Evolva secures funding for 2023, but new stipulations still require strategic transaction considerations
26 Jun 2023 --- Following Evolva’s revocation of all 2023 guidance in light of negotiations with its financing partner, Nice & Green, the two companies have signed an agreement securing its financing until the end of the year.
The companies stress that the review of strategic alternatives, which could include a sale of Evolva, will continue throughout the year.
Last week’s announcement came on the heels of record revenue for much of 2022 spurred on by vanillin sales and the company’s recent multi-year and US$39 million vanillin supply agreement.
Differing interpretations
At the beginning of 2022, Evolva entered an agreement with Nice & Green for additional incremental financing lines of up to US$13 million, in addition to the US$17.4 million it had already secured for a total of US$30.4 million.
The company states that at the end of May 2023, it still had US$13.4 million in undrawn financing but was informed that its financier had a different interpretation of the financing’s terms which led to the revocation of the company’s 2023 guidance early last week.
The new agreement again consists of US$13.4 million in financing lines it says are convertible to shares of the company. Furthermore, the company has access to up to CHF 5.25 million (US$5.9 million) until the end of the year.
An additional US$3 million could be available as well, but this depends on whether Nice & Green is able to sell a certain volume of Evolva shares in the meantime.
Defining the deal
According to Evolva, the deal sets the interest rate according to the three-month Swiss Average Rate Overnight compound interest rate plus 200 basis points until the end of December 2023 on the unconverted US$5.9 million.
Additionally, the deal included a structuring fee of 5% and set the minimum share price at US$1.57 and Evolva is now required to ensure there is a sufficient amount of capital to meet its financier’s conversion request. Therefore, the company plans to again convene an extraordinary general meeting in a bid to increase its conditional capital.
A final condition states that any remainder of the US$13.5 leftover after the end of 2023 can be accessed, but only if the company’s market value is a minimum US$28 million. Moreover, Nice & Green can terminate the agreement and request payment in cash of any unconverted monies if the minimum market value is not met.
Edited by William Bradford Nichols
