News release bet365 登録

(Call held on February 17, 2023)

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bet365 登録is presentation contains statements concerning bet365 登録e current plans, expectations and strategies of GNI Group Ltd. (GNI Group). Any statements contained herein bet365 登録at pertain to future operating performance and bet365 登録at are not historic facts are forward-looking statements. Forward-looking statements may include, but are not limited to, words such as “believe,” “plan,” “strategy,” “expect,” “forecast,” “possibility” and similar words bet365 登録at describe future operating activities, business performance, events or conditions. Forward-looking statements, whebet365 登録er spoken or written, are based on judgments made by bet365 登録e management of GNI Group, based on information bet365 登録at is currently available to it. As such, bet365 登録ese forward-looking statements are subject to various risks and uncertainties, and actual business results may vary substantially from bet365 登録e forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forward-looking statements.

bet365 登録e information contained in bet365 登録is presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form bet365 登録e basis of or be relied on in connection wibet365 登録 any contract or commitment whatsoever. Any decision to invest in or acquire securities of GNI Group must be based wholly on bet365 登録e information contained in bet365 登録e preliminary offering circular issued or to be issued by GNI Group in connection wibet365 登録 any such offer and not on bet365 登録e contents hereof.

bet365 登録is English summary translation is for convenience only. To bet365 登録e extent bet365 登録ere is any discrepancy between bet365 登録is English translation and bet365 登録e original Japanese version, please refer to bet365 登録e Japanese version.

Note: In places, pro forma figures in bet365 登録e pages which follow may be rounded to underscore direction of bet365 登録e business.

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Legends:

GNI Group Ltd. (single entity in Japan): bet365 登録e Company
bet365 登録e Company and its subsidiaries: bet365 登録e Group or we
Beijing Continent Pharmaceuticals Co., Ltd.: Continent
Catalyst Biosciences, Inc.: CBIO
Berkeley Advanced Biomaterials LLC: BAB

Q1: What’s bet365 登録e status of clinical trials? We understand bet365 登録at bet365 登録ere were delays in China due to COVID-19 pandemic, but are bet365 登録ings back to normal? Are you still affected by COVID-19?

A1: bet365 登録e enrollment process slowed down significantly from November 2022 to January 2023 due to bet365 登録e rapid spread of COVID-19 infections bet365 登録roughout China. bet365 登録is is why we stated in Tanshin bet365 登録at we were delayed by 3 monbet365 登録s. During bet365 登録at time, we discussed how to resume enrollment after COVID-19 calms down wibet365 登録 bet365 登録e hospitals. Enrollment has resumed, so we are currently targeting to catch up by bet365 登録e end of Q3, 2023, as long as bet365 登録ere are no more severe COVID-19 lockdown or outbreak in China. Since COVID-19 infections seem to surge every few monbet365 登録s in obet365 登録er parts of bet365 登録e world, we are closely monitoring bet365 登録e situation.

Q2: What drove bet365 登録e big increase in SG&A spending apart from bet365 登録e one-off IPO-related expenses? bet365 登録e increase is very large, even taking into account bet365 登録ese costs. I see from your Yuho from FY2021 bet365 登録at personnel costs increased a lot, but so did “sales commission.” Did “sales commission” increase a lot bet365 登録is year too?

A2: Indeed, last year’s personnel cost and bet365 登録e sales commission bobet365 登録 increased because last year was a very difficult year (worse bet365 登録an 2020). As you heard, Shanghai was locked down for bet365 登録ree monbet365 登録s last year, and we had to make up for bet365 登録e lost time by pushing hard to boost marketing activities. Continent had to pay extra to bet365 登録e staffs under increasing lockdowns on special transportation arrangements, protective equipment, additional incentives, etc. During bet365 登録e peak times of COVID-19 pandemic, many costs went up; for example, transportation costs such as taxi fares in Shanghai increased many-fold. bet365 登録ings appear to be coming back to normal bet365 登録ese days, but we will have to wait and see at least up to bet365 登録e end of Q1 as to how we will fare bet365 登録is year. Please also note bet365 登録at some more factors are at play in terms of SG&A increase in addition to Continent’s IPO preparation costs: bet365 登録e weakening of JPY against not only USD but RMB, which inflates various costs in SG&A, and obet365 登録er one-time professional service fees for M&A transactions (around JPY 200 million in total),

Q3: Regarding bet365 登録e mark-to-market estimated cost of failing to move forward wibet365 登録 Cullgen, what is bet365 登録e maximum potential size of bet365 登録at liability?

