BioHarvest Sciences Inc has revealed plans to raise up to US$5 million via convertible notes, which it says will finance the growth plans for its polyphenols/antioxidants and cannabis business lines.
"Our unprecedented achievements to date in the development and commercialization of our proprietary platform technology presents an opportunity for investors to enjoy the expected success of the company as it scales its operations for both business verticals,” CEO Ilan Sobel said in a statement.
Sobel told shareholders that the company's share price - impacted by geopolitical uncertainties - undervalues the firm given its leadership in plant cellular biology, wealth of IP and operational performance.
A convertible loan instrument, with conversion deferred for one year, avoids dilution at the current share price, he added.
READ: BioHarvest Sciences reports 1Q sales of flagship nutraceutical VINIA product increased by triple digits year-on-year
“This US$5 million financing gives us the required marketing resources to accelerate the building of our VINIA revenue and customer base as well as provide the capital needed to commence cannabis production in Israel in H2, both of which are major 2022 priorities which will significantly increase the enterprise value,” Sobel said.
The notes will be denominated in Canadian dollars (around C$6.3 million) for a term of 24 months, and pay interest of 6% per annum.
They are convertible as to principal and accrued interest into shares of the company any time following one year from their issuance date at a price equal to the closing market price of the shares on the date of conversion, less a discount of 25% if the closing price is $0.50 per share or less and 20% if the closing price is above $0.51.
In any event, the floor price will not be less than $0.26 per share and not higher than a ceiling price equal to $0.65 if converted within 90 days of the anniversary date, $0.75 if converted between 91 and 180 days, $0.85 if converted between 181 and 270 days and $0.95 thereafter.
BioHarvest will have the option to redeem all or any part of the notes for the principal amount outstanding plus accrued interest at any time if either the company lists on a more senior stock exchange, or the company completes debt or equity financings for gross proceeds in excess of US$10 million following the issuance of the notes.
BioHarvest has developed a patented bio-cell growth platform technology capable of growing the active and beneficial ingredients in fruit and plants at industrial scale, without the need to grow the plant itself.
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