EQS-Adhoc: PAION AG announces fully underwritten rights issue with target gross proceeds of EUR 10 million

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Ad-hoc Announcement

Inside information according to Article 17 EU Market Abuse Regulation (MAR)

PAION AG announces fully underwritten rights issue with target gross proceeds of EUR 10 million

• Two investors have committed to backstop the transaction and acquire the shares

Aachen, 13. October 2023 - The Management Board of the specialty pharma company PAION AG (ISIN DE000A3E5EG5; Frankfurt Stock Exchange, Prime Standard: PA8) has today decided, with the approval of the Supervisory Board, to increase the share capital of the company by partially utilizing the authorized capital by way of a rights issue with target gross proceeds of EUR 10 million. The Management Board and Supervisory Board will determine details of the capital increase, including the subscription price, the number of new shares to be issued and the subscription ratio, at a later date. Subject to the approval of the prospectus for the rights issue by the German Federal Financial Supervisory Authority (BaFin) and the publication of the approved prospectus, it is expected that the subscription period will begin in the second half of October 2023.

The Humanwell Healthcare Group from China has committed itself in an investment agreement – subject to certain conditions – to purchase new shares not subscribed for by existing shareholders or other investors at the subscription price per share in the rights offering for a total amount of up to EUR 6 million. In addition, Nice & Green S.A., a Swiss small/midcap investor, has committed itself in a backstop agreement – subject to certain conditions – to purchase new shares not subscribed for by existing shareholders, or other investors (including Humanwell) at the subscription price per share for an additional total amount of up to EUR 5 million.

The commitment of Humanwell is capped at a number of new shares not exceeding a holding of 19.9% of the voting rights in the company following the settlement. Humanwell also committed itself to a potential follow-on investment in the company through a capital increase under exclusion of subscription rights depending on whether Humanwell’s holding following the rights issue has reached at least 9%. The company also agreed in the investment agreement to reasonably support Humanwell in assuming up to two seats in the company’s supervisory board depending on Humanwell’s participation in the company crossing certain thresholds.

PAION AG will publish the securities prospectus on its website (www.paion.com) after its approval by BaFin. The securities prospectus as well as the subscription offer to be published in the German Federal Gazette (Bundesanzeiger) following the approval of the prospectus will contain the further details of the rights offering, such as details regarding the subscription period during which shareholders may exercise their subscription rights, subscription rights trading, the placement of any rump shares and the expected date of admission of the new shares to trading on the Frankfurt Stock Exchange (Prime Standard).

PAION will use the net proceeds from the capital increase for investments in its commercial infrastructure and launch of Byfavo^® in general anesthesia in Europe, for product life cycle management and fulfillment of development obligations and for general corporate purposes.

Humanwell and PAION are currently jointly evaluating and negotiating potential areas for future collaboration.

End of inside information