Agronomics invests US$2m in Liberation Labs

Agronomics (LSE: ANIC), a leading listed company in the field of cellular agriculture, reports that portfolio company Liberation Labs Holdings Inc. ("Liberation Labs") has raised a further US$ 3.5 million via a Secured Promissory Note ("Note"), including a US$ 2.0 million subscription from Agronomics using its own cash resources. The Note pays interest at 10% per annum and matures on 10 October 2027. Liberation Labs has also received a US$ 1.39 million award under the US Department of Defense's ("DoD") Distributed Bioindustrial Manufacturing Program.

The Note, a form of convertible debt, is for financing the continued construction of its facility in Richmond, Indiana in advance of Liberation Labs' intended Series A round (a "Qualified Financing") as set out in the 5 April 2024 announcement. The Notes will convert into the same instrument and terms as the Qualified Financing and are anticipated to raise a minimum of US$ 37.5 million through a combination of debt and equity.

Department of Defense Award

In addition, Liberation Labs has received a US$ 1.39 million award from the DoD to conduct a detailed feasibility study (engineering and market analysis) for the addition of a flexible-use, commercial-scale 4 million litre biomanufacturing facility adjacent to its Launch Facility.

The award is part of DoD's Distributed Bioindustrial Manufacturing Program, established by the White House's Executive Order 14081, "Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy." The programme aims to bolster America's bioeconomic strengths while helping the Department achieve advanced defense capabilities and supply chain resiliency.

Upon successful completion of the Prototype Assessment and Planning phase, Liberation Labs may be selected to proceed to the Prototype Build phase, which would provide up to US$ 100 million for building new facilities or expanding current facilities for bioindustrial manufacturing.

Agronomics' Executive Chair Jim Mellon commented:

"In 2020, McKinsey estimated that approximately 60% of all physical inputs of the global economy could be produced via biomanufacturing. The DoD's recent commitment to invest across fabrication, firepower, fitness, food and fuel, demonstrates the potential of a biomanufacturing ecosystem in which the benefits of more secure and reliable supply chains are delivered across industries.

In line with this, Liberation Labs' has made significant steps towards securing binding offtake agreements for its Launch Facility. The company now has signed letters of intent with potential customers representing well over 200% of the available capacity for the first few years of operations, demonstrating strong demand for "fit for purpose" biomanufacturing facilities across food, fuel, materials and pharmaceuticals."

Since the US$ 2.0 million subscription from Agronomics is considered a Substantial Transaction under AIM Rule 12, this announcement requires certain disclosures under Schedule Four. Liberation Labs is an early-stage company with no revenues and operating costs of approximately US$ 0.4 million per month, and total assets as at 30 June 2024 of approximately US$ 49.5 million and liabilities of US$ 43.8 million.

Including this Note, Agronomics has invested US$ 19.6 million in Liberation Labs which, subject to audit, is currently carried at a book value of £25.7 million. This funding round, however, will have no impact on the Liberation Labs current carrying value. The position represents approximately 15.9% of Agronomics' last stated Net Asset Value, including post-balance sheet date adjustments. Agronomics now holds 37.5% of Liberation Labs on a fully diluted basis.

The following have each subscribed US$ 0.5 million on identical terms to Agronomics: New Agrarian Company Limited, an affiliate of Agronomics; Galloway Limited; and Jim Mellon, Executive Chair of Agronomics, in his own name. Galloway Limited is indirectly wholly owned by Jim Mellon and Denham Eke is a director.

About Liberation Labs

Nominated Adviser