Financial Measures for
Increased Orders of GBS-007
June 23, 2022

Kidswell Bio Corporation

Background• Solid sales performance of GBS-007（Ranibizumab BS）• Increased production is necessary due to orders that exceed expectations
Financing for working capital for increased orders/production and facility
expansion/ reinforcement for a mid-to-long-term stable supply of GBS-007 isrequired.
Outline of GBS-007• A medicine for age-related macular degeneration• Biosimilar of Anti-VEGF antibody drug Ranibizumab• Launched in Dec. 2021 as the first biosimilar in theophthalmic fieldTarget disease: Agerelated maculardegeneration

Age-related macular degeneration with subfoveal choroidal
neovascularization Choroidal neovascularization in pathologicalmyopia⇒ A disease in which waste products accumulate in the macula,which controls eyesight in the eyeball, or new blood vessels formin the macula with aging, making it difficult to see

Development Partner:
Senju Pharmaceutical Co.,Ltd.

• One of the leading domestic companies in the field of
ophthalmology, which handles a wide range of medical drugs
for ophthalmology and otolaryngology.

Market of Anti-VEGF
antibody drug

• Domestic market for existing treatments for agerelated macular degeneration
Lucentis , Eylea, Beovu, Vabysmo

2Outline of financing -For increased production and mid- to longterm manufacturing capacity expansion of GBS-007-• Financing for increased orders of GBS-007

Mizuho BankCVI Investments, Inc.

Long-term debt

Equity finance
CB: 500 million yen+
Stock Acquisition Rights/
Warrants: 400 million yen

Working Capital

Facility Reinforcement

Working capital for increasedordersFacility reinforcement funds forlong-term stable supply

1 billion yen

GBS-007（Ranibizumab BS）
3

Financing –Debt from Mizuho BankIncrease advance payment for drug substance manufacturing andformulation ＋ packaging due to increased orders of GBS-007⇒ Allocate the long-term debts from Mizuho Bank as a working capitaland increase manufacturing capacity of GBS-007⇒ Secure a reliable contribution to earnings in the biosimilar business
OrdersOrdersDrug Substance Manufacturing to
Formulation ＋ Packaging

OrdersDrug Substance Manufacturing to
Formulation ＋ Packaging

OrdersOrders（Advance
Payment）

OrdersDeli （Advancevery Payment）

Drug Substance
Manufacturing
Company

Delivery

Deli
very

Pharmaceutical
Manufacturer

Drug Substance Manufacturing to
Formulation ＋ Packaging

Drug Substance Manufacturing to
Formulation ＋ Packaging
Drug Substance Manufacturing to
Formulation ＋ Packaging

Future revenue

Delivery
Delivery
Delivery

Senju
Pharmaceu
tical Co.,
Ltd.
Delivery

Medical Institutions
and Patients
4Financing –Equity finance by CVI Investments, Inc.Reinforce a mid-to-long-term stable supply system of GBS-007⇒ Equity finance for facility reinforcement to expand a manufacturing
capacity※ Image of biomedicine manufacturing process (Partially omitted)※※

Purification Process

Culture Process

Preculture

CultureCentrifugation

Chromatography

Formulation※
Process

Packaging and※Shipping

Filtration /Filling

Expand the manufacturing capacity in each process
Facility expansion/
reinforcement
For increasedorders/production
Working capital for increasedorders/ production（Debt from Mizuho Bank）

Reinforce a mid-to-long-term
stable supply of GBS-007

Secure a reliable
contribution toearnings in thebiosimilar business5

Points of Financing –Debts＋EquitiesThis financing scheme was realized with reliance on the high contribution of
GBS-007 to earnings and potential of future corporate value enhancement.
 Financing scheme based on reliable revenue from launched BS products,
especially GBS-007
 Combine equity finance with debts from Mizuho Bank for KWB’s financial
stability and maximum consideration to dilution of stock value
Debts: 1 billion yen (Mizuho Bank)
Outline of Financing Scheme

Evaluation

Long-Term Debt: 1 billion yen※Debts does not lead to dilution of stock value.

