Faron Pharmaceuticals Ltd | Stock Exchange Release | April 03, 2025 at 09:00:00 EEST

Inside Information: Faron enters into an up to EUR 35 million convertible bond arrangement to repay its secured loan to IPF and strengthen its financial position, and issues first tranche of bonds with a principal amount of EUR 15 million

Key highlights

• Faron has entered into a convertible bond arrangement for to up to EUR 35 million with an entity managed by Heights Capital Management, Inc. and resolved to issue amortising unsecured convertible bonds with an aggregated principal amount of EUR 15 million with an option to issue, subject to certain conditions, two additional tranches of similar convertible bonds, each with a principal amount of EUR 10 million.
• Bondholders have the option to convert the bonds into shares at an initial conversion price of EUR 2.94 per share, subject to adjustments in accordance with the terms and conditions of the bonds.
• The bonds generally amortise in equal instalments every two months and the Company has the option to redeem the bonds by issue of shares against such repayment instalment or by payment in cash during the three year term of the bonds.
• In order to facilitate conversion of the bonds into shares, Faron issues special rights entitling into shares, as referred to in the Finnish Companies Act, to the bondholder in connection with the issuance of the first tranche bonds.
• The proceeds from the first tranche bonds will be used to repay the outstanding senior, secured loan from IPF and for general corporate purposes, extending the Company’s cash runway into Q1 2026 assuming that amortisations on the bonds are made in shares.
• The Company’s assets will be released from security as a result of the early loan repayment to IPF.
• The Company substantially strengthens its financial position and flexibility by reducing restrictive cash covenants with a runway extending well beyond the phase II topline readout in the BEXMAB r/r MDS study anticipated in April 2025.