Halifax consumer health products maker Origin BioMed is receiving a $350,000 investment from Nova Scotia Business Inc. which it plans to use to continue its recovery from a cash crisis earlier this year.

In an interview, Executive Chairman Carlo Shimoon said the investment that has been approved by the NSBI Board is part of a $1 million round of equity financing that will be used largely for marketing in the next six to nine months, at which time the company hopes to be cash-flow positive and ready for another funding round. The other parts of the funding are to be announced later.

He added that the company has stabilized since he was appointed by shareholders in February to turn the venture around.

“The company was having some severe cash flow problems and didn’t know where the next payroll was coming from,” said Shimoon, who is also the CEO of iMPath Networks, another company NSBI has invested in. “We stepped in and got control of the costs over a period of three or four months.”

Last September, the company -- which manufactures and markets Neuragen, natural pain relief for diabetes sufferers, which is sold at more than 20,000 stores  -- seemed in good health when it landed $2 million in funding -- $850,000 from NSBI, $650,000 from Avrio Ventures of Calgary and $500,000 from GrowthWorks Atlantic. That built on the total of $4.5 million that the three VC funds had already sunk into Origin in the previous year. Other investors, including members of the First Angel Network, had also invested in the company in the past.

In total, NSBI has invested $6.6 million in Origin BioMed.

Shimoon himself is vague on what happened to Origin BioMed before he joined the enterprise in February. The company had a “couponing program” in the U.S. that backfired, and it released a cream-based product, which led to mass returns of its original oil-based product, creating liabilities in its accounts with several large retailers. Even though it sold product early this year, the proceeds only went to reduce these liabilities and the company had no cash flow coming in. Then the CEO and CFO both left within a month of each other.  

Shimoon says it’s an “understatement” to call it a cash flow problem, and he took immediate steps to reduce costs. He had to lay people off, move the business from its downtown location to Bayer’s Lake and revamp the accounting department.  He took on short-term loans to keep the business going, and did a bit of marketing to generate some revenue.

As a result, Origin BioMed’s costs are now 45 percent lower than they were in February, and sales are 50 percent higher. Yet Shimoon said it will still likely be six to nine months before the company is cash flow positive (which means that the money coming in each month exceeds that going out).

The plan now is to scale up marketing and raise revenues to continue the recovery. If everything proceeds as planned, the company hopes to attract a full-time CEO.