A stable revenue base and possible business strategies⇒ Future profitability of GBS-007⇒ A stable revenue base＋Expectation for future businesspotential

Equity Finance: 900 million yen in total (CVI Investments, Inc.)
Outline of Financing Scheme

Evaluation

CV: 500 million yen（※ With downward
adjustment）• Secure 500 million yen at the issuance• Convertible price: 110% of the previous
day's closing price• Coupon:0.625％

Coupon＋Exercise price at 110%
• With the launch of GBS-007, it has been judged revenue ofthe biosimilar business has entered a stage of expansion.
⇒ Continuous profitability of the biosimilars business

Stock Acquisition Rights: 400 million yen（※Without downward adjustment）• Initial exercise price: 110% of the previous
day's closing price (Fixed)

Exercise price at 110％（Fixed）＋Without downward adjustment• Higher stock prices (minimum 110% or more) increase thelikelihood of exercise⇒ Expectation for future stock price and corporate value
6

Business Forecasts for FY 2022
Business Forecast
Sales increased with the addition of GBS-007
R&D strategy shifts to focus on investment in SHED as a growth driver while securingbiosimilar-led structure for expanding and stabilizing profit••

Sales comparison (Image chart）（JPY 100 million）

（億円）
30

R&D expenses comparison(Image chart)

30

Temporaryprofit

25

25

20

20

15

15

Stable profit
mainly from
GBS-007105Growthinvestment in
SHED, etc.

10

5Results for FY 2021
BS

(Launched)BS

Forecast for FY 2022

(Development)

OthersResults for FY 2021

BS

SHED

Forecast for FY 2022

JRM-001

BS: Stable profit&
Development
expenses

New drug andothers• Financing to Secure the Revenue Contribution of GBS-007• Financing related to SHED will also be conducted in a timely and appropriatemanner with the highest priority on leading to an increase in corporate value.

7

Roadmap of KWB2.0• Start financing for accelerating SHED development• Strengthen a domestic and global R&D base
• Accelerate SHED R&D activities to realize our vision andincrease corporate value.

• Continue stable revenue from biosimilar business andExecuted or In Progress

KIDS WELL, ALL WELL

reduce manufacturing costs• Determine when to achieve profitability by prioritizing
accelerated investment(Profitability can be achieved due to R&D spending
restrictions)
Accelerating cell therapy
products development
Focusing on SHED development

Establishment of revenue base
Establishment of biosimilar
development technology• New BS pipeline development

Founded (2001)
to FY 2021

• Steady development progress in Japanand overseas• Establishment of SHED platform• Active investment in human resources
and capital• Diverse personnel structure, including
experts of cell medicine development
and human resources with knowledge of
new modalities• Stable revenue from three BS products• Started development of the 4th BS
product

Aiming to launch the world's
first SHED medicine/ therapy
by FY2030• Accelerating development in overseas.
in addition to domestic development• Accelerating R&D by fund-raising fromoverseas investors• Acquisition of biopharmaceuticaldevelopment know-how

Launching cellular medicine/cell therapy products• Strengthening SHED business activities

SHED + Human Resource Development
Maintaining stable revenue of biosimilar business

FY 2022

FY 2025 （Turning profitable）（3 billion yen of sales and 1 billion yenof operating profit ）FY 2030 onward
8Our Role in Society
Two Virtuous Cycles through “KidsCentricity”“

MedicalExpenses Reduction &improvement ofmedial access

New Medical
Treatment

Creating regenerative medicine
with SHED for all generations

More people will overcome diseases andthey will play an active role in our society.

Drugdiscovery

Patentapplication

Combining individual technologies andknow-how for building up
efficient development
systemProduct
manufacturing

Clinicaldevelopment

Integrating technologies and know-how in Japan andoverseas and building up efficient R&D system

9All for Kids, Kids for All

KIDS WELL, ALL WELL

June 23, 2022
Kidswell Bio Corporation
Code: 4584 (TSE Growth Market)
Masaharu Tani, President & CEO

Announcement for debt financing from Mizuho BankTokyo, June 23, 2022 – Kidswell Bio Corporation (KWB) resolved debt financing from Mizuho Bankat the Board of Directors today.
1.

