Capital increase for new shares to transfer to AP Biosciences, Inc.

OBI Pharma Inc. to attend the 36th J.P. Morgan Annual Healthcare Conference
December 22, 2017
OBI Pharma Inc. to attend the investor conference on new drug development, hosted by Masterlink Securities
January 5, 2018
  1. Type of merger/acquisition (e.g. merger, consolidation, spin-off,acquisition, or receiving assignment of shares): Receiving assignment of shares
  2. Date of occurrence of the event: Dec 29, 2017
  3. Names of companies participating in the merger (e.g.name of the other company participating in the merger or consolidation, newly established company in a spin-off, acquired company, or company whose shares are taken assignment of): AP Biosciences, Inc.
  4. Counterparty (e.g.name of the other company participating in the merger or consolidation, company taking assignment of the spin-off, or counterparty to the acquisition or assignment of shares): ABPROTIX INC.
  5. Counterparty as stakeholder: No
  6. Relationship between the counterparty and the Company (investee company in which the Company has re-invested and has shareholding of XX%), and explanation of the reasons for the decision to acquire, or take assignment of the shares of, an affiliated enterprise or related person, and whether it will affect shareholders’ equity: ABPROTIX INC., the trading counterparty, does not have any relationship with the company. The capital increase for the new shares is about 1% of the total issued shares. Thus does not affect the rights and interest of existing shareholders.
  7. Purpose/objective of the merger/acquisition: Enhance product competitiveness and new drug development capabilities
  8. Anticipated benefits of the merger/acquisition: Strengthen R&D capabilities for antibodies
  9. Effect of the merger or consolidation on net worth per share and earnings per share: The capital increase for 1,675,000 new shares to transfer to AP Biosciences, Inc. is about 1% of the total issued shares. Thus does not affect the net value of existing shares.
  10. Share exchange ratio and basis of its calculation: Combination of factors, including audited financial reports, operation performance, stock price, financial status, and professional opinion were considered in the final agreement.
  11. Scheduled timetable for consummation: Jan 10, 2018
  12. Matters related to assumption by the existing company or new company of rights and obligations of the extinguished (or spun-off) company (Note 1): Not applicable
  13. Basic information of companies participating in the merger (Note 2): AP Biosciences, Inc., with a library of human antibodies, antibody drug platform, antibody optimization technology, and improve antibody technology to increase OBI’s product competitiveness.
  14. Matters related to the spin-off (including estimated value of the business and assets planned to be assigned to the existing company or new company; the total number and the types and volumes of the shares to be acquired by the split company or its shareholders; matters related to the reduction, if any, in capital of the split company) (note: not applicable other than where there is announcement of a spin-off): Not applicable
  15. Conditions and restrictions on future transfers of shares resulting from the merger or acquisition: Not applicable
  16. Other important stipulations: Not applicable
  17. Objections to the present transaction from directors: None
  18. Other matters to be specified: On Oct 20, 2017, the Board of Directors agreed to issue 1,675,000 shares in exchange with ABPROTIX INC.’s 6,700,000 shares (representing 67% of the issued shares). The chairman signed the issuance of new shares on the base date of Dec 29, 2017 and schedule timetable for consummation exchange on Jan 10, 2018. Approval by the Financial Supervisory Commission on Dec 22, 2017 (No.1060048379)

Note 1: Responsibility of existing or newly established company bearing the merger and acquisition includes eliminating treasury shares, securities with equity nature.

Note 2: The basic information involved in the merged company includes the company name and the nature of the business.