Faron Pharmaceuticals
Oy
("Faron" or "Company")
Notice of Annual General
Meeting 2024
Company announcement on
March 13, 2024
at 14:00 GMT / 16:00 EET
NOTICE OF faron pharmaceuticals LTD's ANNUAL GENERAL
MEETING
Shareholders of Faron
Pharmaceuticals Ltd (the "Company") are notified of the Annual
General Meeting (the "AGM")
to be held on 5 April 2024 at 10:00 a.m. EEST (Finnish time) at
Biocity, meeting room "Presidentti" at Tykistökatu 6, FI-20520
Turku, Finland. The registration of attendees and the distribution
of voting slips will commence at the meeting venue at 9:30 a.m.
EEST (Finnish time).
The Company's Annual Report 2023 is
available for review and downloading on the Company's website
at https://www.faron.com/.
A. MATTERS ON THE AGENDA OF THE ANNUAL GENERAL
MEETING
1. Opening of the meeting
2. Calling the meeting to order
3. Election of persons to scrutinise the minutes
and to supervise the counting of votes
4. Recording the legality of the
meeting
5. Recording the attendance at the meeting and
adoption of the list of votes
6. Presentation of the financial statements, the
report of the Board of Directors and the auditor's report for
2023
Review by the CEO.
7. Adoption of the financial
statements
8. Resolution on the use of the profit shown on
the balance sheet and the payment of dividend
The Board of Directors (the
"Board") proposes that no
dividend for the financial year 2023 will be paid and that the
losses of the Company for the financial year, amounting to EUR 30.9
million (IFRS), will be carried forward to the reserve for invested
unrestricted equity.
9. Resolution on the discharge of the members of
the Board and the CEO of the Company from
liability
10.
Resolution on the remuneration of the members of the
Board
The Board proposes, on the basis of
the proposal of the remuneration committee, that the annual
remuneration of the members of the Board remain unchanged and that
EUR 35,000 will be paid to the Board members, in addition to which
an annual remuneration of EUR 35,000 will be paid to the chair of
the Board. In addition, a further annual remuneration of EUR 11,000
will be paid to the chair of the audit committee, a further annual
remuneration of EUR 9,000 will be paid to the chair of the
remuneration committee and a further annual remuneration of EUR
6,000 will be paid to the chair of the nomination committee. In
addition, a further annual remuneration of EUR 6,000 will be paid
to the audit committee members, a further annual remuneration of
EUR 5,000 will be paid to the remuneration committee members and a
further annual remuneration of EUR 3,000 will be paid to the
nomination committee members.
The Board furthermore proposes that
meeting fees will be paid to the Board members as
follows:
• a meeting fee of
EUR 1,000 will be paid to Board members per Board meeting where the
Board member was physically present, and which was held on another
continent than the member's place of residence; and
• no meeting fees
will be paid to Board members who were attending a Board meeting
but not physically present or for Board meetings held on the same
continent as the member's place of residence.
In addition, it is proposed that all
reasonable and properly documented expenses incurred in the
performance of duties of the members of the Board would be
compensated.
The Board also proposes, on the
basis of the proposal of the remuneration committee, that no
remuneration will be paid based on the Board membership of the CEO
of the Company or a person serving the Company under a full-time
employment or service agreement.
11.
Resolution on the number of members of the Board
The Board proposes, on the basis of
the proposal of the nomination committee, that five (5) members be
elected to the Board.
12.
Election of members of the Board
The Board proposes, on the basis of
the proposal of the nomination committee, that John Poulos, Markku
Jalkanen, Tuomo Pätsi, Christine Roth and Marie-Louise Fjällskog be
re-elected to the Board for a term that ends at the end of the next
AGM.
Frank Armstrong and Erik Ostrowski
have informed the Board that they are not available for
re-election.
All proposed Board member candidates
have given their consent for the election. The proposed Board
members have informed the Company that in the event they are
elected, they intend to elect Tuomo Pätsi as chair of the
Board.
Information on the Board member
candidates proposed to be re-elected are available on the Company's
website at https://www.faron.com/faron/leadership/board-directors.
13.
Resolution on the remuneration of the auditor
The Board proposes, on the basis of
the proposal of the audit committee, that the auditor be
remunerated in accordance with the invoice approved.
14.
Election of the auditor
The Board proposes, on the basis of
the proposal of the audit committee, that PricewaterhouseCoopers Oy
("PwC"), a firm of authorised
public accountants, be re-elected as the Company's
auditor.
