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

Faron Pharmaceuticals OyAnnouncement

03/12/2025 07:00

Faron Pharmaceuticals Ltd | Company announcement | December 03, 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 517,795 special rights
entitling to 517,795 new Shares, for an aggregate subscription price of EUR
965,998.35 in connection with the scheduled amortisation payment of the First
Tranche Bonds (as defined below), occurred on 2 December 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”). 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 received a scheduled amortised payment notice from the
bondholder for an aggregate amortised payment amount (including accrued
interest) of EUR 966,000. 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 517,795 Special Rights entitling to 517,795 new Shares, for an
aggregate subscription price of EUR 965,998.35. 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.

Admission and Total Voting Rights
The 517,795 Shares subscribed for and issued are expected to be registered in
the Finnish Trade Register on or around 3 December 2025. 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 5 December 2025 (the “Admissions”).

Following the issuance, the aggregate number of ordinary shares in the Company
is 118,563,143. Shares held in treasury by the Company do not confer a right
to dividends or other shareholder rights. Following the registration, 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 114,420,465 (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