The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Just been scanning last years annual report ( that covered 2022 )
To protect the continuity of the
Group’s operations, sufficient liquidity and capital has to
be maintained. The Group aims to have funds to finance
its operations for the foreseeable future. The Group can
influence the amount of capital by adapting its cost basis
considering available financing. Management monitors
liquidity on the basis of the amount of funds. These are
reported to the Board of Directors on a monthly basis.
The Company’s Board of Directors approves
the operational plans and budget and monitors the
implementation of these plans and the financial status of
the Group on a monthly basis.
On 28 February 2022, Faron entered into agreement with
IPF Fund II SCA (IPF), which contained
• a Euro term loan facility (Tranche A) of up to 10
million euro,
• a Euro term loan facility (Tranche B) of up to 5
million euro,
• the possibility of Faron to request up to an additional
15 million euro facility (Tranche C), subject to IPFs
approval process and certain conditions to be met,
• Faron to issue warrants to IPF as part of the loan
agreement, based on the amount drawn in the
above facilities
The first tranche (Tranche A) of EUR 10 million was
drawn down upon signing the agreements. Faron pays a
cash interest on drawn amounts of the above facilities plus
a pay-in-kind interest (PIK) for drawn amounts in Tranche
A. In addition, Faron has paid a structuring fee of the
committed facility on the utilization date of the respective
facility. Tranche A has been measured at amortised cost
using the effective interest method. The carrying amount
of the Tranche A was EUR 9,557 thousand.
The interest on Tranche A facility amounted to EUR
1,225 thousand. The loan facility is subject to financial
covenants. The covenants measure the Group’s gearing
ratio and cash runway. Given that some of the inputs to
the valuation technique rely on unobservable market data,
loan fair values are classified in Level 3.
Liabilities designated at fair value through profit or loss
primarily represent warrants which entitle IPF to subscribe
for new ordinary shares in the Company. The subscription
price per share is the lower of EUR 1,85 or the subscription
price per share in any subsequent share offering
undertaken by the Company. The warrants were issued as
part of the loan agreement for no consideration paid and
have been treated as a separate financial instrument. On
initial recognition of the agreement, the fair value of the
loan facility was reduced by the structuring fee and other
fees that are integral part of the loan and by the implicit
costs of the warrants. On subsequent reporting dates the
changes in fair value of warrants have been accounted
separately through profit and loss. The warrants are
classified as level 2 instruments and their fair value is
determined using techniques whose inputs are based on
observable market data
having 4 million was the issue as we were supposed to have 6 in the bank at all times to satisfy the nervous nellies at ipf .
how we went into the red by nearly 2 million is still the ( 2 million euro) question , knowing that by letting that happen it would trigger pandemonium .
the acceleration of bexmab was costly - burning more than they originally planned - but they were getting the patients recruited and fast . top sites probably don't come cheap , but what i don't get is that they would see this coming , and worst case , just do another 5-7 mil placing with usual suspects - and we gain another 3-4 months of breathing space .
that's what i can't work out . what else was going on - that mean't they weren't looking at a placing ?
two other less obvious scenarios - one that luch touched on also -
1.) that they did this on purpose in some kind of proactive self defence . we don't know the details of the ipf agreement - but we do know that its been renegotiated once - and ipf got some very cheap options out of it . pure speculation , but perhaps faron saw this as a ' call my bluff' moment - allowing them to straighten things out on their own terms , albeit a bit of a nuclear option in the short term . this is a family company - very honest - but also very protective , and fiercely proud of what they have achieved , and who has helped them get to where they are .
2.) that during heightened negotiations - promises were made - and then broken - leaving faron high and dry . that's it - simple **** up . they can't say much else as they are doing what they can . if ipf don't play ball , then they'll just have to wait for the agm . the march13th day should answer the basics . i would then say its most probable that having gone this far into the abyss - faron might as well do one big final raise - say £15-20m , we all take it on the chin - and push bexmab through to completion . we are so close now .
knowing whats coming with bexmab - if that can get us to the point of finally commercialising bex , and then obtaining a partner for long term development - it will be worth it .
Strictly, snipers prey
They all need……Traumakine
We need something.. even if its a RNS saying we have a solution we are working on and all is well!
