INSIDE INFORMATION: FARON INTENDS TO ISSUE SECOND TRANCHE OF BONDS WITH AN AGGREGATED PRINCIPAL AMOUNT OF EUR 10 MILLION UNDER ITS CONVERTIBLE BOND ARRANGEMENT

Faron Pharmaceuticals OyAnnouncement

24/11/2025 17:15

Faron Pharmaceuticals Ltd | Company announcement | November 24, 2025 at
19:15:00 EET

Inside Information: Faron intends to issue second tranche of bonds with an
aggregated principal amount of EUR 10 million under its convertible bond
arrangement

TURKU, FINLAND – Faron Pharmaceuticals Ltd. (AIM: FARN, First North: FARON,
“Faron” or the “Company”), a clinical-stage biopharmaceutical company
developing novel immunotherapies, announced on 3 April 2025 that the Company
has entered into a subscription agreement (the “Subscription Agreement”) with
an entity managed by Heights Capital Management, Inc. (“HCM”) regarding the
issuance and subscription of amortising senior unsecured convertible bonds
with an aggregated principal amount of EUR 15 million (the “First Tranche
Bonds”) with an option to issue, subject to certain conditions, two additional
tranches of convertible bonds (the “Second Tranche Bonds” and “Third Tranche
Bonds”, respectively) with an aggregated principal amount of EUR 10 million
each, convertible into new and/or existing shares in the Company (the
“Shares”).

As previously announced on 3 April 2025, the Company may, in its sole
discretion, during a twelve-month period following the announcement of the
Phase II topline readout in the BEXMAB r/r MDS study, which subsequently took
place on 15 April 2025, request that HCM subscribes for the Second Tranche
Bonds.

The Board of Directors of Faron (the “Board”) has today resolved that the
Company intends to issue the Second Tranche Bonds. The Company has also today,
in accordance with the Subscription Agreement, delivered a request notice
concerning the Second Tranche Bonds to HCM as the initial subscriber,
requesting subscription by HCM of the Second Tranche Bonds in an aggregated
principal amount of EUR 10 million.

“Drawing down the second tranche of the HCM convertible bond would give the
Company the required flexibility to run its operations while conducting the
needed business activities ahead of the registrational study in HR MDS. This
is the exact situation for which this bond structure was designed for, and we
are very pleased with HCM’s continued support.”, said Dr. Juho Jalkanen, CEO
of Faron Pharmaceuticals.

The issuance and subscription of the Second Tranche Bonds is still subject to
certain conditions precedent, as previously announced on 3 April 2025,
including that no material adverse change has occurred and that there has been
no adverse change in the international financial markets. HCM may, at its
discretion, waive any of the conditions precedent in respect of the Second
Tranche Bonds.

Provided that such conditions precedent have been satisfied or, as applicable,
waived by HCM, the Board intends to separately resolve on the issuance of the
Second Tranche Bonds to HCM. Such resolution would also include the issuance
to HCM of special rights entitling them to shares that would be attached to
the Second Tranche Bonds and would be convertible into new and/or existing
Shares in the Company. 

As previously announced on 3 April 2025, the Second Tranche Bonds are intended
to be issued on substantially same terms as the First Tranche Bonds. The
initial conversion price of the Second Tranche Bonds will be determined on the
date of issuance of the Second Tranche Bonds.

For more information, please contact:

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

About BEXMAB
The BEXMAB study is an open-label Phase I/II clinical trial
investigating bexmarilimab in combination with standard of care (SoC) in the
aggressive hematological malignancies of acute myeloid leukemia (AML) and
myelodysplastic syndrome (MDS). The primary objective is to determine the
safety and tolerability of bexmarilimab in combination with SoC (azacitidine)
treatment. Directly targeting Clever-1 could limit the replication capacity of
cancer cells, increase antigen presentation, ignite an immune response, and
allow current treatments to be more effective. Clever-1 is highly expressed in
both AML and MDS and associated with therapy resistance, limited T cell
activation and poor outcomes.

About bexmarilimab
Bexmarilimab is Faron’s wholly owned, investigational immunotherapy designed
to overcome resistance to existing treatments and optimize clinical outcomes,
by targeting myeloid cell function and igniting the immune
system. Bexmarilimab binds to Clever-1, an immunosuppressive receptor found on
macrophages leading to tumor growth and metastases (i.e. helps cancer evade
the immune system). By targeting the Clever-1 receptor on
macrophages, bexmarilimab alters the tumor microenvironment, reprogramming
macrophages from an immunosuppressive (M2) state to an immunostimulatory (M1)
one, upregulating interferon production and priming the immune system to
attack tumors and sensitizing cancer cells to standard of care.

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 Board’s 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 Board’s current beliefs and assumptions and are based on information
currently available to the Board.

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 Board believes 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