1Globe Biomedical Co Ltd

BEIJING--( BUSINESS WIRE )--Sinovac Biotech Ltd. (NASDAQ: SVA) (“SINOVAC” or the “Company”), a leading provider of biopharmaceutical products in China, announced today its unaudited financial results for the six months ended June 30, 2024. First Half of 2024 Financial Summary Sales for the six months ended June 30, 2024 were $121.3 million, compared to $140.4 million in the prior year period. The Company posted $10.9 million of net loss attributable to common shareholders, or a loss of $0.11 per basic and diluted share, in the six-month period ended June 30, 2024, compared to net income attributable to common shareholders of $14.0 million, or $0.14 per basic and $0.15 per diluted share, in the prior year period. Mr. Weidong Yin, Chairman, President and CEO of SINOVAC, commented, “In the first half of the year, SINOVAC focused on executing its regular vaccine business strategies. Although the COVID-19 pandemic is over, there are still challenges from various infectious diseases. SINOVAC provided vaccines in time during the epidemic of hepatitis A and influenza in Brazil, Chile and other countries to minimize the shortage of vaccine supplies, continuing our vital role similar to it in the COVID-19 pandemic period. Furthermore, it is great to see other progress in the international market where SINOVAC’s local joint venture won long-term public tenders in Türkiye.” Business Updates Hepatitis A Vaccine – Healive ® , the first and only WHO prequalified inactivated hepatitis A vaccine from China, is currently supplied both domestically and internationally. Healive ® ’s performance in international market substantially grew in the first half of 2024. Influenza Vaccine – SINOVAC has two influenza vaccine production plants. The plants, which comply with Chinese Good Manufacturing Practice (or “GMP”) guidelines and utilize environmental-friendly production process, enable automated production at commercial scale so that SINOVAC has more capacity to meet the growing global demand for high-quality influenza vaccines. SINOVAC’s influenza vaccines kept expanding its international market presence in 2024 by obtaining more overseas market approvals, won public tenders in Pakistan and were supplied to Chile for the flu emergency. A study conducted last year in the Philippines and Chile demonstrated that the immunogenicity induced by SINOVAC’s quadrivalent influenza vaccine was non-inferior and the geometric mean titers (or “GMT”) were even higher in individuals aged 3 years and older, when compared with the control vaccine which was widely used. The research result was published in Vaccines in 2024. Furthermore, SINOVAC completed phase III clinical trials of quadrivalent influenza in infants and toddlers aged 6-35 months in the first half of 2024. Varicella Vaccine – SINOVAC’s live attenuated varicella vaccine, the first WHO prequalified (or “PQ”) Chinese varicella vaccine, was successfully supplied to more countries this year. SINOVAC's varicella vaccine, which had been previously approved for children aged 12 months to 12 years old, was approved by China NMPA for use in adolescents and adults aged 13 years old and above in June 2024. SINOVAC’s varicella vaccine obtained its first international GMP certificate in the Philippines in January 2024. Hand Foot and Mouth Disease Vaccine – SINOVAC’s Enterovirus 71 (or “EV71”) Vaccine, Inlive ® , has already safeguarded millions of children in China. In 2023, SINOVAC initiated phase I and II clinical trials of its bivalent enterovirus inactivated vaccine, which aims to protect against hand, foot and mouth disease (or “HFMD”) caused by EV71 and coxsackievirus 16 (or “CA16”). CA16 is the dominant strain and is widespread in China and other Asian regions. At present, the enrollment of all the participants of this study has been completed. Enterovirus Type 71 Vaccine (Vero cell), Inactivated - Inlive ® ’ project participated by SINOVAC won second prize of the PRC National Science and Technology Progress Award 2023. In 2024, SINOVAC's EV71 vaccine was approved for use in Macao, China. Poliomyelitis Vaccine (Vero Cell), Inactivated, Sabin Strains – SINOVAC's Poliomyelitis Vaccine (Vero Cell), Inactivated, Sabin Strains (0.5ml/vial) (or "sIPV") received WHO PQ on June 2, 2022. Poliomyelitis Vaccine (Vero Cell), Inactivated, Sabin Strains (Five-Dose) (2.5ml/vial) (or "msIPV") was authorized in April 2024 by the China NMPA for market use. Since msIPV is mainly for UNICEF and PAHO procurement, SINOVAC is currently applying msIPV for WHO PQ approval so supply msIPV to the above international organizations can be achieved at the earliest date. Reassortant Rotavirus Vaccine – SINOVAC has initiated phase I clinical trials of its Reassortant Rotavirus Vaccine, Live, Oral, Hexavalent (Vero Cell). The vaccine covers six rotavirus serotypes, G1, G2, G3, G4, G9, and P1A. It is one of the rotavirus vaccines with a broad-spectrum protection currently marketed or under development in the world. By the first half of 2024, this phase I clinical trial has finished enrollment and vaccination of adults and children participants, and enrollment of infants participants is ongoing and expected to be finished in the third quarter of 2024. Adsorbed Tetanus Vaccine – The results of phase I/III clinical study of the adsorbed tetanus vaccine developed by SINOVAC were favorable. The antibody conversion rate of volunteers in the phase III clinical trial reached 99.48% in 30 days after vaccination, which reached the non-inferiority standard; the geometric mean concentration (or “GMC”) of antibodies reached statistical superiority. Commercial Developments – SINOVAC made significant progress in commercial development in the first half of 2024. In Türkiye, the first overseas joint venture company invested by SINOVAC won two long-term public tenders for the hepatitis A vaccine and varicella vaccine. SINOVAC's extensive expertise and experience in vaccine R&D and production, as well as its successful track record in establishing vaccine facilities, will play a pivotal role in the joint venture. Unaudited Financial Results for the First Half of 2024 Sales for the first half of 2024 were $121.3 million compared to $140.4 million in the prior year period. Although Healive ® ’s sales for the first half of 2024 increased due to international market growth, however, as newborn rates in China continue to decline, sales of EV71 vaccines, which are primarily used in young children, have been impacted, resulting in a decrease in the Company’s revenue in the first half of 2024. Selling, general and administrative expenses in the first half