We have 4 plus million cash, what's the issue!
Does someone want to takeover the company at such a low SP?
Nokia lost our cause they were in the sauna too long.. was Nokia Finland or Sweden.. all the same from here!
The BOD and big investors aka Timo can't be happy plus the pension funds and euro money grants ect..
We need to ask big questions at the next Q&A
The CEO Trust the CFO to do their Job.. is this why the last CFO left? Did he mess up? Is. The new CFO to blame.. put a head on the block, that normally gives the markets confidence!
I bought more last week after the RNS so I'm invested here!
Also in for the long haul so SP today, doesn't mater if we strike a good deal!
Lastly.. do you get exrea points if you end sentences with a !
…if SNG belong to that list too?
The 14th was updated to 13th!
Now they have at least three weeks between the presentation and the AGM. The invitation to the AGM needs to be presented at least three weeks before the meeting and now it can be presented even two days after the presentation.
Add DEST to that list - it was like open season yesterday !
Mind you we are up 6% on the Nas today - nothing too much to celebrate , but feels like maybe they are getting ready to blow the tanks and get this submarine off the seabed .
New date for AGM in April now Fri April 5th ( instead of March22nd)
I'm no expert , but I assume they need to pass something at AGM to enable a rights issue ( should it be required - it was only an option they wanted to enable should they need it )
Handy for me anyway - as we'll be into the new tax year and I can set some more in my Isa should that occur .
A good month away - so who knows what may happen in between .
It’s like snipers alley.
GDR bang …… gone
COPL bang …… dead as a dodo
FARN bang …… on life support
AVCT bang ……. CPR needed
So when is the rights issue expected to be announced?
So we will have an update and briefing followed by Q&A on the 14th March , followed by the AGM just over a week later on the 22nd .
Glad they will have a briefing from Markku too , along with analyst Q&A , and James O Brien will be there too .
Whether we will ever get to know the full story of how this situation unfolded or not , who knows ?
But either way , its reassuring that we will get some answers , along with how they have best planned to get Bex to market , and bring value back to the company and shareholders .
Thanks Sax. Yeah I don’t feel like we will get progress update until Faron get their house in order.
I was hoping for some clarity by now but the way goes on…..
Yeah at least for now the sp has stopped bleeding heavily!
The only tip I can give you , and its hard to follow when you think you are gonna miss out , but top up in two or three amounts , giving a few days between buys . I actually followed my own advice this time and got two buys in the 120s . Will it drop lower - who knows . It seems to have settled , and I'm not expecting much more news now until something is resolved . Any clinical update coming out now would seem somewhat inappropriate ( but who knows ) . Anyway , Good luck Santhi . At least we haven't had an influx of trolls and doom mongers here . It is what it is - and we await news .
Trying to decide when is the right time to average down. Last time I tried this it was at 190 and then the next dropped another 30% 🙄
Hardly a major sale ( less than 1% of his holding - 0.93% of 13,410,336 )
He's been a rock right through thick and thin .
Despite the last few weeks shenanigans , we mustn't lose sight of where we are actually at with Bex .
Once this financial hiccup is sorted - the company can furnish us with the latest Bexmab update , which everyone must assume is going to be a cracker .
There was no RNS about it,but after Share Issue there is noticed how many new shares he got.
Would there be a holdings RNS if he sold in Helsinki?
Look at Farons homepage shareholder september 2023,he sold about 125000 shares in Helsinki then,something in LSE maybe too.
I don’t remember seeing a holdings RNS that confirmed that?
Before last share issue Timo sold shares and bought back in issue.
-Timo is selling this 10000 in LSE?
Sax has certainly helped Avacta by highlighting the ridiculous fall in its share price.
Always knowledgeable and explains his rationale.
Let’s hope Faron sorts itself out.
Sax you have been a stalwart here and your level headed logical postings have been a breath of fresh air. Apologies for my “indigestion” jibe - an attempt to lighten the mood. GLA
Thanks Sax. I was so confident in the company and trusted Marku and the team. Now I’m left wondering if I’ve made another bad investment decision.
