18 July 2023

Agronomics Limited

("Agronomics" or the "Company")

Portfolio Company Update: Galy Co. Enter 10-year, US$ 50 Million Partnership

Agronomics (ANIC:LSE), the leading listed company focused on the field of cellular agriculture, is pleased to announce that portfolio company Galy Co. ("GALY") has entered a 10-year, US$ 50 million partnership with Japanese manufacturer Suzuran Medical Inc. ("Suzuran") to use thousands of tons annually of the startup's lab-grown cotton in its products. Suzuran has been working with GALY since 2021 when they completed a proof-of-concept evaluating the quality of the fibers. Under the new partnership, Suzuran will use the GALY cotton, grown from cells instead of plants, in products such as cosmetic cotton and cotton sheets, and medical products such as gauze and absorbent cotton for medical and consumer use, according to Yasuhiro Kunieda, company president.

GALY is a leading plant cell culture company with disruptive technology for growing cotton (and other crops) from cells in a laboratory facility rather than utilising traditional soil-based methods. It is headquartered in Boston, US, with research and scale-up also based in Sao Paulo, Brazil.

Agronomics first invested in GALY in 2020, with a US$ 0.5 million investment, and again in 2022 with a further US$ 1 million investment. Agronomics carries this aggregate position in its accounts at a book value of US$ 3.47 million, representing an unrealised gain on cost of US$ 1.97 million.

Luciano Bueno, GALY's founder and CEO commented:

"It's huge, we believe it is the first-time lab-grown cotton will enter any market worldwide. With all our success in our product development, solidifying our partnership with Suzuran, and the industry interest across products, we're in a very exciting spot right now, with hopes to commercialise in the next few years"

Jim Mellon, Co-Founder and Executive Director of Agronomics said:

"We're delighted with GALY's progress in their mission to revolutionise cotton production, safeguard our environment, and disrupt conventional agriculture. GALY has successfully demonstrated its ability to produce cotton from plant cells and Agronomics sees huge potential for other opportunities to arise from this technology. We're looking forward to working with the team on their exciting new growth phase."

About Galy

Founded in 2019, GALY is producing cotton grown from cells in a facility, not plants in a field. They have developed a process to grow cotton (and other products) in vitro that is 10x faster, uses 80% less resources, independent of land or weather, and with the potential for 5x-10x higher margins than traditional products.

About Agronomics

Agronomics is a leading listed company with a focus on cellular agriculture and cultivated meat. The Company has established a portfolio of over 20 companies in this rapidly advancing sector. It seeks to invest in companies owning technologies with defensible intellectual property that offer new ways of producing food and materials with a focus on products historically derived from animals. These technologies are driving a major disruption in agriculture, offering solutions to improve sustainability, as well as addressing human health, animal welfare and environmental damage. This disruption will decouple supply chains from the environment and animals and improve food security for the world's expanding population. A full list of Agronomics' portfolio companies is available at https://agronomics.im/.

About Cellular Agriculture

Cellular Agriculture is the production of agriculture products directly from cells, as opposed to raising an animal for slaughter or growing crops. This encompasses cell culture to produce cultivated meat and materials, and fermentation processes that harness a combination of molecular biology, synthetic biology, tissue engineering and biotechnology to massively simplify production methods in a sustainable manner.

Over the coming decades, the source of the world's food supply traditionally derived from conventional agriculture is going to change dramatically. We have already witnessed the first wave of this shift with the consumer adoption of plant-based alternative proteins but today, we are on the cusp of an even bigger wave of change. This is being facilitated by advances in cellular agriculture. This change is necessary, given scientists' claims that if we maintain existing animal protein consumption patterns, then we will not meet the Paris Agreement's goal of limiting warming to 1.5℃.

AT Kearney, a global consultancy firm, projects that cultivated meat's market share will reach 35% by 2040. This combined with the Good Food Institute's estimate that a US $1.8 trillion investment will be required in order to produce just 10% of the world's protein using this technology, means that we are on the cusp of a multi-decade flow of capital to build out manufacturing facilities. Funding in the field of cellular agriculture is accelerating, however, still, less than US$ 5 billion has been invested worldwide since the industry's inception in 2016.

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