synthetic
psilocybin to be used in the trial.
Next steps
LGP will shortly convene a general meeting of shareholders to
seek approval for the Demerger. The notice of meeting will
summarise Reset's business strategy, the advantages and
disadvantages of the Demerger, terms of the entitlement offer, key
risk factors, and key dates for the proposed Demerger.
Subject to LGP shareholder approval, as well as satisfactory ASX
and other regulatory approvals, LGP will then distribute 100% of
the Reset shares on issue via an in-specie distribution to eligible
LGP shareholders prorata to their shareholding held in LGP as at a
record date within the June quarter. LGP reserves the right to
amend the proposed terms of, or not proceed with, the Demerger in
its absolute discretion.
The Company has also engaged with the Australian Tax Office
("ATO") to confirm the expected CGT rollover relief tax treatment
arising from the Demerger, however, LGP and Reset may elect to
complete the proposed Demerger prior to receiving definitive advice
from the ATO. Canaccord Genuity (Australia) Limited has been
appointed as capital markets adviser to the Demerger.
LGP's Chief Executive Officer, Fleta Solomon, commented: "We
have invested significant effort investigating and advancing
Reset's psychedelics operations throughout 2021 and believe it is
now at a point where it is best placed to grow as a standalone
business. We are confident the Demerger will allow for both Reset
to drive its psychedelics strategy and LGP to focus solely on its
medicinal cannabis business. We believe the Demerger rewards LGP
shareholders for Reset's progress to date and allow them to
participate in its exciting future."
Reset's Chief Executive Officer, Shaun Duffy, commented: "We
believe Reset is ideally placed to play a leading role in the
evolution of the psychedelics industry in Australia. We've been
able to make significant progress drawing on the expertise,
experience and facility investment that exists in LGP, and our
first mover status has allowed us to attract the attention of many
experienced organisations and individuals as potential partners.
While we plan to continue to maintain a close operational
relationship with LGP, operating as a standalone company with our
own board, management and strategy will allow us to better
prioritise and focus on advancing our psychedelics business."
For more information about Little Green Pharma go to:
www.littlegreenpharma.com
Ends
For further information on the Company please visit www.seedinnovations.co or contact:
Ed McDermott SEED Innovations Email: info@seedinnovations.co
/ Ltd
Lance
de Jersey
James Beaumont Cornish Tel: +44 (0)
Biddle Limited, 207 628 3396
/ Nomad
Roland
Cornish
------------------- -------------------------------
Isabella Shard Capital Tel: +44 (0)20
Pierre Partners LLP 7186 9927
/
Damon
Heath
------------------- -------------------------------
Catherine St Brides Partners Email: s eed
Leftley Ltd, @stbridespartners.co.uk
/ Financial PR
Isabelle
Morris
------------------- -------------------------------
Notes
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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END
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February 08, 2022 08:50 ET (13:50 GMT)
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