Havn Life Sciences faces bankruptcy, cash crunch cuts trail
Havn said he is actively seeking new funding, but that may not be successful.
Havn Life Sciences (CSE:HAVN) (OTC:HAVLF) is looking to restructure after announcing that it would not be able to service its debt without a new coin.
“There can be no assurance that the restructuring will be successful or that the company will be able to obtain a new source of financing,” Havn said in a press release.
The Canadian Psychedelic Research Society said it was actively seeks funding to support ongoing operations.
The news comes as the psychedelic sector continues to sway amid a slowing broader economy and regulatory inertia from federal lawmakers.
Havn originally planned to develop a library of psychoactive compounds designed to support a standardized supply chain of psychedelics that researchers could use for clinical trials.
In 2020, Health Canada licensed the company to possess certain amounts of psilocybin for research and development of quality control methods. The green light also allowed the company to diversify its business and manufacture natural health products.
However, turning promise into profit has not been so easy.
Over the past year, the company has M&A deals dropped and continued to wave red flags to investors when it opted to issue a 30-1 reverse split in July to bolster its stock and secure a private placement.
Haven too finalized Debt financing worth C$9 million to cover its cash burn despite the company’s market capitalization of C$1 million. The company cannot issue more monthly convertible debentures if the investor owned more than 10% of the company.
Havn reported gross profit of C$89,700 last fiscal year, but a gross loss of C$22 million, nearly half of which was directly attributable to operations, according to regulatory filings.