Sinovac Determines Trigger Event Occurred Under Rights Agreement - Seite 2

On December 19, 2018, the High Court of Justice of Antigua and Barbuda held that the Company’s Rights Agreement is valid under Antigua law, and found that “there was a secret plan to take control of the Company” at the AGM. The Antigua High Court decision, dated December 19, 2018, which has been appealed by 1Globe Capital, LLC, is publicly available as part of claim ANUHCV 2018/0120 in the Eastern Caribbean Supreme Court in the High Court of Justice of Antigua and Barbuda and is available on the Company’s website (http://www.sinovac.com/file/20181219.Judgment.pdf).

On February 18, 2019, after reviewing the Court’s judgment and considering all additional facts known to the Board, the Board determined that the Collaborating Shareholders became Acquiring Persons on or prior to the AGM and that their conduct resulted in a Trigger Event. As a result, Rights held by the Collaborating Shareholders are void and thus ineligible for exchange.

Pursuant to the Rights Agreement, the Board implemented the Exchange. As a result, each holder of eligible Rights will have the right to receive one Exchange Share in exchange for each Right. The total Exchange Shares to be received by any holder will be rounded up to the nearest whole Common Share and rounded down to the nearest whole Series B Preferred Share. As of the close of trading in the United States on February 22, 2019, the Rights converted into the right to receive the Exchange Shares and will no longer trade with the Common Shares, and will not otherwise trade on any securities market.

In order to facilitate the Exchange, today the Company issued 27,777,341 Common Shares and 14,630,813 Series B Preferred Shares into a trust for the benefit of the holders of the valid Rights. In order to receive the Exchange Shares, holders of valid Rights must follow the instructions set forth under “Process for Completing Exchange of Rights” below. The trust agreement provides that shares cannot be released from the trust prior to March 8, 2019.

The Series B Preferred Shares issued today share equally in all dividends and distributions made on the Common Shares and vote together with the Common Shares on all matters brought before the shareholders, in each case on an as-converted basis and subject to applicable law. The Series B Preferred Shares are convertible into Common Shares at the option of the Company, or automatically upon a successful shareholder vote to increase the authorized number of Common Shares of the Company. The Company intends to seek authorization to increase the authorized number of Common Shares of the Company at the next annual general meeting. Until the Series B Preferred Shares are converted into Common Shares (or until the Series B Preferred Shares are listed on a nationally recognized securities exchange), they will earn a preferred dividend equal to $0.41 per annum, payable quarterly in arrears.