REG - Faron Pharma. Oy - Issue of Warrants to IPF Funding Update

Faron Pharmaceuticals OyAnnouncement

28/03/2024 07:00

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RNS Number : 6058I  Faron Pharmaceuticals Oy  28 March 2024

Faron Pharmaceuticals Oy

("Faron" or "Company")

 

Issue of Warrants to IPF

Funding Update

Company announcement, March 28, 2024 at 3 AM (EDT) / 7 AM (GMT) / 9 AM (EET)

 

TURKU, FINLAND / BOSTON, MA - Faron Pharmaceuticals Ltd. (AIM: FARN, First
North: FARON), a clinical-stage biopharmaceutical company pursuing a CLEVER
approach to reprogramming myeloid cells to activate anti-tumor immunity in
hematological and solid tumor microenvironments, today announces that Faron
has committed to granting IPF special rights entitling to subscribe for
ordinary shares of the Company against payment ("Warrants") in addition to the
warrants created on February 28, 2022.

 

IPF Warrants

 

As was announced by the Company on March 4, 2024, pursuant to the waiver
regarding certain events of default ("Waiver") under the terms of the secured
debt agreement with IPF Fund II SCA, SICAV-FIAR ("IPF") as Lender and Faron
Pharmaceuticals Ltd as Borrower ("Facilities Agreement"), the Company shall
issue to IPF additional special rights which entitle them to subscribe for new
ordinary shares in the Company ("Warrants"), with an exercise price equal to
the volume-weighted average price of the Company's share during the three
trading days preceding the date of the Waiver ("Strike Price"). The Strike
Price shall be the lower of either EUR 1.63 (equivalent to the terms of the
Waiver) or the subscription price per share in any subsequent share offering
undertaken by the Company. The number of Warrants primarily issued to IPF is
calculated by dividing 10% of the original loan amount (EUR 10 million) by the
Strike Price, subject to certain adjustments in accordance to the terms of a
warrantholder agreement entered into between the Company and IPF
("Warrantholder Agreement"). The Warrants are exercisable for a period of
seven years.

 

In accordance with the Waiver and the Warrantholder Agreement, on March 27,
2024, the Board of Directors of the Company, based on the authorisation
granted to the Board by shareholders at the Company's Annual General Meeting
held on March 24, 2023, resolved upon a warrant program directed to IPF.
Pursuant to the warrant program, the Warrants are issued without
consideration. The Warrants are issued as a part of the negotiated funding
arrangement with IPF and therefore, from the Company's point of view, there is
a weighty financial reason for the program and the issuance of Warrants
thereunder.

 

Pursuant to the Warrantholder Agreement, a preliminary amount
of  613,496  warrants were issued on March 27, 2024 to IPF. The maximum
total number of warrants to be granted pursuant to the Warrantholder Agreement
is 1,500,000, and the Board of the Company shall cause the registration of the
remaining 886,504 warrants after the Annual General Meeting 2024 of the
Company, scheduled to be held on April 5, 2024. Should the Annual General
Meeting 2024 of the Company resolve not to approve the proposal made to the
Annual General Meeting to authorise the Board to resolve on the issuance of
special rights entitling to shares in the Company, the Board shall convene an
Extraordinary General Meeting of the Company to authorise the Board to issue
such additional number of special rights as is required to satisfy the maximum
total number of warrants to be granted pursuant to the Warrantholder
Agreement. Each warrant entitles its holder to subscribe for one new share in
the Company, and the number of shares in the Company may be increased by a
maximum of 613,496 shares as a result of the exercise of the warrants now
issued to IPF and should the maximum amount of warrants be issued to IPF, the
number of shares in the Company may be increased by a maximum
of 1,500,000 (when taking into account the 613,496 shares already issued)
as a result of the exercise of said warrants. The warrants may be exercised
for a period of seven years. Pursuant to the terms of the Warrantholder
Agreement the number of warrants to be issued to IPF may be further increased
upon (and subject to) agreed adjustment events so that the total number of new
shares in the Company (as a result of the exercise of the exercise of the
warrantes) multiplied by the (adjusted) Strike Price is equal to EUR 1,000,000
(minus any amounts already paid). The terms and conditions of the warrants are
attached to this announcement and will be available on the Company's website.

http://www.rns-pdf.londonstockexchange.com/rns/6058I_1-2024-3-27.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/6058I_1-2024-3-27.pdf)

 

Funding Update

 

Further to the Company's announcement on February 19, 2024 regarding the
Events of Default with IPF, and the subsequent announcements in regards to the
Company's ongoing financial position, the Company confirms that it is in
advanced negotiations with various investors in order to secure immediate
funding.

 

The Company's current cash balance is sufficient to allow the Faron to
continue its operations into April 2024, however whilst the Company is in
advanced negotiations to complete the remaining bridge financing of
approximately EUR 5 million shortly, the Company notes that there is no
guarantee that the required funds will be raised.

 

The Company will update the market in due course of any material developments
as soon as practicable.

 

 

For more information please contact:

 

Investor Contact

LifeSci Advisors

Daniel Ferry

Managing Director

daniel@lifesciadvisors.com (mailto:daniel@lifesciadvisors.com)

+1 (617) 430-7576

 

ICR Consilium

Mary-Jane Elliott, David Daley, Lindsey Neville

Phone: +44 (0)20 3709 5700

E-mail: faron@consiliumcomms.com (mailto:faron@consiliumcomms.com)

 

Cairn Financial Advisers LLP, Nomad

Sandy Jamieson, Jo Turner

Phone: +44 (0) 207 213 0880

 

Peel Hunt LLP, Broker

Christopher Golden, James Steel

Phone: +44 (0) 20 7418 8900

 

Sisu Partners Oy, Certified Adviser on Nasdaq First North

Juha Karttunen

Phone: +358 (0)40 555 4727

Jukka Järvelä

Phone: +358 (0)50 553 8990

 

About Faron Pharmaceuticals Ltd.

 

Faron (AIM: FARN, First North: FARON) is a global, clinical-stage
biopharmaceutical company, focused on tackling cancers via novel
immunotherapies. Its mission is to bring the promise of immunotherapy to a
broader population by uncovering novel ways to control and harness the power
of the immune system. The Company's lead asset is bexmarilimab, a novel
anti-Clever-1 humanized antibody, with the potential to remove
immunosuppression of cancers through targeting myeloid cell function.
Bexmarilimab is being investigated in Phase I/II clinical trials as a
potential therapy for patients with hematological cancers in combination with
other standard treatments treatments and as a monotherapy in last line solid
cancers. Further information is available at www.faron.com.

 

 

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