SinoMab BioScience Limited — Capital/Financing Update 2023

Dec 14, 2023

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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SinoMab BioScience Limited 中國抗體製藥有限公司

(Incorporated in Hong Kong with limited liability)

(Stock code: 3681)

SUBSCRIPTIONS OF NEW SHARES UNDER GENERAL MANDATE

On 14 December 2023 (after trading hours), the Company entered into fifteen Subscription Agreements with fifteen Subscribers, all being Independent Third Parties, whereby the Subscribers conditionally agreed to subscribe for and the Company conditionally agreed to issue an aggregate of 56,834,719 Subscription Shares at the Subscription Price of HK$1.29 each.

The Subscription Shares represent (i) approximately 5.49% of the issued share capital of the Company as at the date of this announcement; and (ii) approximately 5.21% of the issued share capital of the Company as enlarged by the issue of the Subscription Shares (assuming there will be no change in the total number of issued Shares of the Company between the date of this announcement and the issue of the Subscription Shares). As the Subscription Shares will be issued pursuant to the General Mandate, the Subscription Agreements and the transactions contemplated thereunder are not subject to the approval of the Shareholders.

The Subscription Price was arrived at an arm’s length negotiations between the Company and each of the Subscribers with reference to the average closing price per Share as quoted on the Stock Exchange for the last twenty one consecutive trading days, immediately preceding the date of the Subscription Agreements. The Subscription Price of HK$1.29 per Subscription Share represents (i) a discount of approximately 18.35% to the closing price per Share of HK$1.58 as quoted on the Stock Exchange on 14 December 2023, being the date of the Subscription Agreements; and (ii) a discount of approximately 16.77% to the average closing price per Share of HK$1.55 as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Subscription Agreements.

The Company will apply to the Listing Committee for the listing of, and permission to deal in the Subscription Shares on the Stock Exchange.

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Upon Completion, the aggregate gross proceeds of the Subscriptions will amount to HK$73,316,794 and the aggregate net proceeds, after the deduction of all relevant fees and expenses, will be approximately HK$73,181,794, representing a net Subscription Price of approximately HK$1.29 per Subscription Share. The Company intends to utilise the net proceeds from the Subscriptions in the manner set out in the paragraph headed ‘‘REASONS FOR THE SUBSCRIPTIONS AND USE OF PROCEEDS’’ of this announcement.

Shareholders and potential investors should note that completion of each of the Subscriptions is subject to fulfillment of the conditions under the relevant Subscription Agreement. As the Subscriptions may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

SUBSCRIPTIONS OF NEW SHARES UNDER GENERAL MANDATE

On 14 December 2023 (after trading hours), the Company entered into fifteen (15) Subscription Agreements with fifteen (15) Subscribers, pursuant to which the Company has conditionally agreed to issue and the Subscribers have conditionally agreed to subscribe for an aggregate of 56,834,719 new Shares at the Subscription Price of HK$1.29 per Subscription Share.

The terms of each of the Subscription Agreements are identical except for the name and details of the Subscribers.

THE SUBSCRIPTION AGREEMENTS

The principal terms of the Subscription Agreements are set out below.

Date: 14 December 2023 (after trading hours)

Parties to the Subscription Agreements:

• (1) the Company; and

• (2) the Subscribers.

The Subscription Shares

The Subscription Shares in aggregate represent (i) approximately 5.49% of the issued share capital of the Company as at the date of this announcement; and (ii) approximately 5.21% of the issued share capital of the Company as enlarged by the issue of the Subscription Shares (assuming there will be no change in the total number of issued Shares of the Company between the date of this announcement and the issue of the Subscription Shares).

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The Subscription Price

The Subscription Price is fixed at HK$1.29 per Subscription Share, which represents:

• (i) a discount of approximately 18.35% to the closing price per Share of HK$1.58 as quoted on the Stock Exchange on 14 December 2023, being the date of the Subscription Agreements;

• (ii) a discount of approximately 16.77% to the average closing price per Share of HK$1.55 as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Subscription Agreements; and

• (iii) a discount of approximately 9.15% to the average closing price per Share of HK$1.42 as quoted on the Stock Exchange for the last ten consecutive trading days immediately preceding the date of the Subscription Agreements.

The net Subscription Price, after deduction of all relevant fees and expenses, is estimated to be approximately HK$73,181,794.

The Subscription Price was arrived at an arm’s length negotiations between the Company and each of the Subscribers with reference to average closing price per Share as quoted on the Stock Exchange for the last twenty one consecutive trading days, immediately preceding the date of the Subscription Agreements.

The Directors (including the independent non-executive Directors) consider that the terms of the Subscription Agreements are fair and reasonable and are in the best interests of the Company and the Shareholders as a whole.

