Firefly Neuroscience Closes on Financing of up to $12.4 Million

Rhea-AI Summary

Firefly Neuroscience (NASDAQ: AIFF) has secured financing of up to $12.4 million, comprising $2.4 million in senior secured convertible notes at $3.00 per share and a $10 million equity line of credit. The AI company, which develops solutions for neurological and mental disorders, will use the proceeds to support growth initiatives and commercialize its FDA-510(k) cleared Brain Network Analytics (BNA™) technology. The funding will accelerate two strategic commercialization pathways: partnering with neuroscience pharmaceutical companies and supporting US neurologists and psychiatrists in patient care optimization.

Positive

• Secured up to $12.4 million in new financing
• Immediate access to $2.4 million through convertible notes
• Additional $10 million available through equity line of credit
• Strengthened balance sheet for commercialization efforts
• FDA-510(k) clearance already obtained for BNA™ technology

Negative

• Potential dilution for shareholders through convertible notes and ELOC
• Convertible notes are senior secured, increasing debt obligations

Insights

Financial Analyst

The $12.4 million financing package represents a significant capital injection for Firefly Neuroscience, structured as $2.4 million in convertible notes at $3.00 per share and a $10 million equity line of credit. For a microcap company with a market cap of $22.9 million, this financing roughly equals 54% of their current market value. The convertible note pricing at $3.00 suggests confidence in share price appreciation potential. The ELOC structure provides flexibility in capital deployment while minimizing immediate dilution. The dual commercialization strategy targeting both pharmaceutical partnerships and direct-to-practitioner sales could create multiple revenue streams for their FDA-cleared BNA technology. However, investors should note that ELOCs typically come with variable pricing mechanisms that could pressure share prices during drawdowns.

Medical Technology Analyst

The BNA (Brain Network Analytics) technology represents a promising advancement in neurological diagnostics, particularly valuable in an era where mental health and neurological disorders are receiving increased attention. The FDA 510(k) clearance validates the technology's safety and effectiveness, while positioning Firefly strategically in the growing brain health market. The dual commercialization approach is particularly shrewd - partnering with pharmaceutical companies could lead to integration of BNA in clinical trials and drug development, while direct distribution to neurologists and psychiatrists could establish the technology as a standard diagnostic tool. This financing provides important capital for market penetration in a sector where adoption rates typically depend on extensive clinical validation and marketing efforts.

TORONTO, Dec. 31, 2024 (GLOBE NEWSWIRE) -- Firefly Neuroscience, Inc. (“Firefly,” “we,” or the “Company”) (NASDAQ: AIFF), an Artificial Intelligence (“AI”) company developing innovative solutions that improve brain health outcomes for patients with neurological and mental disorders, today announced the closing of up to $12.4 million consisting of $2.4 million up front in the form of senior secured convertible notes at $3.00 per share, subject to adjustment, and an equity line of credit (the “ELOC”) for up to $10 million. The proceeds from these financings will be used for growth, commercialization of its FDA-510(k) cleared Brain Network Analytics (BNA™) technology, and general working capital purposes.

"The closing of this financing strengthens our balance sheet and provides us the financial flexibility to continue to execute on our growth strategy,” said Greg Lipschitz, Executive Chairman of Firefly. “The additional working capital will allow us to accelerate two strategic commercialization pathways for our BNA technology. Through partnering with neuroscience pharmaceutical companies and by supporting US neurologists and psychiatrists in the diagnosis and optimization of patient care, we are driven to improve outcomes for people suffering from brain health illnesses.”

About Firefly
Firefly (NASDAQ: AIFF) is an Artificial Intelligence (“AI”) company developing innovative solutions that improve brain health outcomes for patients with neurological and mental disorders. Firefly’s FDA-510(k) cleared Brain Network Analytics (BNA™) technology revolutionizes diagnostic and treatment monitoring methods for conditions such as depression, dementia, anxiety disorders, concussions, and ADHD. Over the past 15 years, Firefly has built a comprehensive database of brain wave tests, securing patent protection, and achieving FDA clearance. The Company is now launching BNA™ commercially, targeting pharmaceutical companies engaged in drug research and clinical trials, as well as medical practitioners for clinical use.

Brain Network Analytics was developed using artificial intelligence and machine learning on Firefly’s extensive proprietary database of standardized, high-definition longitudinal electroencephalograms (EEGs) of over 17,000 patients representing twelve disorders, as well as clinically normal patients. BNA™, in conjunction with an FDA-cleared EEG system, can provide clinicians with comprehensive insights into brain function. These insights can enhance a clinician’s ability to accurately diagnose mental and cognitive disorders and to evaluate what therapy and/or drug is best suited to optimize a patient’s outcome.

Please visit https://fireflyneuro.com/ for more information.

Forward-Looking Statements
Certain statements in this press release and the information incorporated herein by reference may constitute “forward-looking statements” for purposes of the federal securities laws concerning Firefly. These forward-looking statements include express or implied statements relating to Firefly’s management teams’ expectations, hopes, beliefs, intentions, or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effects. There can be no assurance that future developments affecting Firefly will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond Firefly’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: risks related to development and commercialization of BNA^TM technology; risks related to Firefly’s ability to recognize the anticipated benefits of the merger (the “Merger”) with WaveDancer, Inc. (“WaveDancer”); risks related to Firefly’s ability to correctly estimate its operating expenses and unanticipated spending and costs that could reduce Firefly’s cash resources; the ability of Firefly to protect its intellectual property rights; competitive responses to the Merger; unexpected costs, charges or expenses resulting from the Merger; potential adverse reactions or changes to business relationships resulting from the completion of the Merger; legislative, regulatory, political and economic developments; and those factors described under the heading “Risk Factors” in the in the registration statement on Form S-4 filed by WaveDancer with the Securities and Exchange Commission on January 22, 2024, as amended, and declared effective on February 6, 2024. Should one or more of these risks or uncertainties materialize, or should any of Firefly’s assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. It is not possible to predict or identify all such risks. Forward-looking statements included in this press release only speak as of the date they are made, and Firefly does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Investor Contact
KCSA Strategic Communications
Valter Pinto or Jack Perkins
(212) 896-1254
Firefly@KCSA.com

Media Contact
KCSA Strategic Communications
Raquel Cona, Vice President
(516) 779-2630
Rcona@KCSA.com

FAQ

How much financing did Firefly Neuroscience (AIFF) secure in December 2023?

Firefly Neuroscience secured financing of up to $12.4 million, consisting of $2.4 million in senior secured convertible notes and a $10 million equity line of credit.

What is the conversion price for AIFF's new convertible notes?

The senior secured convertible notes are convertible at $3.00 per share, subject to adjustment.

How will Firefly Neuroscience (AIFF) use the new financing proceeds?

The proceeds will be used for growth, commercialization of its FDA-510(k) cleared Brain Network Analytics (BNA™) technology, and general working capital purposes.

What are the two strategic commercialization pathways for AIFF's BNA technology?

The two pathways are partnering with neuroscience pharmaceutical companies and supporting US neurologists and psychiatrists in the diagnosis and optimization of patient care.