Swiss biosynthetic company that develops ingredients and processes for nutrition, healthcare and wellness products, Evolva, has announced that its entering into a Standby Equity Distribution Agreement (SEDA) with a fund managed by Yorkville Advisors Global, LLC (Yorkville).

Under the terms of the agreement, Yorkville has committed to provide up to CHF 30 million (US$29.9 million) in equity financing over a 36 month period in individual tranches of up to CHF 1,000,000 (US$999,900) each. 

In exchange for the funds to be provided, Yorkville will receive Evolva shares at a price which will be determined anew each time a SEDA tranche is called. The shares will be placed at a 5% discount to the market price – which is in line with Swiss market practice for private placements. Evolva and Yorkville have successfully worked together on a similar basis in the 2011-2013 period.

The SEDA has been established as part of the medium-term funding of Evolva’s operations. If Evolva were to utilize the SEDA in full, the cash runway would be extended by roughly one year. It remains at the sole discretion of Evolva to determine if and when to draw from the facility. 

In return for the three year investment commitment provided by Yorkville, Evolva will pay an initial upfront fee of CHF 250,000 (US$250,000)in cash. Two additional instalments of CHF 200,000 each (settled in cash or Evolva shares) will be due when the amount drawn from the facility crosses CHF 10 million (US$9.9 million) and CHF 20 million (US$19.9 million).

Evolva will create an initial block of 25m treasury shares out of authorized capital which may be used for future share issues under the SEDA agreement or other financing purposes. At the current share price (CHF 0.59) the total commitment represents a maximum of approximately 51 million shares. At the date Evola published its information, the number of Evolva shares in issue is 399.2 million.

“The SEDA provides us with financial flexibility, which is key at our current stage. Moreover, it has a reasonable pricing, limiting dilution for our current shareholders. It is a great addition to our financing toolkit. We have worked with Yorkville before and I am confident the facility will work as smoothly as it did back then,” says Oliver Walker, CFO of Evolva.

On 10 January 2017, Evolva published a preliminary, unaudited revenue estimate for 2016 of CHF 9 -10 million (US$8.9 - 9.9million). After further analysis, the number is expected to be CHF 9.6 million (US$9.6 million). based on the unaudited 2016 numbers, Evolva’s net loss will be around CHF 36 million (US$35.9 million), versus CHF 31.8 million (US$31.7 million) in 2015. The 2016 number is in line with current market consensus. 

Cash and cash-equivalents at year-end 2016 amounted to CHF 47.5 million (US$47.49 million), as published in January. The complete, audited financials will be published on 30 March 2017 and the Annual General Meeting of shareholders will take place on 16 May.