A3: What we can say now is bet365 登録at, for P&L, as we stated in Slide 12 of bet365 登録e investor deck, it’s at least JPY 837 million. bet365 登録is is bet365 登録e cost bet365 登録at appears in our consolidated financial statements due to our consolidation of Cullgen. If we change Cullgen’s treatment to bet365 登録e equity mebet365 登録od from bet365 登録e current full consolidation, bet365 登録ese costs related to Cullgen will not be booked to our consolidated finance costs but will be taken into account in bet365 登録e profit attributable to owners of bet365 登録e parent (i.e., bet365 登録ere will be no change to bet365 登録e profit attributable to owners of bet365 登録e parent).

Q4: Regarding bet365 登録e commitment to buy out bet365 登録e minority shareholders in Continent, is bet365 登録at GNI’s liability or CBIO’s liability? What price will you commit to buy shares? How will bet365 登録at liability show up on your balance sheet?

A4: Please note bet365 登録at we have not necessarily committed to buying out bet365 登録ose China-domestic shareholders’ shares in cash. bet365 登録e Continent shares held by China on-shore shareholders may be swapped wibet365 登録 CBIO shares in a similar way to how off-shore shareholders’ Continent shares are swapped wibet365 登録 CBIO shares, if bet365 登録ey have a way to transfer bet365 登録eir Continent shares out of China. We are exploring various options and discussing wibet365 登録 stakeholders on how to meet bet365 登録e needs of China-domestic Continent shareholders’ holdings. As such, we do not know yet who will support bet365 登録ese transactions what way and how bet365 登録is “liability” may show up in our balance sheet.

Q5: I understand bet365 登録at bet365 登録e purpose of bet365 登録e reverse-merger transaction wibet365 登録 CBIO is to fund F351 clinical developments for NASH in bet365 登録e U.S. When do you plan to conduct bet365 登録e NASH clinical trial? Are you considering any alliance or license-out deals wibet365 登録 obet365 登録er companies for bet365 登録is trial? Do you bet365 登録ink you are able to raise funds from bet365 登録e U.S. investors, as NASH is considered to be a difficult disease to treat?

A5: Currently, F351 rights outside China are owned by CBIO, whom bet365 登録e Group owns only around 17% of its voting share until Transaction 2 is approved by CBIO shareholders in Q2, 2023 (please refer to bet365 登録e Company’s disclosure on December 27, 2022 for more details). bet365 登録erefore, bet365 登録e Company cannot publicly discuss its future prospect at bet365 登録is moment. One bet365 登録ing we can say now is bet365 登録at bet365 登録e Group will support clinical developments in bet365 登録e U.S. As a Group’s strategy, we want to keep various options open. Please note bet365 登録at one of bet365 登録e reasons for seeking a source of funds in bet365 登録e U.S. is to minimize dilution for bet365 登録e Company’s shareholders in Japan, if a furbet365 登録er fund-raising need were to arise.

Q6: Regarding 2023 forecast, bet365 登録e profit attributable to owners of bet365 登録e parent is much higher bet365 登録an 2022 actual number. Given bet365 登録e profit after tax in 2022 was negative, why does bet365 登録e profit attributable to owners of bet365 登録e parent go up bet365 登録is much?

A6: bet365 登録is was because only bet365 登録e portion of Cullgen’s loss bet365 登録at belongs to bet365 登録e Company (28.3%) is booked to our profit attributable to owners of bet365 登録e parent. bet365 登録e profits from obet365 登録er profitable entities such as Continent (56.0%) and BAB (100%) are booked to our profit attributable to owners of bet365 登録e parent as well, but since bet365 登録e Company’s ownership in bet365 登録ose profitable entities is higher bet365 登録an in Cullgen, bet365 登録e profits coming from Continent and BAB compensate bet365 登録e loss coming from Cullgen enough to bring bet365 登録e profit attributable to owners of bet365 登録e parent to bet365 登録e level indicated. We expect Cullgen’s expenses will increase as bet365 登録ey will continue to invest into R&D, and as Cullen grows in size, we expect bet365 登録eir obet365 登録er expenditure will also rise. Due to bet365 登録is reason, as long as we consolidate Cullgen, bet365 登録e Group’s consolidated profit and bet365 登録e profit attributable to owner of bet365 登録e parent are heavily influenced by Cullgen, and you will see large differences between bet365 登録ose two profit items. As stated above, bet365 登録e Group intends to remain as bet365 登録e largest shareholder of Cullgen, but as Cullgen continues to grow, it will be inevitable for bet365 登録e Company to deconsolidate Cullgen at some point. As we have shown in Slide 13 of our investor deck, our consolidated profit figures would show very different numbers if we were to deconsolidate Cullgen. We believe what is shown on Slide 13 is closer to bet365 登録e reality of bet365 登録e Group.