PwC has informed the Company that it
will appoint Panu Vänskä, authorised public accountant (KHT), as
the key audit partner.
15.
Resolution on the establishment of Shareholder's Nomination
Board
The Board proposes that a
Shareholders' Nomination Board be established for the Company and
its Charter is adopted.
According to the proposal, the main
duty of the Shareholders' Nomination Board would be to prepare the
proposals on the number, composition and remuneration of the
members of the Board to the Annual General Meeting and, if needed,
to the Extraordinary General Meeting. In accordance with the
proposal, the Shareholders' Nomination Board is established until
further notice until otherwise decided by the General Meeting of
shareholders.
The Shareholders' Nomination Board
would consist of three (3) members, including the chair of the
Nomination Board, and the chair of the Company's Board as an expert
without being an official member. The members of the Shareholders'
Nomination Board would be elected by a meeting of the Company's
five (5) largest shareholders who, on 31 August preceding the next
Annual General Meeting, hold the largest number of votes calculated
of all shares in the Company (as further provided in the proposed
Charter). The term of office of the members of the Shareholders'
Nomination Board would expire annually upon the appointment of the
subsequent Shareholders' Nomination Board (to be appointed after
the next Annual General Meeting following the appointment or
otherwise in accordance with proposed Charter).
The election process, as well as the
composition, tasks and activities of the Shareholders' Nomination
Board are defined in more detail in its Charter. The proposal for
the Charter is available on the Company's website at
https://www.faron.com/investors/general-meetings.
16.
Authorising the Board to decide on the issuance of shares, option
rights or other special rights entitling to
shares
The Board proposes that the AGM
authorise the Board to resolve by one or more decisions on
issuances of shares, option rights or other special rights
entitling to shares as referred to in Chapter 10, Section 1 of the
Finnish Limited Liability Companies Act, which authorisation
contains the right to issue new shares or dispose of the Company's
treasury shares held by the Company. The authorisation would
consist of up to twenty million (20,000,000) new shares in the
aggregate (including shares to be received based on option rights
or other special rights), which corresponds to approximately twenty
nine (29) per cent of the existing shares and votes in the Company
(as of the date of this notice), as well as the conveyance of up to
the same maximum number (twenty million (20,000,000)) of treasury
shares held by the Company.
In practise, the above authorisation
includes that the Board may first resolve on one or more share
issues (up to the maximum number of twenty million (20,000,000) new
shares) without consideration to the Company itself and then
further convey such treasury shares (up to the maximum number of
twenty million (20,000,000) shares) against
consideration.
The authorisation would not exclude
the Board's right to decide on the issuance of shares, option
rights or other special rights entitling to shares in deviation
from the shareholders' pre-emptive rights.
The authorisation is proposed to be
used for material arrangements from the Company's point of view,
such as financing (including, without limitation, issuance of
warrants under the funding agreement with IPF Partners announced on
28 February 2022) or implementing business arrangements,
investments or for other such purposes determined by the Board in
which case a weighty financial reason for issuing shares, option
rights or other special rights entitling to shares, and possibly
deviating from the shareholders' pre-emptive rights, would
exist.
For the sake of clarity, it is noted
that in no circumstances can the total number of new shares to be
registered under this authorisation exceed twenty million
(20,000,000) new shares in aggregate.
The Board would be authorised to
resolve on all other terms and conditions of the issuance of
shares, option rights or other special rights entitling to
shares.
The authorisation would be effective
until 30 June 2025. This authorisation does not cancel the
authorisation given to the Board by the Annual General Meeting on
24 March 2023 to resolve on issuances of shares, option rights or
other special rights entitling to shares.
17.
Authorising the Board to resolve on the issuance of
shares
Background to the
proposal
The Company previously announced on
4 March 2024 that it is continuing active endeavours and is in
discussions to secure its short and longer-term financing needs. In
connection hereto, it was announced that the Board of the Company
intends to propose to the AGM an authorisation for a larger share
issue to cover the Company's financing needs for the year 2024,
contemplated to be launched as a public offering (with, in the
event of an over-subscription, planned allocation preferences to
existing shareholders and bridge finance lenders, and in compliance
with the relevant securities markets regulation) (the "Offering")
as soon as practicable once the required preparations and approvals
are in place. Subject to the AGM approving the authorisation for
the contemplated Offering, the required approvals being obtained
and observing the market conditions, the subscription period is
currently expected to commence and end during the first half of
2024.