of 2024 were $206.3 million, compared to $231.0 million in the prior year period. The decrease was mainly due to lower employee incentive expenses associated with a COVID-19 employee incentive plan established in 2022. R&D expenses in the first half of 2024 were $144.1 million, compared to $151.1 million in the prior year period. Net loss in the first half of 2024 was $68.6 million, compared to a net loss of $30.0 million in the prior year period. Net loss attributable to common shareholders was $10.9 million, or a loss of $0.11 per basic and diluted share, in the first half of 2024, compared to a net income attributable to common shareholders of $14.0 million, or $0.14 per basic and $0.15 per diluted share, in the prior year period. As the Company announced on February 22, 2019, the Company’s board of directors determined that certain shareholders became acquiring persons, as defined in the Company’s rights agreement (“Rights Agreement”), under which a trigger event occurred. As a result, the Company issued new common and preferred shares of SINOVAC. Without the effect of implementing the Rights Agreement and newly-issued common and preferred shares, basic and diluted loss per share for the first half of 2024 would be $0.11. Non-GAAP adjusted EBITDA was $204.2 million loss in the first half of 2024, compared to $346.6 million loss in the prior year period. Non-GAAP net loss was $82.3 million in the first half of 2024, compared to $120.9 million net loss in the prior year period. Non-GAAP diluted loss per share in the first half of 2024 was $0.16 compared to a loss of $0.32 per share in the prior year period. Non-GAAP diluted loss per share in the first half of 2024, excluding the implementation of the Rights Agreement and the newly-issued common and preferred shares, would be $0.22. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this news release. As of June 30, 2024, cash and cash equivalents and restricted cash totaled $1.1 billion, compared to $1.3 billion as of December 31, 2023. In the first half of 2024, net cash used in operating activities was $438.9 million, net cash provided by investing activities was $436.8 million reflecting the net position of short-term investment redemptions over purchases, and net cash used in financing activities was $171.2 million. The Company’s first half of 2024 financial statements are prepared and presented in accordance with U.S. GAAP. However, they have not been audited or reviewed by the Company’s independent registered accounting firm. Legal Proceedings As previously disclosed by the Company, on March 13, 2018, 1Globe Capital LLC (“1Globe”) filed a complaint against the Company in the Antigua Court. The trial of the matter took place from December 3 to 5, 2018. On December 19, 2018, the Antigua judge handed down his judgment (the “Antigua Judgment”), finding the Company fully in favor, dismissing 1Globe’s claim and declaring the Rights Agreement was validly adopted as a matter of Antigua law. On January 29, 2019, 1Globe filed a Notice of Appeal against the Antigua Judgment. On March 4, 2019, 1Globe filed an application for urgent interim relief, seeking an injunction to prevent the Company from continuing to implement its Rights Agreement until the resolution of the appeal. This application was heard on April 4, 2019, at which the Court of Appeal issued an order restraining the Company from operating the Rights Agreement in any way that affects 1Globe’s rights or shareholding or otherwise distributing the exchange shares (the “Exchange Shares”) to the Company’s shareholders who did not trigger the Rights Plan until after the determination of the appeal (the “Exchange Shares”). 1Globe’s appeal against the Antigua Judgment was heard on September 18, 2019, and the appeal decision was announced by the Eastern Caribbean Supreme Court, Court of Appeal (the “Court of Appeal”) on December 9, 2021, upholding the Antigua Judgment in each point. 1Globe applied for leave to appeal to the Judicial Committee of the Privy Council (the “Privy Council”), and the hearing of the application was held on February 24, 2022, in which the Court of Appeal granted 1Globe leave to appeal to the Privy Council on certain grounds, although not including the challenge to the validity of the Rights Agreement. On April 19, 2022, 1Globe renewed its application directly to the Privy Council for leave to appeal on its ground of appeal concerning the validity of the Rights Agreement. The final substantive hearing before the Privy Council took place on July 10 to 11, 2024. The Privy Council refused 1Globe permission to appeal on certain arguments in relation to the validity of the Rights Agreement, and reserved its judgment for other arguments on that ground of appeal, and in relation to whether to grant 1Globe relief in relation to the outcome of the AGM vote. The judgment will be delivered in writing at a later date. The appeal outcome is therefore pending. As previously disclosed, on March 5, 2018, the Company filed a lawsuit in the Court of Chancery of the State of Delaware, seeking a determination on whether 1Globe, the Chiang Li Family, OrbiMed Advisors, LLC and certain other shareholders of the Company had triggered the Rights Agreement. On April 12, 2018, 1Globe filed an amended answer to the Company’s complaint, counterclaims and a third-party complaint against the Company and Mr. Weidong Yin, alleging, among other allegations, that the Rights Agreement is not valid. On March 6, 2019, the Delaware Chancery Court entered a status quo order, providing that the Company not distribute any of the Exchange Shares to the Company’s shareholders who did not trigger the Rights Plan until the final disposition of the pending Delaware litigation or further order of the Court. On April 8, 2019, the Delaware Chancery Court stayed the Delaware litigation pending the final outcome of 1Globe’s appeal of the Antigua Judgment. Separately, Heng Ren Investments LP (“Heng Ren”) filed suits against SINOVAC and Weidong Yin on May 31, 2019 in Massachusetts state court for the alleged breach of fiduciary duties and wrongful equity dilution. SINOVAC moved the matter from the state court to the United States District Court for the District of Massachusetts. Heng Ren alleged that Mr. Yin breached fiduciary duties owed to minority shareholders, that SINOVAC aided and abetted breaches of fiduciary duties and that both SINOVAC and Mr. Yin engaged in wrongful equity dilution. Heng Ren requested damages, attorney fees, and prejudgment interest. In July 2021, SINOVAC moved to dismiss Heng Ren’s amended complaint in the federal court in Massachusetts. On