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

Faron Pharmaceuticals OyAnnouncement

Today 12:00

Faron Pharmaceuticals Ltd | Company announcement | April 13, 2026 at 14:00:00
EEST

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 3,572,851 special
rights entitling to 3,572,851 new Shares, for an aggregate subscription price
of EUR 1,613,499.51 in connection with the scheduled amortisation payment of
the First and Second Tranche Bonds (as defined below), settlement of which
will occur on 15 April 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 announced that it had resolved upon the issuance of a second
tranche of convertible bonds amounting to EUR 10 million (the “Second Tranche
Bonds”) due 2 December 2028, to HCM, convertible into new and/or existing
Shares in the Company. 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 and the Second Tranche Bonds.

The Company has received a scheduled amortised payment notice from the
bondholder for an aggregate amortised payment amount (including accrued
interest) of EUR 934,500 for First Tranche bonds and EUR 679,000 for Second
Tranche Bonds. Therefore, total aggregate amortised payment amount (including
accrued interest) is EUR 1,613,500. As the Company has exercised its Share
Settlement Option, the subscription price for the Shares subscribed for by the
bondholder is EUR 0.4516 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 (initially set 2 April 2026, but payment deferred by mutual
agreement between HCM and the Company), 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 3,572,851 Special Rights entitling to
3,572,851 new Shares in total, for an aggregate subscription price of EUR
1,613,499.51. Of those Shares 2,069,309 are used to amortize the First Tranche
Bonds (including accrued interest) and 1,503,542 to amortize the Second
Tranche Bonds (including accrued interest). 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 the Second Tranche Bonds and recorded into the reserve for invested
unrestricted equity.

Admission and Total Voting Rights
The 3,572,851 Shares subscribed for and issued are expected to be registered
in the Finnish Trade Register on or around 14 April 2026. The Shares will rank
pari passu in all respects with the existing shares of the Company once they
are registered with the Finnish Trade Register.

The Company will make applications for the admission of the newly issued
Shares 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“) with
said admissions expected to become effective and trading to commence on or
around 15 April 2026.

Following the issuance and registration of new Shares and offer shares as part
of the rights issue in accordance with the release published by the Company on
9 April 2026, the aggregate number of ordinary shares in the Company will be
203,045,511. Shares held in treasury by the Company do not confer a right to
dividends or other shareholder rights. Following the registration of the offer
shares of the rights issue and new Shares as well as completion of delivery of
all offer shares of the rights issue, the Company will have 3,530,573 shares
in treasury and therefore, the total number of voting rights in Faron will be
199,514,938 (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                | +358 50 553 9535 / +44 7 469 766 223 |
| (Media)                             | 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/)

Forward-Looking Statements

Certain statements in this announcement are, or may be deemed to be,
forward-looking statements. Forward looking statements are identified by their
use of terms and phrases such as ”believe”, ”could”, “should”, “expect”,
“hope”, “seek”, ”envisage”, ”estimate”, ”intend”, ”may”, ”plan”,
”potentially”, ”will” or the negative of those, variations or comparable
expressions, including references to assumptions. These forward-looking
statements are not based on historical facts but rather on the Directors’
current expectations and assumptions regarding the Company’s future growth,
results of operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof), competitive
advantages, business prospects and opportunities. Such forward-looking
statements reflect the Directors’ current beliefs and assumptions and are
based on information currently available to the Directors.

A number of factors could cause actual results to differ materially from the
results and expectations discussed in the forward-looking statements, many of
which are beyond the control of the Company. In addition, other factors which
could cause actual results to differ materially include the ability of the
Company to successfully license its programs within the anticipated timeframe
or at all, risks associated with vulnerability to general economic and
business conditions, competition, environmental and other regulatory changes,
actions by governmental authorities, the availability of capital markets or
other sources of funding, reliance on key personnel, uninsured and
underinsured losses and other factors. Although any forward-looking statements
contained in this announcement are based upon what the Directors believe to be
reasonable assumptions, the Company cannot assure investors that actual
results will be consistent with such forward-looking statements. Accordingly,
readers are cautioned not to place undue reliance on forward-looking
statements. Subject to any continuing obligations under applicable law or any
relevant AIM Rule requirements, in providing this information the Company does
not undertake any obligation to publicly update or revise any of the
forward-looking statements or to advise of any change in events, conditions or
circumstances on which any such statement is based