Approval of Share Subscriptions Based on Special Rights in connection with Advanced Amortisation of the First Tranche Bonds

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.