The authorisation is proposed to be
used, inter alia to repay short-term financing obligations of the
Company, to strengthen the balance sheet as well as the capital
structure of the Company and to continue financing the Company's
operations for the year 2024. If further authorisations, in
addition to those proposed by the Board to the AGM, would be
required, these would be separately proposed to and handled at an
Extraordinary General Meeting.
The authorisation is sought for a
contemplated directed share issue and otherwise with broad
discretion for the Board to allow flexibility for the Company to
arrange the contemplated Offering also in a manner involving the
Company's shareholders, in a timely manner and at the most
beneficial terms available, as well as to facilitate the Company's
bridge financing requirements. Due to the Company's AIM listing,
arranging a rights issue post-Brexit would involve separate
regulatory approval processes in Finland and the UK which would be
challenging, time consuming and expensive. Hence, as currently
contemplated, the most likely structure for the contemplated
Offering would include (i) a public offering of shares in Finland
with private placements in the EEA, and (ii) a separate UK "open
offer" of shares (or depositary interests) to current UK
shareholders (or holders of depositary interests) always capped at
a total consideration of less than EUR 8 million. A limited number
of other non-EEA investors could also be included in the Finnish
public offering subject to and under applicable rules and
exemptions, all as and subject to the final terms of the
contemplated Offering. Further, the Finnish public offering could
be structured in a way, where the subscription price (or price
range) and a maximum number of shares would be determined before
the launch of the contemplated Offering by the Board. Shareholders
would not be granted subscription rights, but they could make
subscriptions in accordance with the terms and conditions of the
contemplated Offering, when available. The Finnish public offering
could include separate retail and institutional tranches, with
allocation preferences to existing shareholders and bridge
financing lenders in the event of an over-subscription, to be
determined in more detail, along with the other terms and
conditions. The UK open offer would be made to UK-resident holders
of shares or depositary interests and could include an "excess
application facility" allowing UK holders to apply for more than
their pro rata allocation in the UK open offer, although the total
consideration under the UK open offer would always be capped below
EUR 8 million.
Authorisation for a directed
share issue
The Board proposes that the AGM
authorise the Board to resolve on a directed share issue by one or
several decisions as follows:
The shares to be issued under the
authorisation are new shares or treasury shares held by the
Company. The authorisation would consist of up to of thirty million
(30,000,000) new shares in the aggregate, which corresponds to
approximately 43.6 per cent of the existing shares and votes in the
Company (as of the date of this
notice), as well as the conveyance of up to
the same maximum number of thirty million (30,000,000) of treasury
shares held by the Company.
The Board is authorised to decide on
the issuance of shares in deviation from the shareholders'
pre-emptive rights and to issue shares without consideration to the
Company itself or otherwise, as well as to further convey treasury
shares held by the Company.
The Board is authorised to resolve
on all other terms and conditions of the issuance of shares. A
directed share issue always requires a weighty financial reason for
the Company and a directed share issue without consideration
requires an especially weighty financial reason for the Company,
also taking into account the interests of all the Company's
shareholders.
The authorisation is effective until
the close of the next Annual General Meeting of Shareholders to be
held in 2025 and can only be used for the purposes of the
contemplated public offering and the Company's existing bridge
financing needs.
In practise, the above authorisation
includes that the Board may first resolve on one or more share
issues (up to the maximum number of thirty million (30,000,000) new
shares) without consideration to the Company itself and then
further convey such treasury shares (up to the maximum number
thirty million (30,000,000) shares). For the sake of clarity, it is
noted that in no circumstances can the total number of new shares
to be registered under this authorisation exceed thirty million
(30,000,000) new shares in aggregate.
The authorisation does not cancel
the remaining authorisation given to the Board by the Annual
General Meeting on 24 March 2023 to resolve on issuances of shares,
option rights or other special rights entitling to shares, nor the
authorisation proposed to the AGM in agenda item 16, if said
authorisation is approved by the AGM.
18.
Closing of the meeting
B. DOCUMENTS OF THE ANNUAL GENERAL
MEETING
The above-mentioned resolution
proposals to the AGM, the Company's Annual Report 2023 including
the financial statements, the report of the Board of Directors and
the auditor's report and this notice are available on the Company's
website at https://www.faron.com/investors
as of the date of publication of this notice. The
Board's proposals and the other above-mentioned documents will also
be available at the AGM. Copies of these documents and of this
notice will be sent to shareholders upon request. The minutes of
the AGM will be available on the Company's website as of 19 April
2024 at the latest.