Condition precedent to the Completion of Subscription Agreements

Completion of each Subscription Agreement is conditional upon the approval of the listing of, and permission to deal in, the relevant Subscription Shares being granted by the Listing Committee of the Stock Exchange (either unconditionally or subject to conditions which are acceptable to the Company).

The above-mentioned condition is not waivable by any Party. In the event that the said condition is not fulfilled by 5:00 p.m. (Hong Kong time) on 12 January 2024 (or such later time and/or date as may be agreed by the Parties in writing), all rights, obligations and liabilities of the Parties shall cease and determine and neither of the Parties shall have any claim against the other save for any antecedent breach.

Completion of the Subscriptions

Subject to the fulfillment of the condition precedent in the Subscription Agreements, Completion of each Subscription Agreement will take place on the fifth (5th) Business Day after the date of fulfillment of the above condition or such other date as may be agreed amongst the Parties.

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Completion of the Subscriptions are subject to fulfilment of the condition precedent in the Subscription Agreements and the Subscriptions may or not may proceed. Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

Ranking of the Subscription Shares

The Subscription Shares, when issued, will rank pari passu in all respects with the existing Shares in issue at the date of issue of the Subscription Shares.

General Mandate

The Subscription Shares will be allotted and issued under the General Mandate granted to the Directors at the AGM, pursuant to which the Directors are authorised to allot and issue up to 206,984,080 Shares, being 20% of the number of issued Shares as at the date of the AGM, which was 1,034,920,400 Shares.

As at the date of this announcement, no Shares have been allotted and issued under the General Mandate. The General Mandate is sufficient for the allotment and issue of the Subscription Shares. As such, the allotment and issue of the Subscription Shares is not subject to the Shareholders’ approval at a general meeting of the Company.

Application for listing

Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

INFORMATION ON THE COMPANY AND THE SUBSCRIBERS

The Company is a company incorporated in Hong Kong with limited liability. The Group is principally engaged in research and development of pharmaceutical products.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Subscribers is an Independent Third Party.

REASONS FOR THE SUBSCRIPTIONS AND USE OF PROCEEDS

The Directors consider that the Subscriptions represent a good opportunity for the Company to raise capital to meet the Company’s funding needs and strengthen the shareholding base of the Company. The Board is of the view that the terms of the Subscription Agreements and the transactions contemplated thereunder are on normal commercial terms agreed upon after arm’s length negotiations between the parties, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Upon Completion, the aggregate gross proceeds of the Subscriptions will amount to HK$73,316,794 and the aggregate net proceeds, after the deduction of all relevant fees and expenses, will be approximately HK$73,181,794, representing a net Subscription Price of approximately HK$1.29 per Subscription Share.

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The Company intends to use the net proceeds to (i) 35% for marketing and commercialisation, including establishment of a sales and marketing team, postcommercialisation medical activities and marketing and academic promotion activities for Susciralimab; (ii) 20% for commercial production and post-launch site transfer for Susciralimab; (iii) 15% for BLA commercialisation application and extension study for Susciralimab; (iv) 15% for clinical trials of Susciralimab for the treatment of mild cognitive impairment; and (v) 15% for clinical studies for SM17 for the treatment of atopic dermatitis. The net proceeds of the Subscriptions are expected to be utilized by the end of 2025.

FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST 12 MONTHS

The Company has not conducted any equity fund raising activity within the 12-month period prior to the date of this announcement.

EFFECT ON SHAREHOLDING STRUCTURE

As at the date of this announcement, the Company has 1,034,920,400 Shares in issue. Assuming there will be no further changes in the issued share capital of the Company between the date of this announcement and immediately prior to the issue of the Subscription Shares in full, the shareholding structure of the Company (i) as at the date of this announcement and (ii) immediately after Completion of the Subscriptions, are set out as below for illustration purposes only:

Name of Shareholders Mr. Jing QIANG1 Apricot Entities2 Hainan Haiyao Co., Ltd. (海南海藥股份有限公司)3 Skytech Technology Limited4 Public Shareholders Subscribers Other Public Shareholders Total	As at the date of this announcement No. of Shares Appropriate % 72,823,636 7.04 212,879,400 20.57 158,882,115 15.35 129,729,200 12.54 — — 460,606,049 44.51 1,034,920,400 100.00	Immediately after Completion of Subscriptions No. of Shares Appropriate % 72,823,636 6.67 212,879,400 19.50 158,882,115 14.55 129,729,200 11.88 56,834,719 5.21 460,606,049 42.19 1,091,755,119 100.00	Immediately after Completion of Subscriptions No. of Shares Appropriate % 72,823,636 6.67 212,879,400 19.50 158,882,115 14.55 129,729,200 11.88 56,834,719 5.21 460,606,049 42.19 1,091,755,119 100.00
			100.00

Notes:

1. 46,711,640 Shares of which were held through his wholly owned company, Grogene Technology Limited (格 擎生物科 技有限公司). Mr. Jing QIANG is the spouse of Ms. Wenyi LIU, a non-executive Director.

