Events of Default

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE EU REGULATION 596/2014 ("MAR") AND ARTICLE 7 OF MAR AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR")

Faron Pharmaceuticals Ltd

("Faron" or the "Company")

Company announcement, February 19, 2024 at 10:30 a.m. GMT / 12:30 p.m. EET

Inside information: the Company is in Events of Default under the terms of the Funding Agreement between IPF Fund II SCA, SICAV-FIAR and Faron Pharmaceuticals Ltd

TURKU, FINLAND / BOSTON, MA - Faron Pharmaceuticals Ltd (First North: FARON, AIM: FARN), a clinical stage biopharmaceutical company pioneering macrophage reprogramming for effective anticancer immunotherapies, today announces that it is in breach of several undertakings agreed in the secured debt agreement dated February 28, 2022 between IPF Fund II SCA, SICAV-FIAR ("IPF") as Lender and Faron Pharmaceuticals Ltd as Borrower ("Funding Agreement") and subsequent waiver letters provided by IPF, and is therefore in several Events of Default, as defined in the Funding Agreement.

Faron's bank accounts are pledged to IPF and IPF has notified Faron's banks of the blocking of the Pledged Accounts due to the above mentioned breaches. The Company presently does not have ability to remedy the breaches, nor make payments to third parties without separate consent from IPF. Negotiations related to possible restructuring of the loan facility as well as waiver of covenant obligations are ongoing with IPF. A further announcement will be made in due course.

The total cash and cash equivalents held by the Company is currently ca. EUR 4.3 million, which are enough to cover the company's financing needs until the beginning of April, 2024.

About Faron Pharmaceuticals Ltd.