Faron Pharmaceuticals Oy has announced that it has obtained binding commitments for convertible loans totaling EUR 3.2 million from existing shareholders. This funding will enable the company to make critical payments and continue preparing alternative short- and long-term financing options. The company has received active participation in the round by early investors, allowing it to secure its immediate short-term financing needs until the end of March 2024. Additionally, the Board intends to propose an authorization for a larger share issue at the Annual General Meeting to secure longer-term funding.

The company is actively working to secure longer-term funding and is in continuous discussions for this purpose. It is also in need of approximately EUR 5 million of further short-term bridge financing. The next BEXMAB readout is expected to be provided to markets in mid-March, and the company anticipates needing EUR 35 million in total to complete the enrollment of the phase 2 of the BEXMAB study and to obtain regulatory feedback from the FDA.

The company was previously in breach of several undertakings agreed in the secured debt agreement with IPF Fund II SCA, SICAV-FIAR, resulting in the blocking of its bank accounts. However, based on the commitments received, IPF has allowed the company to make certain critical payments and has agreed to waive certain Events of Default under the terms of the Facilities Agreement. The receipt of the EUR 3.2 million pursuant to the Loans enables the company to secure its immediate short-term financing needs until the end of March 2024.

The Board of Directors of Faron intends to propose to the Annual General Meeting an authorization for a larger share issue, which is contemplated to be launched as a public offering. This offering is planned to have allocation preferences to existing shareholders and bridge finance lenders, including the Investors to enable the conversion of the Loans. The company is actively working to secure funding for 2024 and ensure the uninterrupted continuation of its operations.