Purpose of debt financing

As GBS-007, KWB’s third biosimilar product, shows a solid sales performance with unexpected
increased orders, a debt from Mizuho Bank will be used for working capital to establish amanufacturing and supply system of drug substances, formulation and packaging of GBS-007 tocontribute to future revenue of KWB. As stated in the Mid-Term Strategic Plan KWB 2.0 announced
on May 12, 2022, while strengthening the biosimilar business, which is our stable growth driver, KWB
will drive research and development activities to improve our corporate value.
Under “Kids Well, All Well”, KWB is targeting pediatric disease, rare and intractable diseases andengages in the development and creation of new medical treatments as well as new drugs aiming atcomprehensive healthcare system for children as well as families, and society.
The impact on the business results for the fiscal year ending March 2023 is expected to be minimal.
2.

Outline of debt financing(1) Name of Bank

Mizuho Bank, Ltd.

(2) AmountJPY 1 billion(3) Borrowing rate

TIBOR for three months ＋ Spread(4) Drawdown dateJune 30, 2022

(5) Term of payment

June 30, 2027

(6) Status of collaterals pledged

Without security and guarantee

About Kidswell Bio Corporation (KWB)
Kidswell Bio Corporation will challenge pediatric disease as a new field, in addition to intractable
and rare diseases on which KWB has also been focusing for R&D. We would like to contribute tochildren who have hopes and dreams for their bright future.

Furthermore, with our biotech

expertise and children’s potential vital force such as SHED, stem cell from exfoliated deciduous teeth,
we envision creating new pharmaceuticals and therapeutics for all people under “Kids Well, All Well.”Contact:
Kidswell Bio Corporation
Tel: +81-3-6222-9547 Mail: info@kidswellbio.com

June 23, 2022
Kidswell Bio Corporation
Code: 4584 (TSE Growth Market)
Masaharu Tani, President & CEO

Announcement of issuance of the 4th series of convertible bonds with stock acquisitionrights and the 15th series of stock acquisition rights(Extracted from Japanese version)
Tokyo, June 23, 2022 – Kidswell Bio Corporation (KWB) is pleased to inform you that KWB has
resolved at the Board of the Directors meeting today to issue the 4th series of convertible bonds withstock acquisition rights and the 15th series of stock acquisition rights and executed a purchaseagreement for them subject to effect of the notification under the Financial Instruments andExchange Act.
CVI Investments, Inc., to which the convertible bonds with stock acquisition rights and the stockacquisition rights are to be allotted, is managed by Heights Capital Management, Inc.

Heights

Capital Management, Inc. belongs to the Susquehanna International Group, one of the world's largest
financial conglomerates, and has a track record of over 100 biotechnology investments and asset
management. CVI Investments, Inc. has abundant global investment experience and is an investor
with a policy of nurturing investment destinations while building good relationships with them.
1. Outline
4th series of convertible bonds with stock acquisition rights(1)

Closing dateJuly 14, 2022

（Issuance date）(2) Number of issuances

40 units

Total amount ofConvertible bond: JPY 500,000,000

Issuances of the(JPY 100 per face value of JPY 100 of each convertible bond)(3) convertible bond andstock acquisition

Stock acquisition rights: No payment is required in exchange forthe stock acquisition rights.

rights1,718,213 shares
The maximum conversion price will be substantially JPY 291 due(4)Number of dilutive

to conditions for price adjustment

shares due to the

The above number of dilutive shares is the maximum number ofissuance

shares to be delivered when converted at the initial conversion
price.

The minimum conversion price is JPY 132, but the

number of dilutive shares at the minimum conversion price is3,787,878 shares.
(5) Amount
Exercise price and(6)

JPY 500,000,000
Initial conversion price JPY 291

terms and conditions
for price adjustment

6 months after the closing date, and semiannually thereafter, theconversion price will be adjusted to the lesser of either; (i) 90%
1

(fractions less than one will be rounded up) of the then prevailingmarket price, the average (fractions less than one will be roundedup) of the two lowest volume weighted average prices for thecommon shares during the 15 trading day period immediately
preceding the applicable date or (ii) the prevailing conversion
price on the CB adjustment date if the conversion price is JPY 1
or more below the effective conversion price. However, if theadjusted conversion price on the CB adjustment date falls below
the minimum conversion price, the conversion price will be theminimum.
Subscription for

By the method of third-party allocation(7) shares and issuing
method(8) Allottee(9)

CVI Investments, Inc.