March 4, 2022, the court granted the motion as to the breach of fiduciary duty claims and denied the motion as to the wrongful equity dilution claim and denied reconsideration of its decision on the motion. On June 13, 2024, the parties stipulated to a discontinuance of the action with prejudice. SINOVAC did not incur any material expense in connection with the action. On September 6, 2023, MW Gestion, an institutional asset manager based in France, filed a class action complaint on behalf of all SINOVAC shareholders against SINOVAC; Weidong Yin; and other managers and directors of SINOVAC, including Nan Wang, Simon Anderson, Yuk Lam Lo, Kenneth Lee, Meng Mei, and Shan Fu (the “Individual Defendants” and collectively with SINOVAC the “SINOVAC Defendants”); and Wilmington Trust National Association. MW Gestion alleges breach of contract, breach of fiduciary duty, and wrongful dilution claims against the SINOVAC Defendants, as well as aiding and abetting breach of contract and breach of fiduciary duty against the Individual Defendants. MW Gestion’s claims stem from a private investment in public equity transaction on July 2, 2018, and SINOVAC’s implementation of its Rights Agreement on February 22, 2019. SINOVAC and certain other defendants filed a motion to dismiss all claims on November 20, 2023, and the motion was fully briefed as of February 27, 2024. A hearing on the motion to dismiss has been scheduled for September 4, 2024. Status of Exchange Shares and Trading in the Company’s Shares As a result of the pending legal proceedings described above, the Exchange Shares are expected to remain in a trust for the benefit of the Company’s shareholders who did not trigger the Rights Plan until, at least, the conclusion of the appeal against the Antigua Judgment and the final disposition of the Delaware litigation or further order of the Delaware Chancery Court. The Exchange Shares remain issued and outstanding. The Nasdaq Stock Market LLC implemented a halt on trading of the Company’s common shares at the time the Exchange Shares were issued to the trust. The Company is currently unable to estimate when trading will resume, or if Nasdaq will take any additional action in regard to trading of the Company’s common shares. About SINOVAC Sinovac Biotech Ltd. (SINOVAC) is a China-based biopharmaceutical company that focuses on the R&D, manufacturing, and commercialization of vaccines that protect against human infectious diseases. SINOVAC’s product portfolio includes vaccines against COVID-19, enterovirus 71 (EV71) infected hand-foot-mouth disease (HFMD), hepatitis A, varicella, influenza, poliomyelitis, pneumococcal disease, mumps, etc. The COVID-19 vaccine, CoronaVac ® , has been approved for use in more than 60 countries and regions worldwide. The hepatitis A vaccine, Healive ® , passed WHO prequalification requirements in 2017. The EV71 vaccine, Inlive ® , is an innovative vaccine under "Category 1 Preventative Biological Products" and commercialized in China in 2016. In 2022, SINOVAC’s Sabin-strain inactivated polio vaccine (sIPV) and varicella vaccine were prequalified by the WHO. SINOVAC was the first company to be granted approval for its H1N1 influenza vaccine, Panflu.1 ® , which has supplied the Chinese government's vaccination campaign and stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine, Panflu ® , to the Chinese government stockpiling program. SINOVAC continually dedicates itself to new vaccine R&D, with more combination vaccine products in its pipeline, and constantly explores global market opportunities. SINOVAC plans to conduct more extensive and in-depth trade and cooperation with additional countries, and business and industry organizations. For more information, please visit the Company’s website at www.sinovac.com . Safe Harbor Statement This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. In particular, the outcome of any litigation is uncertain, and the Company cannot predict the potential results of the litigation it filed or filed against it by others. Additionally, the triggering of a shareholder rights plan is nearly unprecedented, and the Company cannot predict the impact on the Company or its stock price as a result of the trigger of the rights plan. Non-GAAP Financial Measures To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, SINOVAC uses the following non-GAAP financial measures: non-GAAP adjusted EBITDA, non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share. For more information on these non-GAAP financial measures, please refer to the table captioned “Reconciliations of non-GAAP Measures to the Nearest Comparable GAAP Measures” in this results announcement. SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share help identify underlying trends in its business that could otherwise be distorted by the effect of certain income or expenses that SINOVAC includes in net income and diluted earnings (loss) per share. SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share provide useful information about its core operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Non-GAAP adjusted EBITDA, non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share should not be considered in isolation or construed as an alternative to income from operations, net income (loss), diluted earnings (loss) per share, or any other measure of performance or as an indicator of SINOVAC’s operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. Non-GAAP adjusted EBITDA represents net income (loss) and excludes interest and financing expenses, interest income, net other income (expenses) and income tax benefit (expenses), and certain non-cash expenses, consisting of share-based compensation expenses, amortization and depreciation that SINOVAC does not believe are reflective of the core operating performance during the periods presented. Non-GAAP net income (loss) represents net income (loss) before share-based compensation expenses and foreign exchange gain or loss. Non-GAAP diluted earnings (loss) per share represents non-GAAP net income (loss) attributable to common shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis, including accounting for the effect of the assumed conversion of options. SINOVAC BIOTECH LTD. Consolidated Balance Sheets As of June 30, 2024 and December 31, 2023 (Expressed in thousands of U.S. Dollars) June 30, 2024 December 31, 2023 Current assets Cash and cash equivalents $ 1,072,350 $ 1,270,131 Restricted cash 2,779 5,166 Short-term investments 9,502,185 9,953,042 Accounts receivable - net 370,168 440,019 Inventories 153,524 139,874 Prepaid expenses and deposits 12,724 11,621 