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

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.

About bexmarilimab