SEED Innovations Ltd (AIM:SEED, OTC:FFRIF) said its portfolio company, Little Green Pharma (LGP) Ltd, agreed a two-and-a-half year take-or-pay contract with Four 20 Pharma for the exclusive supply of a new high-THC strain into Germany.
The deal is LGP's largest single-strain offtake quantity contract to date, with a minimum take or pay commitment of US$7.5mln over 30 months.
"The LGP management team are continuing to deliver against the expectations and the company remains a market leader in the international medical cannabis market,” Ed McDermott, SEED chief executive, commented.
SEED, the AIM quoted investor in medical cannabis, health and wellness, holds 7.3mln ordinary shares in LGP, representing 3.1% of the ASX-listed company’s issued share capital.
The transaction represents a “significant evolutionary step” in LGP’s supply processes and contract portfolio, as it continues to deliver on its distribution strategy in Europe.
First product deliveries are expected late next quarter or early in the following one, SEED said.
In a separate statement, SEED also announced that investee company Yooma Wellness Inc (CSE:YOOM, OTC:LVVEF, AQSE:YOOM), in which SEED holds 4.4mln ordinary shares representing approximately 4.4% of its issued share capital, released its full-year 2021 results late Wednesday and is planning a strategic review.
Yooma generated sales of US$10.2mln in the year ended 31 December 2021, with revenue exceeding forecasts in Q4 at US$5.3mln.
It reported losses for the year of US$33.4mln, reflecting costs relating primarily to acquisitions, capital raising activities and its reverse takeover transaction and AQSE dual-listing.
Yooma chairman Lorne Abony said the company has executed on its business plan "to acquire brands and businesses and enter new markets to establish a global wellness platform". However, he noted that the markets have been difficult "and we do not believe our current share price is a fair reflection of what the company has achieved or its potential for further growth".
The depressed share price could hamper additional capital raising and further acquisitions, Abony said, so Yooma is undertaking a strategic review to look at potential options, including a listing on another regulated stock exchange, sale of assets, or further merger and acquisitions.
It has has appointed Canaccord Genuity (TSX:CF, LSE:CF) Corp. as a strategic adviser.
SEED's McDermott commented: "SEED is pleased to see a positive operational update from Yooma despite a slow moving cannabis market. Yooma continues to progress with its buy-and-build strategy and focus on integrating its existing assets. We are hopeful that this growth trend will continue and for it to be reflected into the share price."