Amounts due from related parties 23,847 - Income tax receivable 10,703 10,703 Total current assets 11,148,280 11,830,556 Property, plant and equipment – net 934,614 979,617 Prepaid land lease payments 62,916 65,540 Intangible assets - net 7,844 8,520 Long-term prepaid expenses 24 24 Long-term investments 681,345 684,285 Prepayments for acquisition of equipment 4,338 6,772 Deferred tax assets 32,798 29,790 Right-of-use assets 15,346 45,525 Other non-current assets 9,432 7,345 Total assets 12,896,937 13,657,974 Current liabilities Short-term bank loans and current portion of long-term bank loans 179,349 76,089 Accounts payable and accrued liabilities 641,579 973,949 Income tax payable 28,720 41,258 Deferred revenue 6,173 20,127 Deferred government grants 805 1,586 Dividend payable 119,374 29,089 Lease liability 2,451 5,806 Total current liabilities 978,451 1,147,904 Deferred government grants 5,984 5,865 Long-term bank loans 130,320 177,817 Deferred tax liability 262,174 263,711 Lease liability 12,388 39,271 Other non-current liabilities 429 439 Deferred revenue 195 200 Total long-term liabilities 411,490 487,303 Total liabilities 1,389,941 1,635,207 Commitments and contingencies Equity Preferred stock 15 15 Common stock 100 100 Additional paid-in capital 541,258 541,258 Accumulated other comprehensive loss (539,415) (490,055) Statutory surplus reserves 1,539,584 1,539,584 Accumulated earnings 7,107,644 7,118,516 Total shareholders' equity 8,649,186 8,709,418 Non-controlling interests 2,857,810 3,313,349 Total equity 11,506,996 12,022,767 Total liabilities and equity $ 12,896,937 $ 13,657,974 SINOVAC BIOTECH LTD. Consolidated Statements of Comprehensive Income (Loss) For the six months ended June 30, 2024 and 2023 (Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data) Six months ended June 30 2024 2023 Sales $ 121,339 $ 140,404 Cost of sales 40,836 188,409 Gross profit (loss) 80,503 (48,005) Selling, general and administrative expenses 206,347 231,048 Provision for (recovery of) doubtful accounts (663) 386 Research and development expenses 144,052 151,132 Loss on disposal of property, plant and equipment 5,387 312 Government grants recognized in income (1,044) (92) Total operating expenses 354,079 382,786 Operating income (loss) (273,576) (430,791) Interest and financing expenses (2,175) (264) Interest income 44,060 29,589 Other income, net 166,481 337,856 Loss before income taxes (65,210) (63,610) Income tax benefit (expense) (3,432) 33,597 Net loss (68,642) (30,013) Less: loss attributable to non-controlling interests 60,745 46,931 Net income (loss) attributable to shareholders of Sinovac (7,897) 16,918 Preferred stock dividends (2,975) (2,958) Net income (loss) attributable to common shareholders of Sinovac (10,872) 13,960 Net loss (68,642) (30,013) Other comprehensive income, net of tax of nil Foreign currency translation adjustments (194,758) (448,477) Unrealized gain 69,612 6,917 Comprehensive loss (193,788) (471,573) Less: comprehensive loss attributable to non-controlling interests 136,531 217,305 Comprehensive loss attributable to shareholders of Sinovac (57,257) (254,268) Earnings per share Basic net income per share (0.11) 0.14 Diluted net income per share (0.11) 0.15 Weighted average number of shares of common stock outstanding Basic 99,638,043 99,576,600 Diluted 99,638,043 114,227,276 SINOVAC BIOTECH LTD. Consolidated Statements of Cash Flows For the six months ended June 30, 2024 and 2023 (Expressed in thousands of U.S. Dollars) Six months ended June 30 2024 2023 Operating activities Net loss $ (68,642) $ (30,013) Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes (3,718) (32,124) Inventory provision 8,340 12,624 Provision for (recovery of) doubtful accounts (663) 386 Loss on disposal of property, plant and equipment 5,387 312 Depreciation of property, plant and equipment 67,747 82,484 Amortization of prepaid land lease payments 1,093 1,138 Amortization of intangible assets 501 527 Government grants recognized in income (1,044) (92) Loss from equity method investments 7,640 374 Investment income (135,971) (75,612) Changes in: Accounts receivable 62,928 90,434 Amounts due from related parties (23,847) - Inventories (25,311) (23,296) Other non-current assets (2,273) 2,785 Income tax payable (11,676) (5,824) Prepaid expenses and deposits (3,272) 1,583 Deferred revenue (13,595) (2,074) Accounts payables and accrued liabilities (302,521) (47,208) Deferred governments - (16,813) Other non-current liabilities - 418 Net cash used in operating activities (438,897) (39,991) Financing activities Proceeds from bank loans 136,207 209,587 Repayments of bank loans (74,153) (150) Proceeds from issuance of common stock, net of share issuance costs - 676 Dividend paid to non-controlling shareholders (233,375) (1,616) Proceeds from subsidiary's financing Government grants received 141 8,668 Repayments of loan from a non-controlling shareholder - (1) Net cash provided by (used in) financing activities (171,180) 217,164 Investing activities Purchase of short-term investments (3,427,917) (6,628,110) Proceeds from redemption of short-term investments 3,925,995 4,013,372 Proceeds from disposal of equipment 107 37 Prepaid land lease payments - - Acquisition of property, plant and equipment (57,115) (92,942) Acquisition of intangible assets (18) - Purchase of long-term investments (4,224) (24,792) Distributions of equity method investees - 1,342 Proceeds from sale or maturity of long-term investments - 146 Net cash provided by (used in) investing activities 436,828 (2,730,947) Effect of exchange rate changes on cash and cash equivalents and restricted cash (26,919) (85,843) Decrease in cash and cash equivalents and restricted cash (200,168) (2,639,617) Cash and cash equivalents and restricted cash, beginning of period 1,275,297 4,286,377 Cash and cash equivalents and restricted cash, end of period 1,075,129 1,646,760 SINOVAC BIOTECH LTD. Reconciliations of Non-GAAP measures to the nearest comparable GAAP measures For the six months ended June 30, 2024 and 2023 (Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data) Six months ended June 30 2024 2023 (Unaudited) (Unaudited) Net loss $ (68,642) $ (30,013) Adjustments: Depreciation and amortization 69,341 84,149 Interest income, net of interest and financing expenses (41,885) (29,325) Other income, net (166,481) (337,856) Income tax expense (benefit) 3,432 (33,597) Non-GAAP adjusted EBITDA (204,235) (346,642) Net loss (68,642) (30,013) Add: Foreign exchange gain (13,695) (90,851) Non-GAAP net loss (82,337) (120,864) Net income (loss) attributable to common shareholders of Sinovac (10,872) 13,960 Add: Preferred stock dividends 2,975 2,958 Net income (loss) attributable to common shareholders of Sinovac for computing diluted earnings per share (7,897) 16,918 Add: Non-GAAP adjustments to net income (8,191) (53,349) Non-GAAP net income (loss) attributable to common shareholders of Sinovac for computing non-GAAP diluted earnings per share (16,088) (36,431) Weighted average number of shares on a diluted basis 99,638,043 114,227,276 Diluted earnings (loss) per share (0.08) 0.15 Add: Non-GAAP adjustments to net income per share (0.08) (0.47) Non-GAAP diluted loss per share (0.16) (0.32)