Coupon rate andAnnual rate: 0.625%

maturity date

Maturity date: August 6, 2026

(10) Redemption price

JPY 100 per face value of JPY 100
The following contents will be stipulated in this purchaseagreement.
(1) The issuance of the convertible bonds with stock acquisitionrights, which are scheduled to be allotted to the abovementioned allottee, is subject to the following conditions.
i.

The Rep and Warranty of KWB in this purchaseagreement is accurate in important respects and
KWB complies with important pledges.

ii.

No injunction, etc. has been issued for the issuanceof the convertible bonds with stock acquisitionrights and the stock acquisition rights.

iii.

KWB’s shares have not been delisted.

iv.

No significant adverse effects have occurred on
KWB.

(11)

Othersv.

KWB has not communicated important undisclosed
facts about the Company to the allottee.

(2) As long as the conditions stipulated in iii to v above aresatisfied and the converted conversion price exceeds theminimum conversion price on each CB adjustment date, theallottee shall convert the portion of the convertible bonds
equivalent to one-eighth of the total amount of theconvertible bonds or the total amount of remaining
convertible bonds, whichever is lower, into KWB’s common
stock. However, the allottee may postpone all or part of such
conversion to the next and subsequent CB adjustment dates
by written notice by the business day prior to the CB
adjustment date. As long as the conditions stipulated in iii
to v above are satisfied and the converted conversion priceexceeds the minimum conversion price on the final CB
adjustment date, the allottee shall convert the deferred2target portion and the total amount of the remaining
convertible bonds into KWB’s common stock, in which caseno deferral will be made. (However, the conversion on the
final CB adjustment date will be carried out within the range
where the voting rights ratio of the allottee does not exceed
9.9%.)(3) If the converted conversion price is lower or equal to theminimum conversion price on each CB adjustment date,
KWB shall divide the target portion by 0.9 for every JPY 100
of each convertible bond and the total amount of accrued
interest. However, the allottee may postpone all or part ofsuch conversion to the next and subsequent CB adjustment
dates by written notice by the business day prior to the CB
adjustment date.
(4) If KWB conducts the transaction in the purchase agreement(disposition of all or substantially all of KWB’s assets, etc.)
and the allottee requests redemption, or the reasonsspecified in the purchase agreement (delisting of sharesissued by KWB, etc.) are occurred, redemption of all of theremaining convertible bonds with stock acquisition rights
shall be made at the higher, JPY 100 per JPY 100 of eachconvertible bond and 125% of the total amount of accrued
interest, or the market value calculated by the method
specified in the purchase agreement.
(5) The transfer of the convertible bonds with stock acquisitionrights requires the approval of the Board of Directors of
KWB. (However, transfer to Bank of America, J.P. Morgan
and Goldman Sachs & Co. and their affiliates are excluded
from the viewpoint of reducing management costs of theallottee.) Even if the transfer is made, the rights andobligations of the allottee will be carried over to thetransferee.
15th series of stock acquisition rights(1) Day of allotment

July 14, 2022

Number of shares

13,746 shares（２） subject to stockacquisition rights(3)

Issue amount for stock

JPY 141 per stock acquisition rightacquisition rights
Number of dilutive(4) shares due to theissuance
Amount (Value of

1,374,600 shares（100 shares per unit of the stock acquisitionrights）
The exercise price of the stock acquisition rights is not adjusted
and therefore there is no maximum or minimum exercise price.
JPY 400,008,600*(5) property to becontributed when3

exercising the stockacquisition rights)(6) Exercise price

JPY 291(7) Exercise period

From July 15, 2022 to July 15, 2027

Subscription for

By the method of third-party allocation(8) shares and issuing
method(9) Allottee

CVI Investments, Inc.
The following contents will be stipulated in this purchaseagreement.
(1) The issuance of the convertible bonds with stock acquisitionrights, which are scheduled to be allotted to the abovementioned allottee, is subject to the following conditions.
vi.

The Rep and Warranty of KWB in this purchaseagreement is accurate in important respects and
KWB complies with important pledges.

vii.

No injunction, etc. has been issued for the issuanceof the convertible bonds with stock acquisitionrights and the stock acquisition rights.

