Faron Initiates Phase 2 Part of BEXMAB Study

The Board of Directors of Faron Has Resolved on a Warrant Program and an Issuance of 319,944 Warrants to IPF Partners

Company announcement, February 28, 2022 - 07:45 PM (EET) / 05:45 PM (GMT) / 12:45 PM (EST)

TURKU, FINLAND / BOSTON, MA - Faron Pharmaceuticals Ltd. (AIM: FARN, First North: FARON), a clinical stage biopharmaceutical company focused on building the future of immunotherapy by harnessing the power of the immune system to tackle cancer and inflammation, announced today, February 28, 2022, that it had entered into a secured debt agreement (the "Funding Agreement") with IPF Partners ("IPF"). As part of the arrangement relating to the Funding Agreement, Faron has committed to granting IPF special rights entitling them to subscribe for ordinary shares of the Company against payment ("Warrants").

In accordance with the Funding Agreement, the Board of Directors of the Company has on Monday February 28 2022, based on an authorization granted to the Board by shareholders at the Company's Annual General Meeting held on April 23, 2021, resolved upon a warrant program directed to IPF. Pursuant to the warrant program, the Warrants are issued without consideration. The Warrants are issued as a part of Funding Agreement and therefore, from the Company's point of view, there is a weighty financial reason for the program and the issuance of Warrants thereunder.

Pursuant to the warrant program, the Warrants are issued at the date of each drawdown under the Funding Agreement. The maximum total number of warrants to be granted under the current warrant program agreed on Monday February 28, 2022 is 600,000, under the authorization granted to the Board by shareholders at the Company's Annual General Meeting held on April 23, 2021. Each warrant entitles its holder to subscribe for one new share in the Company. The subscription price per share on the basis of the Warrants will equal the 30-day volume-weighted average price of an ordinary share of Faron on the Nasdaq Helsinki First North exchange immediately preceding the drawdown date of the respective tranche. The Warrants may be exercised for a period of seven years following the drawdown of each tranche under the Funding Agreement, except for the first drawdown, for which the subscription period will commence on March 25, 2022 and end on the date falling seven years after such date. The terms and conditions of the Warrants will be available on the Company's website at: https://www.faron.com/investors/aim-rule-26.

As announced on Monday February 28, 2022 , the Company has pursuant to the warrant program resolved to issue 319,944 Warrants to IPF in relation to the first tranche utilized on Monday, February 28, 2022. The subscription price per share with respect to Warrants issued in respect of the drawdown of the first tranche is, in accordance with the above, EUR 3.126 per share (subject to adjustment in accordance with the terms and conditions of the Warrants).