BEIJING--(BUSINESS WIRE)-- Sinovac Biotech Ltd. (NASDAQ: SVA) (“SINOVAC” or the “Company”), a leading provider of biopharmaceutical products in China, has filed its 2023 annual report on Form 20-F with the U.S. Securities and Exchange Commission for the year ended December 31, 2023. The annual report can be accessed on the Company's investor relations website at . The Company also reported its unaudited financial results for the second half and audited financial for the full year ended December 31, 2023. Second Half and Full Year 2023 Financial Summary Sales for the six months ended December 31, 2023 were $307.9 million, compared to $280.5 million in the prior year period. Sales in 2023 were $448.3 million, compared to $1.5 billion in the prior year. The Company posted $119.9 million of net loss attributable to common shareholders, or a loss of $1.20 per basic and diluted share, in the six months ended December 31, 2023, compared to net loss attributable to common shareholders of $373.7 million, or a loss of $3.76 per basic and diluted share, in the prior year period. The Company posted $105.9 million of net loss attributable to common shareholders, or a loss of $1.06 per basic and diluted share in 2023, compared to net income attributable to common shareholders of $107.9 million, or $1.08 per basic and $1.00 per diluted share, in the prior year period. Mr. Weidong Yin, Chairman, President and CEO of SINOVAC, commented “In 2023, SINOVAC has gradually adjusted from the state of mass supply of COVID-19 vaccine against pandemic back to normal operational status. I am pleased to see that the top line of our regular products still maintained growth in the year of 2023. After experiencing three years of the COVID-19 pandemic, the world is still facing the threat of various infectious diseases in 2023. As a leading biopharmaceutical products provider in China, SINOVAC continues to invest additional resources in R&D and production of vaccines, and keeps exploring additional opportunities in a broader biopharmaceutical industry. It is great to see every progress of our pipeline products, such as the recent approval of 5-dose sIPV from National Medical Products Administration (NMPA) and the approval of clinical trial for reassortant hexavalent rotavirus vaccine. Meanwhile, we are maintaining a strong international presence by providing high quality vaccines and localized production outside of China.” Business Updates Hepatitis A Vaccine – Healive®, the first and only WHO prequalified inactivated hepatitis A vaccine from China, is currently supplied both domestically and internationally. Healive®’s performance in public tender market in China was further improved in 2023. Influenza Vaccine – A new and state-of-the-art influenza vaccine production line started operations in Beijing. The plant, which complies with Chinese Good Manufacturing Practice guidelines and utilizes green production processes, enables automated production at scale that expands SINOVAC’s capacity to meet the growing global demand for high-quality influenza vaccines. SINOVAC’s influenza vaccines expand international market accessibility in 2023 by obtaining more overseas market approvals, such as in Pakistan and Chile. A study conducted recently in the Philippines and Chile demonstrated that the immunogenicity induced by SINOVAC’s quadrivalent influenza vaccine was non-inferior and the geometric mean titers were even higher in individuals aged 3 years and older, when compared with the control vaccine which was widely used. Varicella Vaccine – SINOVAC’s live attenuated varicella vaccine, the first WHO prequalified Chinese varicella vaccine, was successfully supplied to Türkiye this year. The varicella vaccine was also registered in Lebanon and Kenya in 2023. Hand Foot and Mouth Disease Vaccine – SINOVAC’s Enterovirus 71 (EV71) vaccine, Inlive®, has already safeguarded millions of children in China. In 2023, SINOVAC has initiated phase I clinical trials of its bivalent enterovirus inactivated vaccine, which aims to protect against hand, foot and mouth disease (HFMD) caused by enterovirus 71 (EV71) and coxsackievirus 16 (CA16). Strategic Developments - We achieved several milestones in the strategic development in 2023. In Türkiye, our first joint venture with a local partner has successfully completed construction of a vaccine production plant, and a GMP certificate was obtained from the Turkish Medicines and Medical Devices Agency. In Latin America, we participated in a tender issued by the government of Bogota, Colombia, for localizing human vaccine production, and we were successfully selected as the exclusive strategic partner with BogotáBio, a local vehicle for the localization project, which aims to build the first local human vaccine production facility with municipal partner in Colombia’s capital of Bogota. SINOVAC's extensive expertise and experience in vaccine R&D and production, and its successful track record in establishing vaccine manufacturing facilities will play a pivotal role in the new venture. At the end of 2023, SINOVAC completed an investment in Synermore Biologics (Suzhou) Co., Ltd., a company which focuses on the development and production of monoclonal antibody drugs in the fields of infectious diseases, malignant tumors and autoimmune diseases. The investment marks a key step for SINOVAC entering into the novel antibody drugs field. Unaudited Financial Results for the Second Half of 2023 Sales for the second half of 2023 were $307.9 million, compared to $280.5 million in the prior year period. The increase was mainly due to increased sales of our influenza vaccines. Selling, general and administrative expenses in the second half of 2023 were $235.3 million, compared to $667.7 million in the prior year period. The decrease was mainly due to lower expenses incurred in the COVID-19 employee incentive plan which was established in 2022. R&D expenses in the second half of 2023 were $193.4 million, compared to $257.7 million in the prior year period. Net loss in the second