(10)

Others

viii.

KWB’s shares have not been delisted.

ix.

No significant adverse effects have occurred on
KWB.

x.

KWB has not communicated important undisclosed
facts about the Company to the allottee.

(2) The transfer of the convertible bonds with stock acquisitionrights requires the approval of the Board of Directors of KWB.
(However, transfer to Bank of America, J.P. Morgan andGoldman Sachs & Co. and their affiliates are excluded fromthe viewpoint of reducing management costs of the allottee.)
Even if the transfer is made, the rights and obligations of theallottee will be carried over to the transferee.
*Note: The total amount is assumed that all of the stock acquisition rights have been exercised at
the initial exercise price. If the exercise price is modified or adjusted, the amount will be reduced.
If the stock acquisition rights are not exercised during the exercise period, or if our stockacquisition rights are canceled, the amount will decrease.
2. Purpose of the financing
KWB has been pursuing cell therapy (regenerative medicine) business (f/k/a new biotech business,regenerative medicine/ cell therapy), biosimilar business and new biologics business and isengaged in research and development activities to provide new medical treatments to all
generations.
In general, though drug discovery bio-ventures have a weak financial base because investment inresearch and development precedes, KWB focuses on growth strategies after the establishment ofa stable revenue base from biosimilar products (generic bio-drugs) that are expected to be highly
profitable.

4

Biomedicines are a general term for drugs made by utilizing advanced biotechnology such as generecombination and cell fusion, and biosimilar refers to a drug whose effect, efficacy and safety are
guaranteed by the government as the biomedicine (original product). As a result of sales revenue
from the biosimilar business and the development activities for the purpose of strengthening theabove-mentioned financial base, the filgrastim biosimilar (project code: GBS-001, partner: Fuji
Pharma Co., Ltd.), the darbepoetin alfa biosimilar (project code: GBS-011, partner: Sanwa Kagaku
Kenkyusho Co., Ltd.) and Ranibizumab biosimilar (project code: GBS-007, partner: Senju
Pharmaceutical Co., Ltd.) were successfully launched. According to the financial forecast for the
fiscal year ending March 2023 announced on May 12, 2022, the gross sales of 2,900 million yen (theprevious year's result was 1,569 million yen), which mainly consists of the sales related to thebiosimilar business, is expected as record-high sales. With the stability of reliable profits from thelaunched biosimilar products and accumulated know-how and technology for the development of
biomedicines, KWB is pursuing creation of a business model that has both stability and growthpotential by developing new medical treatments, which is the original purpose of drug discovery
bio-ventures.
Currently, sales of launched biosimilar products are steadily increasing, as stated in the abovementioned financial forecast for the fiscal year ending March 2023. Since Japanese governmenthas been promoting a policy to popularize generic drugs for the purpose of reducing medical costs.
As biosimilars are more reasonable than original biomedicines like other generic drugs, the use ofbiosimilars by patients to ease their financial burden is increasing. Particularly GBS-007, which
launched in the market in December 2021, is in higher demand, and it is expected that the numberof patients using it will continue to increase. As stated in the financial results for the fiscal year
ended March 2022 (Japanese Standards, Consolidated) dated May 12, 2022, KWB’s financial
results for the fiscal year ended March 2022 recorded sales of 1,569 million yen from mainly thebiosimilar products. However, while steadily expanding revenue scale, it continues to invest in R
& D activities, so net income attributable to owners of the parent company is -535 million yen andoperating cash flow is -1,169 million yen, which is to continue a deficit. In addition to the total
cash and deposit balance of 1,187 million yen, with the simple accumulation of gross profit for the
fiscal year ending March 20, 2023, it was possible to cover selling, general and administrative
expenses including R & D expenses.