1. Shares held by Apricot Capital (上海杏澤投資 管理 有限公司) and Shanghai Yueyi Investment Centre (Limited Partnership)* (上海月 溢 投資中心(有限合夥)) are through Apricot Oversea Holdings Limited, West Biolake Holdings Limited, Apricot BioScience Holdings, L.P., Le Rong Limited and Zliverland Holdings Limited (collectively, the ‘‘Apricot Entities’’), which are ultimately controlled by Ms. Wenyi LIU, a non-executive Director. Ms. Wenyi LIU is the spouse of Mr. Jing QIANG.

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1. Pursuant to a share charge where Hainan Haiyao Co., Ltd (海南海 藥股 份有限公司) (‘‘Hainan Haiyao’’) charged 158,882,115 Shares to China Citic Bank Co., Ltd., Haikou Branch ( ‘‘ China Citic Bank’’), China Citic Bank had a security interest in 158,882,115 Shares which were beneficially owned by Hainan Haiyao.

2. Skytech Technology Limited is a company wholly owned by Dr. Shui On LEUNG, an executive Director and the chairman of the Company.

DEFINITIONS

In this announcement, the following expressions shall, unless the context requires otherwise, have the following meanings:

• ‘‘AGM’’

the annual general meeting of the Company held on 12 June 2023 in which the Shareholders had approved, among other matters, the grant of the General Mandate

• ‘‘Board’’ the board of Directors

• ‘‘Company’’ SinoMab BioScience Limited (中國抗體 製藥 有限公司), a company incorporated in Hong Kong with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange

• ‘‘Completion’’

• completion of the Subscriptions in accordance with the terms of the Subscription Agreements

• ‘‘connected person(s)’’ has the meaning as ascribed to it under the Listing Rules

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘General Mandate’’ the general mandate of the Company granted to the Directors by way of passing an ordinary resolution at the AGM to, inter alia, allot, issue and deal with new Shares not exceeding 20% of the aggregate number of the issued Shares as at the date of the AGM, pursuant to which a maximum of 206,984,080 Shares may fall to be allotted and issued as at the date of this announcement

• ‘‘Group’’ collectively, the Company and its subsidiaries from time to time

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Third Party(ies)’’

• an individual or a company which is not a connected person of the Company within the meaning of the Listing Rules

• ‘‘Listing Rules’’

• the Rules Governing the Listing of Securities on the Stock Exchange

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• ‘‘Parties’’ or ‘‘Party’’ the named parties to the Subscription Agreements or any of them

• ‘‘PRC’’ the People’s Republic of China, for the purpose of this announcement excluding Hong Kong, Macau Special Administrative Region and Taiwan

• ‘‘Share(s)’’ ordinary share(s) in the share capital of the Company ‘‘Shareholder(s)’’ holder(s) of the Shares ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Subscribers’’ fifteen subscribers under the Subscription Agreements, collectively, the Subscribers, and ‘‘Subscriber’’ means any one of them

• ‘‘Subscription(s)’’ subscription(s) of Subscription Shares by the Subscribers at the Subscription Price pursuant to the Subscription Agreements

• ‘‘Subscription Agreements’’ the subscription agreement dated 14 December 2023 and entered into between the Company and the Subscribers, collectively, the Subscription Agreements, and ‘‘Subscription Agreement’’ means any one of them

• ‘‘Subscription Price’’ the subscription price of HK$1.29 per Subscription Share ‘‘Subscription Shares’’ a total of 56,834,719 new Shares to be issued by the Company to the Subscribers under the Subscription Agreements

• ‘‘substantial shareholder(s)’’ has the meaning as ascribed to it under the Listing Rules ‘‘%’’ per cent.

By Order of the Board

SinoMab BioScience Limited Dr. Shui On LEUNG

Executive Director, Chairman and Chief Executive Officer

Hong Kong SAR, 14 December 2023

As at the date of this announcement, the executive director of the Company is Dr. Shui On LEUNG, the non-executive directors of the Company are Dr. Haigang CHEN, Mr. Xun DONG, Dr. Wenyi LIU, Dr. Jianmin ZHANG and Mr. Lei SHI, and the independent nonexecutive directors of the Company are Mr. George William Hunter CAUTHERLEY, Mr. Ping Cho Terence HON, Dr. Chi Ming LEE and Mr. Dylan Carlo TINKER.

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