half of 2023 was $228.3 million, compared to net loss of $702.3 million in the prior year period. Net loss attributable to common shareholders was $119.9 million, or a loss of $1.20 per basic and diluted share, in the second half of 2023, compared to a net loss attributable to common shareholders of $373.7 million, or a loss of $3.76 per basic and diluted share, in the prior year period. As the Company announced on February 22, 2019, the Company’s board of directors determined that certain shareholders became acquiring persons, as defined in the Company’s rights agreement (“Rights Agreement”), under which a trigger event occurred. As a result, the Company issued new common and preferred shares of SINOVAC. Without the effect of implementing the Rights Agreement and newly-issued common and preferred shares, basic and diluted loss per share for the second half of 2023 would be $1.63. Non-GAAP adjusted EBITDA was a loss of $111.6 million in the second half of 2023, compared to a loss of $998.7 million in the prior year period. Non-GAAP net loss was $183.0 million in the second half of 2023, compared to a net loss of $805.8 million in the prior year period. Non-GAAP diluted loss per share in the second half of 2023 was $0.93 compared to a loss of $4.38 per share in the prior year period. Non-GAAP diluted loss per share in the second half of 2023, excluding the implementation of the Rights Agreement and the newly-issued common and preferred shares, would be $1.29. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement. The Company’s financial statements for the second half of 2023 are prepared and presented in accordance with U.S. GAAP. However, they have not been audited or reviewed by the Company’s independent registered accounting firm. Financial Results for the Twelve Months Ended December 31, 2023 Sales in 2023 were $448.3 million, a decrease from $1.5 billion in the prior year. The decrease was due to decreased sales of CoronaVac®. Selling, general and administrative expenses in 2023 were $466.3 million, compared to $823.5 million in the prior year. The decrease was mainly due to lower expenses incurred in the COVID-19 employee incentive plan which was established in 2022. R&D expenses in 2023 were $344.5 million, compared to $442.1 million in the prior year. The Company continued to invest in the advancement of pipeline vaccines in 2023. Net loss in 2023 was $258.4 million, compared to a net income of $88.1 million in the prior year. Net income decreased primarily due to decreased sales. Net loss attributable to common shareholders was $105.9 million, or a loss of $1.06 per basic and diluted share, compared to net income attributable to common shareholders of $107.9 million, or $1.08 per basic and $1.00 per diluted share, in the prior year. Excluding the implementation of the Rights Agreement, as described above, and the newly-issued common and preferred shares, basic and diluted loss per share for 2023 would be $1.39. Non-GAAP adjusted EBITDA was a loss of $458.3 million in 2023, compared to a loss of $309.5 million in the prior year. Non-GAAP net loss in 2023 was $303.9 million, compared to a net loss of $177.0 million in the prior year. Non-GAAP diluted loss per share in 2023 was $1.32, compared to a loss of $0.37 per share in the prior year. Non-GAAP diluted loss per share in 2023, excluding the implementation of the Rights Agreement and the newly-issued common and preferred shares, would be $1.84 per share. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement. As of December 31, 2023, cash and cash equivalents and restricted cash totaled $1.3 billion, compared to $4.3 billion as of December 31, 2022. In 2023, net cash provided by operating activities was $104.0 million, net cash used in investing activities was $2.9 billion, and net cash used in financing activities was $76.1 million. As of December 31, 2023, the Company had $76.1 million in bank loans due within one year. The Company expects that its current cash position will be able to support its operations for at least the next 12 months. Legal Proceedings As previously disclosed by the Company, on March 13, 2018, 1Globe Capital LLC (“1Globe”) filed a complaint against the Company in the Antigua Court. The trial of the matter took place from December 3 to 5, 2018. On December 19, 2018, the Antigua judge handed down his judgment (the “Antigua Judgment”), finding the Company fully in favor, dismissing 1Globe’s claim and declaring the Rights Agreement was validly adopted as a matter of Antigua law. On January 29, 2019, 1Globe filed a Notice of Appeal against the Antigua Judgment. On March 4, 2019, 1Globe filed an application for urgent interim relief, seeking an injunction to prevent the Company from continuing to implement its Rights Agreement until the resolution of the appeal. This application was heard on April 4, 2019, at which the Court of Appeal issued an order restraining the Company from operating the Rights Agreement in any way that affects 1Globe’s rights or shareholding or otherwise distributing the exchange shares (the “Exchange Shares”) to the Company’s shareholders who did not trigger the Rights Plan until after the determination of the appeal (the “Exchange Shares”). 1Globe’s appeal against the Antigua Judgment was heard on September 18, 2019, and the appeal decision was announced by the Eastern Caribbean Supreme Court, Court of Appeal (the “Court of Appeal”) on December 9, 2021, upholding the Antigua Judgment in each point. 1Globe applied for leave to appeal to the Judicial Committee of the Privy Council (the “Privy Council”), and the hearing of the application was held on February 24, 2022, in which the Court of Appeal granted 1Globe leave to appeal to the Privy Council on certain grounds, although not including the challenge to the validity of the Rights Agreement. On April 19, 2022, 1Globe renewed its application directly to the Privy Council for leave to appeal on its ground of appeal concerning the validity of the Rights Agreement. The final substantive hearing before the Privy Council is listed for July 10 to 11, 2024. The judgment will be reserved and delivered in writing at a later date. The appeal outcome is therefore pending. As previously disclosed, on March 5, 2018, the Company filed a lawsuit in the Court of Chancery of the State of Delaware, seeking a determination on whether 1Globe, the Chiang Li Family, OrbiMed Advisors, LLC and certain other shareholders of the Company had triggered the Rights Agreement. On April 12, 2018, 1Globe filed an amended answer to the Company’s complaint, counterclaims and a third-party complaint against the