Okay, we're now two minutes past three, so propose we initiate the webcast. Thank you to everyone who has dialed in. I will do this presentation in English, as I can see that we have some participants with international names. I have a few slides I will be presenting. We are happy to take questions. You can pose your questions in the Q&A section, which is available at the top of your meeting screen. Alternatively, you can submit by email to Lubor or myself, and we will try to also check for questions there. If you ask your question in Norwegian, we will respond to them in Norwegian. So, as you have seen, this morning we announced a financing solution for the company.
This will be presented to the annual general meeting for approval on the 19th of June. The AGM notice will be issued later today with all the details. This comes following a prior announcement in April, where we announced to the market that we were working on a financing process, and what we're announcing today is the details around this. To give you a color of the situation you are in, it's no secret that the company has been low on capital. The existing cash in the company lasts until the 25th of June, so it's essential to find a financing solution in the very short term.
We've reduced our burn rate significantly over the past 12-18 months, from a rate of over NOK 10 million per month, down to NOK 5 million per month, and this has now been reduced to 4.5. So just to be clear to everyone, we're running a tight ship. We've cut the slack that we can, and we are very mindful of our spend. As I'm sure everyone is aware, we also have a convertible bond facility with Atlas Capital Markets, who has been financing the company's operations since March of last year. And at the current time point, Atlas holds 80 convertible bonds at NOK 500,000 each, which is a total of NOK 40 million in outstanding convertible bonds. So that's where the company finds itself.
The aim of this financing process has been to secure capital for the company for the next 12 months, to put us in position to reach important preclinical data milestones that will enable us to enter the first business development deal or VC financing within the runway. In addition, as we've always said, the Atlas fund financing has been a temporary solution in the difficult circumstances, and it's not something we intend to rely on permanently, and we wish to be able to exit this facility and eventually close it down, so that we don't rely on this type of financing in the future. Having said that, this facility has been essential to get the company to where it is now, and to do this turnaround and get our circular RNA program in shape.
The solution we are proposing is a preferential rights issue of up to NOK 52 million. The number NOK 52 million is there because this is the number required to fund the company for 12 months. That's the number required in gross proceeds that would provide us a runway until the end of June 2025. The plan is to further reduce our burn to NOK 4 million per month. And in parallel with the rights issue, Atlas has entered into a binding commitment to provide the company with the necessary capital to secure operations until end of June 2025. I will come back to exactly how this works, but with the financing solution we're providing today, importantly, the company now has funding secured for the next 12 months. These are the main terms of the proposed rights issue.
The subscription price has been set at NOK 2.5. When you subscribe in the rights issue, you will be allocated one warrant for each share that is subscribed, so it's a one-to-one warrant coverage. These warrants will have an exercise period in December of this year, so six months from now, and they will be exercisable at a 30% discount to the VWAP. With a floor at NOK 0.6, so they can never go under NOK 0.6, which is the nominal value of the share. These warrants will be listed, and they will be tradable. The warrants also importantly provide us with a subsequent tranche that can enable further capital infusion into the company in December.
So with the rights issue comes with funding now and then the potential of additional warrant funding to come in, in the, towards the end of the year. Moreover, we have certain existing shareholders that have also binding pre-commitments to participate in the rights issue at a certain level. These pre-committed funds have been compensated with a 17% fee to be paid in units, one—so not in cash, but in units. One unit would equals one share and one warrant. So, that's the, that's the compensation that has been offered to incentivize pre-subscriptions in the deal. As a normal rights issue, there will be a subscription period following approval of the transaction by the AGM.
Everyone who holds shares at that point or at the record date will be provided with subscription rights or tegningsrett, in Norwegian, that provides a right to subscribe for shares in the issue. These subscription rights will be provided in a five-to-two ratio, so this means two existing shares gives a right to subscribe for 5 new shares in the transaction. These subscription rights will also be listed and tradable during the subscription period. So these are the main terms of the deal. And here, I present to you the overall structure, so I'll explain this sort of bottom up as best I can, so it's clear to everyone. We have pre-commitments of around NOK 9.15 million in the deal.
These come from board and management at around NOK 1.8 million and around NOK 7.4 million from existing and a couple of new shareholders. Notably here, a couple of shareholders that are in the of the more major shareholders in the company are listed, but there are also more. But the transaction is supported and pre-subscribed by several of our main shareholders. As I said, we're aiming to raise NOK 52 million in total. This is the amount that's required to provide the company with a 12-month runway. So at the bottom of the deal, we have the NOK 9 million pre-commitments, so these are firm and guaranteed. On top of that NOK 9 million, Atlas has committed to give us access to NOK 10 million under the convertible facility.
