TURKU, FI / ACCESS Newswire / August 7, 2025 / Faron Pharmaceuticals Ltd. (AIM:FARN)(First North:FARON), a clinical-stage biopharmaceutical company developing novel immunotherapies, announces that the Company has approved the exercise of 857,322 special rights entitling to 857,322 existing treasury shares, for an aggregate subscription price of EUR 1,682,067, in connection with an advanced amortisation payment of the First Tranche Bonds (as defined below), which will occur latest on 8 August 2025. In addition, the Company has made the second scheduled amortisation payment of the First Tranche Bonds in cash on 2 August 2025.
The Company announced on 3 April 2025 that it had entered into a convertible bond arrangement for up to EUR 35 million with an entity managed by Heights Capital Management, Inc. (“ HCM “) and resolved upon the issuance of amortising senior unsecured convertible bonds with an aggregated principal amount of EUR 15 million (the “ First Tranche Bonds “) due 2 April 2028 to HCM, convertible into new and/or existing shares in the Company (the “ Shares “). HCM (or any future holders of the majority of the First Tranche Bonds) may, at any time between scheduled amortisations, exercise their right to bring forward up to two (2) additional amortisation payments (an “ Accelerated Amortisation “) to be paid in advance, with a limit of no more than nine (9) Accelerated Amortisations in the first year of the term of the First Tranche Bonds. As previously announced, the Board of Directors of Faron has resolved to make amortisations and interest payments by converting the relevant amounts due into Shares (“ Share Settlement Option “), unless it separately decides to make payments in cash. The exercise of the Company’s Share Settlement Option is effected by the bondholders exercising special rights entitling into Shares, as referred to in Chapter 10 of the Finnish Companies Act (“ Special Rights “), issued in connection with the issuance of the First Tranche Bonds.
The Company has on 6 August 2025 received an amortised payment advancement notice from the bondholder for an aggregate amortised payment amount (including accrued interest) of EUR 1,682,067. As the Company has exercised its Share Settlement Option, the subscription price for the Shares subscribed for by the bondholder is EUR 1.962 per Share, corresponding to 90 per cent of the lowest of (i) the volume weighted average price (“ VWAP “) of a Share on the relevant payment date, and (ii) the lowest of the VWAPs of a Share on each of the five consecutive dealing days ending on (and including) the dealing day immediately preceding the relevant payment date]. Therefore, the Company has approved the exercise of 857,322 Special Rights entitling to 857,322 existing treasury Shares, for an aggregate subscription of EUR 1,682,067. The subscription price for the Shares subscribed for pursuant to the Special Rights is paid by setting off the Company’s debt to pay relevant amounts due under the First Tranche Bonds and recorded into the reserve for invested unrestricted equity. The new Maturity Date of the Bond is 2 December 2027.