Faron Pharmaceuticals: Faron Pharmaceuticals Ltd: Approval of Share Subscriptions Based on Special Rights in connection with Advanced Amortisation of the First Tranche Bonds

Faron Pharmaceuticals OyAnnouncement

Yesterday 17:45

Faron Pharmaceuticals Ltd | Company announcement | January 08, 2026 at
19:45:00 EET

Turku, Finland – Faron Pharmaceuticals Ltd. (AIM: FARN, First North: FARON), a
clinical-stage biopharmaceutical company developing novel immunotherapies,
announces that the Company has approved the exercise of 453,979 special rights
entitling to 453,979 existing treasury shares, for an aggregate subscription
price of EUR 846,943.22, in connection with an advanced amortisation payment
of the First Tranche Bonds (as defined below), which will occur latest on 12
January 2026.

The Company announced on 3 April 2025 that it had entered into a convertible
bond arrangement for up to EUR 35 million with an entity managed by Heights
Capital Management, Inc. (“HCM”) and resolved upon the issuance of amortising
senior unsecured convertible bonds with an aggregated principal amount of EUR
15 million (the “First Tranche Bonds”) due 2 April 2028 to HCM, convertible
into new and/or existing shares in the Company (the “Shares”). On 11 December
2025 the Company has resolved upon the issuance of EUR 10 million of Second
Tranche Bonds, due 2 December 2028, to HCM, convertible into new and/or
existing Shares in the Company. HCM (or any future holders of the majority of
the First Tranche Bonds) may, at any time between scheduled amortisations,
exercise their right to bring forward up to two (2) additional amortisation
payments (an “Accelerated Amortisation”) of the First Tranche Bonds to be paid
in advance, with a limit of no more than nine (9) Accelerated Amortisations in
the first year of the term of the First Tranche Bonds. As previously
announced, the Board of Directors of Faron has resolved to make amortisations
and interest payments by converting the relevant amounts due into Shares
(“Share Settlement Option”), unless it separately decides to make payments in
cash. The exercise of the Company’s Share Settlement Option is effected by the
bondholders exercising special rights entitling into Shares, as referred to in
Chapter 10 of the Finnish Companies Act (“Special Rights”), issued in
connection with the issuance of the First Tranche Bonds.

The Company has on 8 January 2026 received an amortised payment advancement
notice related to First Tranche Bonds from the bondholder for an aggregate
amortised payment amount (including accrued interest) of EUR 846,943.22. As
the Company has exercised its Share Settlement Option, the subscription price
for the Shares subscribed for by the bondholder is EUR 1.8656 per Share,
corresponding to 90 per cent of the lowest of (i) the volume weighted average
price (“VWAP”) of a Share on the relevant payment date, and (ii) the lowest of
the VWAPs of a Share on each of the five consecutive dealing days ending on
(and including) the dealing day immediately preceding the relevant payment
date. Therefore, the Company has approved the exercise of 453,979 Special
Rights entitling to 453,979 existing treasury Shares, for an aggregate
subscription of EUR 846,943.22. The subscription price for the Shares
subscribed for pursuant to the Special Rights is paid by setting off the
Company’s debt to pay relevant amounts due under the First Tranche Bonds and
recorded into the reserve for invested unrestricted equity. The new Maturity
Date of the Bond is 2 August 2027.

The 453,979 Shares subscribed for rank pari passu in all respects with the
existing shares of the Company and are admitted to trading on Nasdaq First
North Growth Market Finland (“First North“) maintained by Nasdaq Helsinki Ltd
(“Nasdaq Helsinki“) and on AIM (“AIM“), the market of that name operated by
London Stock Exchange plc (the “LSE“).

Following the issuance, the aggregate number of ordinary shares in issue in
the Company remains 118,563,143. Shares held in treasury by the Company do not
confer a right to dividends or other shareholder rights. Following the
issuance, the Company will have 3,688,699 shares in treasury and therefore,
the total number of voting rights in Faron will be 114,874,444 (the “Number of
Shares and Votes“). This figure may be used by shareholders as the denominator
for the calculations by which they will determine whether they are required to
notify an interest in, or a change to their interest in, the Number of Shares
and Votes of the Company.

For more information, please contact:

+-------------------------------------+--------------------------------------+
| IR Partners, Finland                |                                      |
| (Media)                             | +358 50 553 9535 / +44 7 469 766 223 |
|                                     | kare.laukkanen@irpartners.fi         |
| Kare Laukkanen                      |                                      |
+-------------------------------------+--------------------------------------+
| FINN Partners, US                   | +1 847 791-8085                      |
| (Media)                             | alyssa.paldo@finnpartners.com        |
| Alyssa Paldo                        |                                      |
+-------------------------------------+--------------------------------------+
| Cairn Financial Advisers LLP        | +44 (0) 207 213 0880                 |
| (Nominated Adviser and Broker)      |                                      |
| Sandy Jamieson, Jo Turner           |                                      |
+-------------------------------------+--------------------------------------+
| Sisu Partners Oy                    | +358 (0)40 555 4727                  |
| (Certified Adviser on Nasdaq First  | +358 (0)50 553 8990                  |
| North)                              |                                      |
| Juha Karttunen                      |                                      |
| Jukka Järvelä                       |                                      |
+-------------------------------------+--------------------------------------+

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 reprogramming 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. Further information is available
at www.faron.com. (http://www.faron.com/)