So this means that the minimum amount or the minimum capital to be made available to the company following the rights issue is NOK 19 million, or 19.15, to be precise. During the subscription period, we will take subscriptions of up to NOK 43 million, so that's counting from the nine up to 52. These subscriptions will be offset against the Atlas commitment. That means if we get NOK 10 million in subscriptions during the subscription period, we will not draw funds from Atlas at that point. And then anything over that comes in addition. We've structured it this way so that you as shareholders are you now have full clarity. The company will be financed for 12 months.
You know the minimum amount that will come in will be NOK 19 million, and the more that, the more funds that are subscribed, the less will be drawn on Atlas, i.e., also the less convertible bonds will be issued, which we believe should be an advantage for everyone. I'll now switch to explain the structure with Atlas and all the components that they have committed to in this transaction. So to begin with, what happens now first during the transaction is, as I mentioned before, the company has capital available until the end of June. This rights issue process, we expect to be completed during the first half of July, so we need to cover a cash shortfall.
Atlas is providing us a reduced tranche size of NOK 4 million that we will be drawing on in the immediate future. We will draw NOK 4 million simply to access sufficient liquidity to have a buffer to complete the transaction. That's the reason for this. Those funds will be drawn according to the existing investment agreements. On top of that comes the NOK 10 million commitment in the rights issue. Again, these are purely provided under the existing terms. They will be offset against subscriptions, and there is only a fee on what we actually draw, so we don't pay any additional fee on these 10, NOK 10 million. They, they are available, and if we don't utilize that, those funds, there also will be no fee payable on those funds.
On top of that, Atlas has committed to convert 15 million NOK worth of bonds. That would be 30 bonds at 500,000 kroner value. These will be converted as part of the transaction at the subscription price of 2.5 kroner. These will be eligible also for warrants. Now, I think this is very important, and the important thing to understand here, this means we will reduce the exposure to the convertible bonds. At the moment, there are 80 outstanding bonds with a value of NOK 40 million . This will be reduced to 25. So following the deal, this will be converted. There will be fewer bonds, existing, and convertible in the future.
We think this is a very important factor here to demonstrate that we have a plan to get eventually free of this facility. In the future, and I mentioned this financing commitment, and I'll explain here how it works. Atlas is guaranteed to fund the company's operations at the NOK 4 million burn rate per month until the end of June 2025. These funds will be made available on a need-to basis, and it's up to Circio when to draw on it. We will do everything we can to avoid drawing on these funds, but they will be available if necessary.
However, if the deal size is sufficient, either to provide a runway until all the way until December, if we get the full subscription up to NOK 52 million, then they certainly won't be needed. If we have a six-month cash coverage from the deal, well, then the warrants will strike in December, and they may provide the additional future funding. Also, we are looking for other sources of capital, and if these are materialized, then the funding from Atlas will not be utilized. However, it will be available in the binding agreement, so we do have clarity and a line of sight on the 12-months financing of the company. What we have committed in return is, as I said, we committed to Atlas, that we will only use this facility and refinancing commitment if it's essential.
I also will view this as a commitment to you as shareholders. If we utilize this commitment, we have agreed to provide a collateral and the TG01 asset to Atlas in exchange for future issued bonds. This was a crucial component to enable this kind of firm structure from Atlas. And finally, we have agreed, and again, I think this is showing commitment both to shareholders as well as Atlas, that if we execute the business development transaction during the next 12 months, which is our aim, 50% of any upfront payment will be dedicated towards bond buybacks.
According to the agreement with Atlas, the company can buy back convertible bonds at 110%, 110% of par, and we intend to do that with half of the proceeds, at least from a business development deal. So a deal can here enable us to fully close the facility and eliminate the exposure to the convertible facility. Timeline. We announced the transaction today, 29th of May. The transaction will need to be approved by the company's general meeting. We plan to do this in the annual general meeting, which now will be held on the 19th of June at 10 A.M. digitally as well as in our office.
We will hear, approve the transaction, associated terms, and also housekeeping items that are normally presented in the AGM for approval. Then, following the approval, and or if there is an approval by the AGM, the record date will be set the 21st of June. So this is the date at which it will, whoever holds shares at that point, gets subscription rights in the subscription period. The subscription period will be from 24th of June to 8th of July, two weeks, so then everyone has the opportunity to subscribe in the deal, both if you have subscription rights, you're guaranteed allocation. If you don't, you can still subscribe, but then allocation depends on demand. The publication of the outcome will occur on the 9th of July, and settlement is expected 11th of July. This is an approximate timeline.
It may deviate by one or two days, but more or less, this is the timeline we are expecting to complete the transaction. So that's the formal part of the presentation we had prepared. We will now take questions, if there are any. And I think, Lubor, you received a couple of questions, so we can maybe start with those.
Yes. We received a couple of questions regarding Atlas' participation in this financing. The first question relates to the Atlas commitment. Could you elaborate more? What are the terms of this Atlas commitment in the financing?
