Agronomics puts another $5m into seafood firm BlueNalu

Cellular agriculture-focussed investor Agronomics has completed a subscription for a $5m (£3.8m) convertible promissory note (CPN) in existing investee company BlueNalu, it announced on Thursday.

The AIM-traded firm described BlueNalu as a cell-based seafood company based in San Diego, California, and said the subscription would be paid using cash from its own resources.

It said the CPN would convert into equity in the event of a qualified financing, being a fundraise of $50m or greater.

In that case, the notes and interest due under the CPN would convert to shares at the lesser of a 20% discount to the price of the financing, or the valuation cap divided by the total outstanding shares prior to the qualified financing.

Agronomics currently holds 192,005 shares of BlueNalu, comprising 43,357 seed preferred shares and 148,648 series A preferred shares, with a book value, excluding the CPN investment, of £2.74m.

Assuming the CPN is subscribed in full and a qualified financing occurs at a price equal to the note’s agreed valuation cap, Agronomics said it would have an approximate equity interest of 5.85% following conversion, which would value its position at about £13.4m.

Concurrent with the investment Agronomics non-executive director Jim Mellon had been granted the right to attend BlueNalu board meetings as an observer.

“Agronomics is delighted to be continuing its support for BlueNalu in their work on providing a sustainable solution to meeting the world's seafood demand,” said Mellon.

“We are optimistic that advances by BlueNalu will be able to make a real difference in combating some of the current issues with the fishing and aquaculture industry.”

Agronomics said BlueNalu began operations in 2018, and now had a team of 31 employees in areas including food innovation, cell biology, technology commercialisation, intellectual property, finance, tissue engineering, large-scape biopharma processing, and quality assurance.

Since its participation in BlueNalu's series A financing, BlueNalu had established a 40,000 square foot facility for the purposes of commercialisation and development.

“We are extremely thankful to the team at Agronomics for their continued support, and we are pleased to welcome Jim Mellon as an observer to our board of directors,” said BlueNalu co-founder, chief executive officer and president Lou Cooperhouse.

“Agronomics has participated in each of our financing rounds thus far, and has a keen understanding regarding the role that cell-based seafood can play in the global supply chain.”

At 1137 GMT, shares in Agronomics were up 1.22% at 6.22p.