Company Announcements

Seed Innovations Ltd / AIM: SEED / Sector: Closed End Investments

22 November 2021

SEED Innovations Ltd ("SEED" or, the "Company")

Further Investment in Leap Gaming

SEED Innovations Limited, 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 that it has invested a further €450,000 (the 'Investment') in Fralis LLC, trading as Leap Gaming ('Leap'), an Israel based B2B developer of high-end 3D gaming applications whose games are offered by leading online and retail gaming operators worldwide. 

The Investment, funded from existing Company cash resources, is by way of an extension to the existing €1million 1% Convertible Loan Note ('CLN') as part of a funding round by Leap to raise up to a further €1.2million. The Investment takes the total amount invested by SEED in Leap convertible loan notes to €741,641 (c.£630,000 based on approximate GBP cost prices on the investment dates).  The Company also holds 47.06% of the total equity of Leap (on an un-diluted basis).

Highlights

●     Investment is alongside further investment from existing Leap shareholder, IMG Arena, a subsidiary of Endeavour Group (NYSE: EDR)

●     Attractive conversion terms, with a conversion ceiling below SEEDs 31 March 2021 valuation of 100% of Leap of €23.95million

●     Progress being made at Leap with forecast metrics for year to 31 December 2021:

o  Turnover:  Up 40% compared to December 2020;

o  Transactions: Up 60% on prior year; and

o  Daily Average Users: Up 60%

●     Minimum fees from operators at September 2021 double that of 2020

Ed McDermott, CEO of SEED, commented: "This investment reflects our ongoing support of Leap Gaming and their team as they continue to challenge the gaming industry worldwide. The funding will further facilitate their development and movement towards a possible liquidity event with all options, including M&A activity and a near term public market offering, being contemplated.  Although not a sector of core focus for SEED, this long-term investment that we have supported for some time is an important contributor to our net asset value, and with the growth Leap has seen and is forecasting to year end, we anticipate positive news flow and corporate development into 2022."  

Principal Terms of the Convertible Loan Note

The CLN will automatically convert as follows:

·    Immediately prior to an equity financing (of more than €1million) or liquidity event of Leap at the lower of a 25% discount to the lowest issue price per share at that event or a pre-money valuation of €15million (in line with the previous convertible loans since June 2020, of which this investment forms a part); or

·    At maturity (31 December 2022) at the price per share of the last equity financing round of Leap (being €3,265.31 per share in June 2018, see RNS of 12 June 2018).

Interest shall accrue on the CLN at a rate of 1% per annum and will be aggregated with principal at conversion.

This CLN will not qualify as a qualifying fundraise under the terms of the Company's previous convertible loan investment in February 2021.

About Leap Gaming

Leap is a developer of high-end virtual-sports, slots, and casino applications serving hundreds of gaming brands and generating tens of thousands of engagement points with end-users. Leap's attention to detail in its solutions and services is manifested in the modular engagement terms it offers to its operating partners and its ability to provide seamless experiences across mobile, desktop and retail environments. Leap is licensed by the MGA and certified for other jurisdictions worldwide.

ENDS

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

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.