However, it has become definite that the financing isnecessary to consider the unexpectedly increased orders for GBS-007 from the beginning of the
fiscal year ending March 2023 and medium- to long-term facility expansion related to
manufacturing GBS-007. Under these circumstances, orders of GBS-007 have been exceeding the
expectation. To keep a stable supply of GBS-007 to patients and medical institutions, it is necessary
to expand the manufacturing capacity to enable stable manufacturing and supply over the mediumto long-term. For the growing demand for GBS-007, the financing will be used for manufacturing
capacity expansion such as the expansion of the manufacturing process of drug substancemanufacturing, inspection, testing to maintain the quality of GBS-007, and reinforcement of othersystems.
Furthermore, as the Mid-Term Strategic Plan KWB 2.0 announced on May 12, 2022, KWB will
accelerate strategic investments in the cell therapy (regenerative medicine) business as KWB’s
important growth driver to achieve the early improvement of future corporate value. There arestill many diseases for which there are no effective treatments or radical treatments, and various
factors can be considered. For such diseases, a completely different approach from existingtreatment methods is required, and pharmaceutical companies engaged in drug development are5constantly working on researching diseases and creating new technologies. In the Mid-Term
Strategic Plan KWB 2.0, KWB is promoting multiple collaborations with academia andcompanies mainly in the field of cell therapy, and for the commercialization, KWB is aiming forcollaborative development with various partner companies with a combination of technologies
and clinical trials to accelerate the establishment of the organizational system. To implement a
growth strategy to create such new medical treatments, knowledge, technology, and developmentknow-how related to biomedicine are essential. At the same time, a business model thatgenerates stable cash flow for supporting continuous R & D investment is necessary. Indeed,
our biosimilar business plays a role in supporting our business with accumulated biotechnology
and a stable revenue base.
3. Features of the financing
As stated in the purpose of the financing above, the financing aims to accelerate the improvementof manufacturing efficiency for a long-term stable supply of GBS-007 and profitability. To achieve
the above goals, KWB negotiated with an emphasis on two points: satisfying our current financial
needs and minimizing the stock value dilution.

As a result, KWB has agreed to adopt thisfinancing method because it is an integrated financing scheme that combines convertible bonds
with stock acquisition rights and various conditions related to stock acquisition rights.
We have determined that the convertible bonds with stock acquisition rights is appropriate as astructure that meets the current financial needs of KWB because funds can be secured at the timeof issuance.

The initial conversion and exercise price of the convertible bonds with stockacquisition rights and stock acquisition rights are set at 110% of the closing price of the day before
issuance. Compared to the general conditions for conversion and exercise price of the closing priceon the business day before the issue date, this financing scheme is considered to minimize dilutionof the stock value and meets KWB’s financial needs. In addition, although the convertible bonds
with stock acquisition rights have a downward adjustment provision, the exercise price of stockacquisition rights is fixed. It means to keep the planned total amount of financing and minimize
the dilution of the stock value as much as possible. On the other hand, though the convertible
bonds with stock acquisition rights bear interest, an interest rate is 0.625% instead of 0% which is
generally set in the financing of bio-ventures like KWB. Although the interest payment will be afinancial burden on KWB, as mentioned above, this financing is an integrated financing schemethat combines various conditions and is structured in consideration for diluting the stock value.
Although interest is accrued, with 110% of the initial conversion and exercise price and fixed
exercise price of the stock acquisition rights, in case of stagnation of KWB’s stock price, theconversion is partially limited and the whole of the exercise opportunity would be structurally
limited. Regardless of this advantage from the allottee's perspective, the allottee judged that thelaunch of GBS-007 has entered the stage of expanding the contribution to profits from thebiosimilar business, and expectations for future improvements in stock prices and corporate value
have increased.
As mentioned above, the stock acquisition rights will be set at 110% of the closing price on thebusiness day prior to the issue date and will be fixed without any adjustment of the exercise price.
In this financing, a certain amount will be procured by issuing the convertible bonds with stockacquisition rights to meet KWB’s needs, and the remaining required amount will be procured byexercising the stock acquisition rights.