C. INSTRUCTIONS FOR THE PARTICIPANTS OF THE ANNUAL
GENERAL MEETING
1. The right to participate and
registration
Each shareholder who on the record
date of the AGM, being 22 March 2024 is registered in the Company's
shareholders' register held by Euroclear Finland Oy has the right
to participate in the AGM. A shareholder whose shares are
registered on their personal Finnish book-entry account is
registered in the Company's shareholders' register. If you do not
have a Finnish book-entry account, see section C.3 "Holder of nominee-registered shares
(including depositary interest holders)".
A shareholder who is registered in
the Company's shareholders' register and who wants to participate
in the AGM should register for the meeting by no later than 10:00
a.m. EEST (Finnish time) on Tuesday, 2 April 2024 by giving a prior
notice of participation. The notice must be received before the end
of the registration period. Notice of participation can be
given:
• by email
to general.meeting@faron.com
or
•
by mail to Faron Pharmaceuticals Ltd, attn.
Kaisa Kyttä, Joukahaisenkatu 6, FI-20520 Turku,
Finland.
When registering, a shareholder
shall state their name, personal identification number / business
identity code, address, telephone number and the name of a possible
proxy representative, legal representative or assistant and the
personal identification number of the proxy representative or legal
representative. The personal data given by shareholders to the
Company are used only in connection with the AGM and the necessary
processing of related registrations.
Shareholders, and their authorised
representatives or proxy representatives should be able to prove
their identity and/or right of representation at the meeting venue
upon request.
2. Proxy representative and powers of
attorney
Shareholders may participate in the
AGM and exercise their rights at the meeting by way of proxy
representation. A proxy representative must present a dated power
of attorney or other reliable proof of their authority to represent
the shareholder.
If a shareholder participates in the
AGM by means of several proxy representatives, who represent the
shareholder with shares held in different book-entry accounts, the
shares represented by each proxy representative shall be identified
when registering for the AGM.
The Company offers the possibility
for shareholders to designate Yrjö Wichmann, VP, Financing &
IR, as their proxy representative, to represent them at the AGM in
accordance with shareholder's voting instructions. Authorizing the
designated proxy representative will not accrue any costs for the
shareholder, excluding possible postal fees for proxy
documents.
Possible proxy documents should be
sent by email to general.meeting@faron.com
and in originals to Faron Pharmaceuticals Ltd,
attn. Kaisa Kyttä, Joukahaisenkatu 6, FI-20520 Turku, Finland
before the end of registration period by which time the proxy
documents must be received.
In addition to providing proxy
documents, the shareholder or their proxy representative must take
care of registering for the AGM in the manner described in this
notice.
3. Holder of nominee-registered shares (including
depositary interest holders)
A holder of nominee-registered
shares (including depositary interest holders) has the right to
participate in the AGM by virtue of such shares based on which the
holder would be entitled to be registered in the Company's
shareholders' register held by Euroclear Finland Oy on the AGM's
record date of 22 March 2024.
Additionally, participation requires
that the holder of nominee-registered shares is on the basis of
such shares temporarily registered in the Company's shareholders'
register held by Euroclear Finland Oy by 10:00 a.m. EEST (Finnish
time) on Tuesday, 2 April 2024. As regards nominee-registered
shares, this constitutes due registration for the AGM.
A holder of nominee-registered
shares is advised to request the necessary instructions regarding
temporary registration in the shareholders' register, issuing of
proxy documents and registration for the AGM from their custodian
bank without delay. A holder of nominee-registered shares shall
note that custodian banks may apply deadlines for the registration
and the providing of voting instructions of holders of
nominee-registered shares. The account management organisation of
the custodian bank must register a holder of nominee-registered
shares who wants to participate in the AGM to be temporarily
entered into the Company's shareholders' register by the
above-mentioned time.
4. Other instructions and
information
Pursuant to Chapter 5, Section 25 of
the Finnish Limited Liability Companies Act, shareholders who are
present at the AGM are entitled to request information regarding
the matters on the agenda of the AGM.
Changes in shareholding occurred
after the record date of the AGM do not affect the right to
participate in the AGM or the number of votes held by a
shareholder.
On the date of this notice, 13 March
2024, the total number of shares and votes in the Company is
68,807,199.
The AGM shall be held in Finnish,
partially translated into English.
Turku, 13 March 2024
FARON PHARMACEUTICALS LTD
Board of Directors
For
more information please contact:
Investor Contact
LifeSci Advisors
Daniel Ferry
Managing Director
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@consilium-comms.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.