Approval of Share Subscriptions Based on Special Rights in connection with Amortisation of the First and Second 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 3,657,321 special rights entitling to 3,657,321 shares in the Company, for an aggregate subscription price of EUR 1,578,499.74 in connection with the scheduled amortisation payment of the First and Second Tranche Bonds (as defined below), occurred on 3 August 2026.

The Company has received a scheduled amortised payment notice from the bondholder for an aggregate amortised payment amount (including accrued interest) of EUR 913,500 for First Tranche bonds and EUR 665,000 for Second Tranche Bonds. Therefore, total aggregate amortised payment amount (including accrued interest) is EUR 1,578,500. As the Company has exercised its Share Settlement Option, the subscription price for the Shares subscribed for by the bondholder is EUR 0.4316 per Share being the lower of i) conversion price on the amortization date (EUR 0.50) or ii) 90 per cent of the lowest of (i) the volume weighted average price (“VWAP”) of a Share on the relevant payment date (3 August 2026), and (ii) the lowest of the VWAPs of a Share on each of the five consecutive dealing days ending on (and including) the dealing day immediately preceding the relevant payment date. Therefore, the Company has approved the exercise of 3,657,321 Special Rights entitling to 3,657,321 new Shares in total, for an aggregate subscription price of EUR 1,578,500. Of those Shares 2,116,543 are used to amortize the First Tranche Bonds (including accrued interest) and 1,540,778 to amortize the Second Tranche Bonds (including accrued interest). 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 the Second Tranche Bonds and recorded into the reserve for invested unrestricted equity.

The 3,657,321 shares subscribed for are shares already held by the Company in treasury. The Shares rank pari passu in all respects with the existing shares of the Company.

Following the amortisation, the aggregate number of shares in the Company is 227,881,315 and of these shares, the Company holds 21,342,679 in treasury. The shares held in treasury by the Company do not confer a right to dividends or other shareholder rights.