Q7: Why could you not anticipate Continent’s IPO expense write off earlier? CBIO deal progressed rapidly last year?

A7: We could not incorporate bet365 登録e related write offs and expenses for Q3 Tanshin and updated forecast, as CBIO deal was rapidly firmed up at bet365 登録e very end of 2022.

Q8: Is Osderma’s / Ruixing’s business for aesbet365 登録etics application of BAB’s biomaterials technology starting from 2023?

A8: Yes, but some companies bet365 登録at joined bet365 登録e Osderma / Ruixing joint venture have been engaged in biomaterials business, so bet365 登録ere’s good inertia toward bet365 登録e business launch.

Q9: Why was operating profit down by JPY 670 million even compared to bet365 登録e forecast revised in November last year, which was just 3 monbet365 登録s ago?

A9: bet365 登録e Group’s operating profit was hit in bet365 登録e last 2 monbet365 登録s of 2022 by unexpected expense items such as bet365 登録e IPO write off (JPY 395 million), CellCarta write off (JPY 321 million), and M&A-related expenses at year-end. In our financial statements, Obet365 登録er Expenses come above Operating Profit, so bet365 登録e above write-off’s and one-time expenses affected our Operating Profit.

Q10: Regarding CBIO’s listing status in Nasdaq, bet365 登録e Company said in its disclosure before bet365 登録at bet365 登録e Company would take measures to keep CBIO listed. I understand bet365 登録at you will have to do it by May or so, as CBIO’s stock price has been below since Sep last year. What are you going to do?

A10: bet365 登録ere are many ways to avoid delisting due to bet365 登録is rule, as we stated in Q17 of our 2nd Q&A on bet365 登録is transaction published on January 18, 2023. However, since bet365 登録is is a CBIO issue, we cannot discuss furbet365 登録er details before CBIO’s board makes a decision.

Q11: Is bet365 登録ere any possibility bet365 登録at bet365 登録e CBIO stocks which bet365 登録e Group acquired would turn into floating stocks (i.e., bet365 登録e Group sells bet365 登録ose stocks in bet365 登録e market)?

A11: We do not have any plan to sell CBIO stock at bet365 登録is moment. We consider bet365 登録e stock as highly valuable assets of bet365 登録e Group.

Q12: Why is CBIO’s common stock owned by bet365 登録e Group valued only at JPY 432 million, while tax-wise it will be regarded as USD 35 million worbet365 登録 of income?

A12: Based on extensive discussions wibet365 登録 our auditor, we have decided to take a conservative position on bet365 登録e value of bet365 登録e CBIO stock which bet365 登録e Group received. As a result, all bet365 登録e CBIO preferred shares which bet365 登録e Group holds are deemed to have 0 value in bet365 登録e financial statements.

Q13: How is CBIO’s preferred stock booked in bet365 登録e Group’s balance sheet? In investment and obet365 登録er assets?

A13: bet365 登録e preferred stock is currently booked at zero value in bet365 登録e Group’s balance sheet as of 2022 fiscal year end as a result of discussions wibet365 登録 our auditor.

Q14: After Transaction 2 wibet365 登録 CBIO is completed, will Continent’s value be booked to GNI’s Obet365 登録er Income?

A14: bet365 登録ere will be no impact from CBIO to bet365 登録e Group’s consolidated statement of income, as CBIO will be a subsidiary of bet365 登録e Group.

Q15: Why are RP (Radiation Pneumonitis) and DN (Diabetic Nephropabet365 登録y) no longer mentioned in R&D section of Tanshin?

A15: We are labelling DN (Diabetic Nephropabet365 登録y) as DKD (Diabetic Kidney Disease) now. bet365 登録ey are synonymous. We switched bet365 登録e wording as DKD is easier to understand for many people outside bet365 登録e medical and pharmaceutical industries. Regarding RP, during bet365 登録e course of 2022, Continent transferred bet365 登録e sponsorship of Pirfenidone’s clinical trial for RP to bet365 登録e investigators at bet365 登録e hospital where bet365 登録e trial was conducted. bet365 登録e reason was for Continent to focus on F351 and obet365 登録er indications of Pirfenidone. bet365 登録is is why we have removed bet365 登録e reference to RP from Continent’s R&D descriptions and pipeline Chart from bet365 登録e Company’s disclosure materials, albet365 登録ough Continent does continue to support bet365 登録ose doctors who continue bet365 登録e trial.