As the stock acquisition rights, whose exercise price isfixed at 110%, are fixed at a price higher than the current stock price level, it is necessary to raise6the stock price to exercise the stock acquisition rights. Therefore, KWB must first accumulate
sales results through a stable supply of GBS-007 based on the financing by the issuance of theconvertible bonds with stock acquisition rights, and obtain valuations from the market, leading toa rise in stock prices and increasing the probability that the allottee will exercise them.
With solid sales performance of GBS-007 and further development of cell therapy business with
SHED (Stem cells from Human Exfoliated Deciduous Teeth) mentioned in the Mid-Term Strategic
Plan KWB 2.0, KWB believes that this financing scheme is appropriate. On the other hand, since
the exercise price doesn’t adjust the amount upward even if the stock price moves above the exercise
price, the funds to be raised will not increase accordingly and it is difficult for the allottee toincentivize to sell shares in a short period regardless of the situation of the stock price. For a bioventure like KWB that still lacks liquidity, KWB believes that this will ultimately limit the impact
on stock prices and increase the accuracy of the procurement of necessary funds. Rather than
exercising and selling based on daily stock price changes, KWB believes that unnecessary new
stock issuance can be avoided because this financing scheme can be expected to be exercised by
future sales results of GBS-007 and stock price changes. From the perspective of shareholder
value, based on the disclosure of GBS-007 sales results, the allottee’s understanding of KWB
strategies and the stance of investment in expectation for KWB’s medium- to long-term businessgrowth, unlike MS warrants, which tend to be exercised mechanically and immediately sold after
exercise, KWB believes that this financing scheme based on evaluation of business feasibility
minimizes the impact on the stock price after disclosure and contributes to a virtuous cycle forfurther progress of KWB’s pipelines.
As for the 3rd series of convertible bonds with stock acquisition rights (convertible price is JPY 415
as of June 22, 2022) and 10th series of stock acquisition rights (exercise price is JPY 410 as of June22, 2022), concerning the level of KWB’s stock price (closing price of KWB’s common stock in regulartrade on June 22, 2022: JPY 264), the exercise or conversion of these shares has not proceeded, but
as a result of discussion with the allottee, these existing shares will remain. For these existing
securities, if the initial conversion price of the convertible bonds with stock acquisition rights andthe initial exercise price of the stock acquisition rights are less than the conversion price of the 3rdseries convertible bonds with stock acquisition rights and the exercise price of the 10th series of stockacquisition rights, the conversion price and exercise price thereof shall be adjusted to the sameamount as the initial conversion price of the convertible bonds with stock acquisition rights and theinitial exercise price of the stock acquisition rights under the application of the adjustment.
CVI Investments, Inc., to which this financing will be allocated, has invested in several bio-related
businesses overseas, and it is known as an overseas institutional investor who is familiar with thebio-field.
In addition, since CVI Investments, Inc. has supported KWB several times, they fully understandthe current situation and business strategic policy of KWB and agreed to continue to support KWB
in terms of finance over the medium to long term. CVI Investments has fully understood theimportance of the biosimilar business, which supports a stable financial base, in implementing our
growth strategy in the future.

Not only this financing, but KWB also believes that CVI

Investments can be a candidate when considering financing that maximizes shareholder value to
implement KWB’s growth strategies.

74. Specific use of financing
The specific uses and payment schedule of the above estimated deduction amount of million
yen are as follows.
AmountName financing

Purpose of use(millionyen)

4th series of・Equipment expansion costs related to theconvertible bonds

manufacturing and sales system for thewith stock

purpose of long-term stable supply of GBS-

acquisition rights

007
manufacturing and sales system for theacquisition rights

purpose of long-term stable supply of GBS-

schedule
From July

492

2022 to March2023

・Equipment expansion costs related to the15th series of stock

Payment

From April
396

2023 to March
2027

007
(Note) 1. KWB will appropriately manage cash management up to the time of expenditure in ourdeposit account.
2. Since the exercise of the stock acquisition rights depends on the holder, it may not be
possible to raise funds. In that case, own funds will apply.
The impact on the business results for the fiscal year ending March 2023 is expected to be minimal.
If there is an impact on business performance due to the use of the funds raised, KWB will disclose it
in a timely and appropriate manner.
About Kidswell Bio Corporation (KWB)
Kidswell Bio Corporation will challenge pediatric disease as a new field, in addition to intractable
and rare diseases on which KWB has also been focusing for R&D. We would like to contribute tochildren who have hopes and dreams for their bright future.

Furthermore, with our biotech

expertise and children’s potential vital force such as SHED, stem cell from exfoliated deciduous teeth,
we envision creating new pharmaceuticals and therapeutics for all people under “Kids Well, All Well.”Contact:
Kidswell Bio Corporation
Tel: +81-3-6222-9547 Mail: info@kidswellbio.com

8