Will be a tough few days just waiting for more information. Good luck to all here
As a side note - look at Avacta - massive potential . Last science day SP was at £1.50 ish . Yesterday 77p . Nothing has changed - they are still making progress -no financial issues - but they are under short attacks , and full on campaign to lower SP . They do have a very large number of PI holders , and for some reason there is the ability in the shady corners of the market to create these situations . But loyal holders will maybe try and trade a bit themselves , buy the dips and wait for the return to form , as they know the company will be worth at lot more than 77p . Likewise here . Good luck . We've had it easy compared to some shares . I wish them well . Poor old shareholders certainly getting a kicking all over the market at the moment .
Hi Santhi . Yes I'm here ( just been on a 3 day walking holiday) . Plenty of time to chew things over in my mind , but to be honest with what we've been given , it's hard to come to any firm conclusion .
Faron a have up until now been perfectly capable of raising small to medium amounts to get them to the next milestones .
Placings often over subscribed . Loyal shareholders , and they have been a shining example of how to conduct yourself . Multiple grants , and recently high profile tie up with LLS opening doors to the premier cancer treatment centres in the US .
The IPF relationship , although welcome at the time - has caused problems . The cash buffer requirement has been a constant factor in raising funds , and the previous re- negotiation , came after a period where the SP dipped into the 180's - and IPF came out of that with a much better hand . I don't think we have ever been given the full details of the IPF agreement - so we don't know about any small print . But compared to say a normal loan - IPF seem to have a lock over Faron with some severe penalties , and some other share price related conditions .
So - how did we get here ?
The accounting error reason initially seemed the most obvious - but I just can't see that as the case . Maybe it is and we are stuck in a pickle while Markku tries to get the company back on its feet ( a month to sort it won't be a complete disaster - but it will be massive egg on face moment) but I really don't see it . It's like running out of petrol on the way to church on your wedding day . They can't be that careless.
So that leaves us with IPF pulling some kind of stunt ( either alone or in step with someone else ) . For reasons to benefit either them ( some kind of extra cheap warrants/ options) that was in the contract ? Who knows . But also - surely it wouldn't do their reputation much good if future partners with them see how they are prepared to wreck a company for their own gain .
So the third option is that a deal was being finalised - funding was expected - but for some reason didn't arrive - and this situation occurred . IPF were handed this situation - and had full right to renegotiate their hand again - thank you very much . The SP tank will probably help them - so no rush in sorting it out while share not suspended .
Markku will not panic . There 'WILL' be options he can take . What they are doing now I suspect is working through waht will be best for the company ( and shareholders to a lower degree , and remember they are large holders themselves) in the longer term . They have by whatever reason - now got a chance to make themselves a bit less vulnerable .
So - for now - I am over the worrying stage . Out of our hands - all we can do is buy/sell /hold . I have read enough about the company to be confident in their abilities - and have belief in Bex .
I apologise if people have over invested here and are distraught - due to my ramping/ ultra positive nature .
I personally doubt I have that much effect , but I don't think I have ever spun a mistruth on here - just posted my thoughts , and presented facts - albeit with the Sax vibe attached .
Anyway - good luck all in what you do . I'm here anyway .
One thing's for sure Is SHs are going to find out how much exactly Faron IS worth. IF IF Bex Is as good as Markku mentions In that last presentation. Serious Billions If I heard him clearly. We SHS must remember who our Major Investors are. Look It up on FARON website. Check yourself.... names shortened...as of 31st OCT 2023 Citi Bank....Scandinava Banken......Varma Pension Fund........Nordea Life Fund.... Jalkanan Family (4)..... Varitas Pension Insurance etc. Which makes It more unusual. Why this happened. Was The rug pulled ??. For what reason. Was there phone calls from IPF that settlement was overdue???.
IF so It's hard to Imagine that Faron couldn't have fixed quickly. Was there a Major Pharma Deal In the offing and scuttled?. When you see what has happened this week IF there are Interested parties. A deal with a Major Pharma Is It seems the way to go for Faron. Whom can they trust for funding In the future ?. With the huge amounts Major Pharma's pay for Preclinical Drugs. Faron with a more advanced pipeline must be a very attractive proposition. BOL to us all anyway. AIMO.