BioHarvest Sciences Inc. (NASDAQ:BHST) has strengthened its finances by pulling in $10.9 million in fresh investment and trimming $3.8 million in debt through a series of deals involving warrants and convertible notes.
The biotechnology company said Monday the transactions leave it with total debt of about $6.6 million, split between $3.6 million in short-term borrowings and $3 million in long-term obligations.
The moves, according to management, were designed to ease debt pressure and add cash to fund growth projects.
The company raised $5.8 million after nearly 900,000 warrants were exercised, essentially options that gave investors the right to buy shares at a fixed price.
It also issued $5.1 million of convertible notes, which are loans that can later be swapped for equity. Those notes were immediately converted into common shares.
On the debt side, BioHarvest converted $1.8 million of existing convertible notes into stock. Another $1.4 million of long-term debt was repaid when lenders chose to exercise more than 200,000 warrants, and $600,000 of short-term borrowings were repaid through share issuance.
In total, more than 2.2 million new shares were issued as part of the restructuring.
Chief executive Ilan Sobel called the overhaul “a pivotal capital markets milestone” that strengthens the company’s financial footing.
“[It helps] to fortify our balance sheet by adding incremental cash and significantly reducing our debt levels, while concurrently providing us with the financial flexibility to accelerate our growth initiatives across both our Products and CDMO services divisions,” Sobel said.
The $10.9 million cash injection will go toward building new production capacity, refinancing remaining debt and general working capital.
BioHarvest develops plant-based compounds using its patented “botanical synthesis” technology, which allows the company to grow active ingredients without cultivating the full plant.
It sells its own health supplements and also offers contract manufacturing services to outside customers.