Harvest Technology Raises $500,000 via Convertible Notes at 1.6c Conversion Price
Harvest Technology Group has raised $500,000 through unsecured convertible notes with a 15% annual interest rate, supporting its strategic three-year profit plan. The notes include attached options exercisable over two years, pending shareholder approval.
- Raised $500,000 via unsecured convertible notes
- Notes carry 15% annual interest and mature in 3 months
- Conversion price fixed at 1.6 cents per share
- Two-year options issued at 3 cents exercise price
- Funding supports company’s 3-year pathway to profitability
Convertible Note Raising Details
Harvest Technology Group Limited (ASX – HTG) has confirmed a $500,000 capital raise through the issuance of unsecured convertible notes to sophisticated investors via Alto Capital. The notes, each with a face value of $1,000, carry a relatively high annual interest rate of 15% and mature in just three months. This short maturity period suggests the company is seeking quick access to funds while providing investors with an attractive yield.
The notes are subordinated to existing secured convertible notes, indicating a layered capital structure where these new notes rank below previously issued secured debt. This positioning may reflect the company’s current financing strategy and risk profile.
Conversion and Options Terms
Upon maturity or earlier shareholder approval, the notes will convert into ordinary shares at a fixed price of 1.6 cents per share. Additionally, investors will receive one option for every share issued on conversion. These options have a two-year lifespan and an exercise price of 3 cents, providing potential upside if the company’s share price appreciates.
However, the conversion and option issuance are contingent on obtaining all necessary shareholder and regulatory approvals under ASX Listing Rules and applicable laws. Should these approvals not be granted, the company will redeem the notes in cash, mitigating dilution risk for existing shareholders but potentially increasing cash outflows.
Strategic Implications
Harvest Technology’s CEO, Ilario Faenza, emphasized the importance of this funding in supporting the company’s three-year pathway to profitability. The injection of $500,000, while modest, signals ongoing investor confidence and provides working capital to advance the company’s remote operations technology solutions.
Harvest Technology specializes in ultra-low bandwidth network-optimized livestreaming for remote field services, a niche with growing demand as industries seek efficient remote monitoring and control capabilities. This capital raise may help the company scale operations or invest in product development to capture further market share.
Risks and Considerations
Investors should note the subordinated nature of the notes and the short conversion window, which could influence liquidity and valuation outcomes. The requirement for shareholder approval introduces an element of uncertainty regarding the timing and extent of share dilution. Furthermore, the exercise price of the attached options is nearly double the conversion price, suggesting a cautious optimism about future share price appreciation.
Overall, this funding round reflects a pragmatic approach by Harvest Technology to balance immediate capital needs with longer-term shareholder value creation.
Bottom Line?
Harvest Technology’s convertible note raise underscores a critical funding step, with shareholder approvals now the key hurdle to unlocking equity conversion and future growth.
Questions in the middle?
- Will shareholders approve the conversion and option issuance as planned?
- How will the new convertible notes impact Harvest Technology’s capital structure and share dilution?
- What milestones does Harvest Technology aim to achieve with this funding on its path to profitability?
