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 07:00

Faron Pharmaceuticals Ltd | Company announcement | October 28, 2025 at
09:00:00 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 451,803 special rights
entitling to 451,803 new Shares, for an aggregate subscription price of EUR
844,645.71, in connection with an advanced amortisation payment of the First
Tranche Bonds (as defined below), which will occur latest on 29 October 2025.

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”). 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”) 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 27 October 2025 received an amortised payment advancement
notice from the bondholder for an aggregate amortised payment amount
(including accrued interest) of EUR 844,647. As the Company has exercised its
Share Settlement Option, the subscription price for the Shares subscribed for
by the bondholder is EUR 1.8695 per Share, corresponding to the rate used in
the Scheduled Amortisation on 2 October 2025. Therefore, the Company has
approved the exercise of 451,803 Special Rights entitling to 451,803 new
Shares, for an aggregate subscription price of EUR 844,645.71. 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 October 2027.

Admission and Total Voting Rights
The 451,803 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 the Company
will be 118,045,348. Shares held in treasury by the Company do not confer a
right to dividends or other shareholder rights. Following the issuance, the
Company will continue to have 4,142,678 shares in treasury (issued by the
Company to itself previously on 27 May 2025) and therefore, the total number
of voting rights in Faron will be 113,902,670 (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/)