The commitment by Atlas. All occurs under the existing facility and existing agreement framework, so will be done on the same terms. The financing commitment of 12 months is binding, so that it is definitive. There will be capital available for the next 12 months. There are certain conditions precedent that we need to meet in order to draw on the facility, but we have agreed with Atlas, in case we are in breach, there is a pre-agreed waiver of those conditions in exchange for an 8% extra fee. So there is no situation where, because of being in breach on certain conditions, we will not be able to access the capital. So these funds will be available.
And as I said before, and I stress again, we aim to utilize this very carefully, or ideally, not at all. So the more demand or the more subscriptions we get in the transaction, the less reliance we will have on the financing commitment. But as far as I view it, this is important. It creates this clarity for you as investors and shareholders that the company will be funded. That is out, that risk is taken out. Now, if there is a desire that we don't utilize the facility, now is everyone's chance to subscribe, and then the company will have the capital required outside of that facility....
We hope that this creates an incentive to participate, and we aim to increase that incentive by having the warrants, which will allow an opportunity to subscribe for further shares in the future and can provide an additional capital infusion into the company.
This brings me to the next question that was raised. I mean, assuming the capital raise is very successful or is fully subscribed, what will happen to this investment agreement or the relationship you have with Atlas?
The investment agreement itself will continue to exist. If the rights issue is fully subscribed, that means the company will have the necessary capital for a 12-month runway. It then will automatically mean that it will not be necessary to draw any further tranches from Atlas. The conversion of these NOK 15 million that I mentioned before will happen in any case, so the reduction in the exposure will still be from 40 down to 25 million. And we don't intend to draw at all on the facility if the issue is fully subscribed.
Another question was: Do you expect Atlas to do more conversion?
So Atlas would be at liberty to convert bonds now after the launch. I think this will be at Atlas's discretion. I think that would be a good thing if that is done at this point, to show that we can further reduce the exposure and get an even lower outstanding amount of bonds at the transaction. But as soon as there is a conversion agreed, it will be communicated to the markets.
And there's another question on the conversion that you mentioned earlier, the NOK 15 million conversion. On what terms can Atlas convert those NOK 15 million, and what is the advantage to shareholders of this conversion in connection with the rights issue?
Those NOK 15 million will be converted at the same price as everyone else, so it'll be at NOK 2.5 . There will be no pricing mechanism or no discount, so they will be issued together with the rights issue on the same date at the exact same price. So it means Atlas is in the same boat as everyone else for those NOK 15 million . And for that, they also then receive the 1-to-1 warrants. Now, these warrants will have the same function as for everyone else, and if Atlas wishes to utilize the warrants, they would need to put money into the company under the warrants and receive shares in the future, not convertible notes.
They would then be an investor like everyone else if the warrants are in the money in December.
Yeah, I think this concludes the, the question that were received.
I may touch on a couple of other items that I've received several questions on in the past. One relates to the call option that Atlas has. So according to the second tranche we drew, Atlas received an option to call on NOK 30 million at their discretion, and I think there's been some concern around this. I just want to stress that that option is structured in a way that it is only valuable in a situation where the share price is increasing. Again, we want to have everyone in the same boat. So if that option becomes valuable and it will actually be exercised, it would mean, again, Atlas will put money into the company. They'll have to...
They have to call on the NOK 30 million, actually pay NOK 30 million, so that means funding for the company, and it would only be done if things have gone well. So the way I view it, if that call option becomes in play and is exercised, then it means we've been successful, and then it will mean we actually got additional capital into the company. So our view is that that is a win-win scenario, and it's only valuable in an upside scenario for everyone. And again, it's been structured, so it incentivizes everyone for the company to be successful. Do we do we have any further questions, Lubor?
No, no, there are no questions in the Q&As. No other question were submitted that I can see.
So, then I think we can conclude this webcast. Thank you all for dialing in. Thank you for your support. I'm available by phone or email if you have questions. Same with Lubor, so please get in touch. We understand there may be many questions. We believe and we hope that you also consider this to be a very strong solution for the company. I have to be honest, it's been a complicated task to put this all together. It's in a complicated situation we have been, and I believe this is a very good solution, given the circumstances. I'd also like to add at the end that we are really appreciative of the support that Atlas has shown.
They've funded the company through a very difficult period, through a turnaround. They've shown great flexibility in this transaction by allowing the commitment for a 12-months funding to give clarity to everyone, and I think this shows that this is an investor that has a long-term perspective, believes this, believes in the company, and believes in the technology, and are willing to support us going forward. And hopefully this comes through in this deal structure, and is visible to everyone, and incentivizes participation so that we have a successful rights issue, and then ideally get all the way to the NOK 52 million during the subscription period. So, with that, I thank you all for participating and we close the webcast.
Thanks, everybody, for attending. Thank you.