Company and Mr. Weidong Yin, alleging, among other allegations, that the Rights Agreement is not valid. On March 6, 2019, the Delaware Chancery Court entered a status quo order, providing that the Company not distribute any of the Exchange Shares to the Company’s shareholders who did not trigger the Rights Plan until the final disposition of the pending Delaware litigation or further order of the Court. On April 8, 2019, the Delaware Chancery Court stated that the Delaware litigation was pending the final outcome of 1Globe’s appeal of the Antigua Judgment. Separately, Heng Ren Investments LP (“Heng Ren”) filed suits against SINOVAC and Weidong Yin on May 31, 2019 in Massachusetts state court for the alleged breach of fiduciary duties and wrongful equity dilution. SINOVAC moved the matter from the state court to the United States District Court for the District of Massachusetts. Heng Ren alleged that Mr. Yin breached fiduciary duties owed to minority shareholders, that SINOVAC aided and abetted breaches of fiduciary duties and that both SINOVAC and Mr. Yin engaged in wrongful equity dilution. Heng Ren requested damages, attorney fees, and prejudgment interest. In July 2021, SINOVAC moved to dismiss Heng Ren’s amended complaint in the federal court in Massachusetts. On March 4, 2022, the court granted the motion as to the breach of fiduciary duty claims and denied the motion as to the wrongful equity dilution claim and denied reconsideration of its decision on the motion. SINOVAC has answered the complaint. Pursuant to the current schedule, the close of fact discovery is April 26, 2024, the deadline for initial summary judgment motions is August 23, 2024, and, should the case not be resolved through settlement or at summary judgment, trial is set to begin on December 9, 2024. On September 6, 2023, MW Gestion, an institutional asset manager based in France, filed a class action complaint on behalf of all SINOVAC shareholders against SINOVAC; Weidong Yin; and other managers and directors of SINOVAC, including Nan Wang, Simon Anderson, Yuk Lam Lo, Kenneth Lee, Meng Mei, and Shan Fu (the “Individual Defendants” and collectively with SINOVAC the “SINOVAC Defendants”); and Wilmington Trust National Association. MW Gestion alleges breach of contract, breach of fiduciary duty, and wrongful dilution claims against the SINOVAC Defendants, as well as aiding and abetting breach of contract and breach of fiduciary duty against the Individual Defendants. MW Gestion’s claims stem from a private investment in public equity transaction on July 2, 2018, and SINOVAC’s implementation of its Rights Agreement on February 22, 2019. SINOVAC and certain other defendants filed a motion to dismiss all claims on November 20, 2023, and the motion was fully briefed as of February 27, 2024. Status of Exchange Shares and Trading in the Company’s Shares As a result of the pending legal proceedings described above, the Exchange Shares are expected to remain in a trust for the benefit of the Company’s shareholders who did not trigger the Rights Plan until, at least, the conclusion of the appeal against the Antigua Judgment and the final disposition of the Delaware litigation or further order of the Delaware Chancery Court. The Exchange Shares remain issued and outstanding. The Nasdaq Stock Market LLC implemented a halt on trading of the Company’s common shares at the time the Exchange Shares were issued to the trust. The Company is currently unable to estimate when trading will resume, or if Nasdaq will take any additional action in regard to trading of the Company’s common shares. About SINOVAC Sinovac Biotech Ltd. (SINOVAC) is a China-based biopharmaceutical company that focuses on the R&D, manufacturing, and commercialization of vaccines that protect against human infectious diseases. SINOVAC’s product portfolio includes vaccines against COVID-19, enterovirus 71 (EV71) infected hand-foot-mouth disease (HFMD), hepatitis A, varicella, influenza, poliomyelitis, pneumococcal disease, mumps, etc. The COVID-19 vaccine, CoronaVac®, has been approved for use in more than 60 countries and regions worldwide. The hepatitis A vaccine, Healive®, passed WHO prequalification requirements in 2017. The EV71 vaccine, Inlive®, is an innovative vaccine under "Category 1 Preventative Biological Products" and commercialized in China in 2016. In 2022, SINOVAC’s Sabin-strain inactivated polio vaccine (sIPV) and varicella vaccine were prequalified by the WHO. SINOVAC was the first company to be granted approval for its H1N1 influenza vaccine Panflu.1®, which has supplied the Chinese government's vaccination campaign and stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine, Panflu®, to the Chinese government stockpiling program. SINOVAC continually dedicates itself to new vaccine R&D, with more combination vaccine products in its pipeline, and constantly explores global market opportunities. SINOVAC plans to conduct more extensive and in-depth trade and cooperation with additional countries, and business and industry organizations. For more information, please visit the Company’s website at . Safe Harbor Statement This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. In particular, the outcome of any litigation is uncertain, and the Company cannot predict the potential results of the litigation it filed or filed against it by others. Additionally, the triggering of a shareholder rights plan is nearly unprecedented, and the Company cannot predict the impact on the Company or its stock price as a result of the trigger of the rights plan. Non-GAAP Financial Measures To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, SINOVAC uses the following non-GAAP financial measures: non-GAAP adjusted EBITDA, non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share. For more information on these non-GAAP financial measures, please refer to the table captioned “Reconciliations of non-GAAP Measures to the Nearest Comparable GAAP Measures” in this results announcement. SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share help identify underlying trends in its business that could otherwise be distorted by the effect of certain income or expenses that SINOVAC includes in net income and diluted earnings (loss) per share. SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share provide useful information about its core operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Non-GAAP adjusted EBITDA, non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share should not be considered in isolation or construed as an alternative to income from operations, net income (loss), diluted earnings (loss) per share, or any other measure of performance or as an indicator of SINOVAC’s operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. Non-GAAP adjusted EBITDA represents net income (loss) and excludes interest and financing expenses, interest income, net other income (expenses) and income tax benefit (expenses), and certain non-cash expenses, consisting of share-based compensation expenses, amortization and depreciation that SINOVAC does not believe are reflective of the core operating performance during the periods presented. Non-GAAP net income (loss) represents net income (loss) before share-based compensation expenses and foreign exchange gain or loss. Non-GAAP diluted earnings (loss) per share represents non-GAAP net income (loss) attributable to common shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis, including accounting for the effect of the assumed conversion of options. SINOVAC BIOTECH LTD. Consolidated Balance Sheets As of December 31, 2023 and 2022 (Expressed in thousands of U.S. Dollars) December 31, 2023 December 31, 2022 Current assets Cash and cash equivalents $ 1,270,131 $ 4,278,124 Restricted cash 5,166 8,253 Short-term investments 9,953,042 7,034,569 Accounts receivable - net 440,019 537,118 Inventories 139,874 180,719 Prepaid expenses and deposits 11,621 15,242 Income tax receivable 10,703 72,371 Total current assets 11,830,556 12,126,396 Property, plant and equipment – net 979,617 993,781 Prepaid land lease payments 65,540 69,815 Intangible assets - net 8,520 9,699 Long-term prepaid expenses 24 23 Long-term investments 684,285 661,440 Prepayments for acquisition of equipment 6,772 120,912 Deferred tax assets 29,790 71,118 Right-of-use assets 45,525 58,586 Other Non-current Assets 7,345 2,798 Total assets 13,657,974 14,114,568 Current liabilities Short-term bank loans and current portion of long-term bank loans 76,089 293 Loan from a non-controlling shareholder - 4,358 Accounts payable and accrued liabilities 973,949 905,923 Income tax payable 41,258 - Deferred revenue 20,127 17,955 Deferred government grants 1,586 15,120 Dividend payable 29,089 141,993 Lease liability 5,806 5,993 Total current liabilities 1,147,904 1,091,635 Deferred revenue 200 - Deferred government grants 5,865 4,477 Long-term bank loans 177,817 11,513 Deferred tax liability 263,711 241,526 Lease liability 39,271 52,516 Other non-current liabilities 439 240 Total long-term liabilities 487,303 310,272 Total liabilities 1,635,207 1,401,907 Commitments and contingencies Equity Preferred stock 15 15 Common stock 100 100 Additional paid-in capital 541,258 540,582 Accumulated other comprehensive income (loss) (490,055) (383,276) Statutory surplus reserves 1,539,584 1,538,013 Accumulated earnings 7,118,516 7,225,987 Total shareholders' equity 8,709,418 8,921,421 Non-controlling interests 3,313,349 3,791,240 Total equity 12,022,767 12,712,661 Total liabilities and equity $ 13,657,974 $ 14,114,568 SINOVAC BIOTECH LTD. Consolidated Statements of Comprehensive Income (Loss) For the six and twelve months ended 2023 and 2022 (Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data) Six months ended December 31, Year ended December 31, 2023 2022 2023 2022 (Unaudited) (Unaudited) Sales $ 307,865 $ 280,471 $ 448,269 $ 1,492,761 Cost of sales (6,893) 430,094 181,516 684,456 Gross profit 314,758 (149,623) 266,753 808,305 Selling, general and administrative expenses 235,276 667,663 466,324 823,543 Provision for doubtful accounts 2,252 3,461 2,638 4,268 Research and development expenses 193,383 257,714 344,515 442,108 Loss on disposal and impairment of property, plant and equipment 78,408 1,927 78,720 5,213 Government grants recognized in income (22,331) (746) (22,423) (760) Total operating expenses 486,988 930,019 869,774 1,274,372 Operating loss (172,230) (1,079,642) (603,021) (466,067) Interest and financing expenses (1,996) (641) (2,260) (1,264) Interest income 55,525 106,820 85,114 190,818 Other income (expense), net 29,277 72,293 367,133 301,751 Income (loss) before income taxes (89,424) (901,170) (153,034) 25,238 Income tax benefit (expense) (138,918) 198,855 (105,321) 62,893 Net income (loss) (228,342) (702,315) (258,355) 88,131 Less: loss attributable to non-controlling interests 111,506 331,669 158,437 25,735 Net income (loss) attributable to shareholders of Sinovac (116,836) (370,646) (99,918) 113,866 Preferred stock dividends (3,024) (3,024) (5,982) (5,982) Net income (loss) attributable to common shareholders of Sinovac (119,860) (373,670) (105,900) 107,884 Net income (loss) (228,342) (702,315) (258,355) 88,131 Other comprehensive income (loss), net of tax of nil Foreign currency translation adjustments 154,217 (279,794) (280,426) (859,045) Unrealized gain 72,817 - 65,900 - Comprehensive loss (1,308) (982,109) (472,881) (770,914) Less: comprehensive loss attributable to non-controlling interests 48,879 445,656 266,184 370,882 Comprehensive income (loss) attributable to shareholders of Sinovac 47,571 (536,453) (206,697) (400,032) Earnings/loss per share Basic net income (loss) per share (1.20) (3.76) (1.06) 1.08 Diluted net income (loss) per share (1.20) (3.76) (1.06) 1.00 Weighted average number of shares of common stock outstanding Basic 99,638,043 99,502,243 99,607,574 99,502,243 Diluted 99,638,043 99,502,243 99,607,574 114,172,782 SINOVAC BIOTECH LTD. Consolidated Statements of Cash Flows For the six and twelve months ended 2023 and 2022 (Expressed in thousands of U.S. Dollars) Six months ended December 31, Year ended December 31, 2023 2022 2023 2022 (Unaudited) (Unaudited) Operating activities Net income (loss) $ (228,342) $ (702,315) $ (258,355) $ 88,131 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Deferred income taxes 108,448 (67,172) 76,324 (83,010) Share-based compensation - - - - Inventory provision 39,903 83,800 52,527 140,004 Provision for doubtful accounts 2,252 3,461 2,638 4,268 Loss on disposal and impairment of property, plant and equipment 78,408 1,927 78,720 5,213 Depreciation of property, plant and equipment 57,983 78,660 140,467 153,819 Amortization of prepaid land lease payments 1,090 1,374 2,228 1,749 Amortization of intangible assets 1,523 932 2,050 1,029 Government grants recognized in income (5,518) (746) (22,423) (760) Investment income (172,847) - (248,085) - Changes in: Accounts receivable (8,287) 429,615 82,147 289,600 Inventories 6,530 (6,869) (16,766) 30,382 Income tax (recoverable) payable 107,202 (191,672) 101,378 (1,275,296) Prepaid expenses and deposits 1,682 (111,395) 3,265 22,519 Deferred revenue 4,957 (13,364) 2,883 (58,485) Accounts payable and accrued liabilities 156,638 536,063 109,430 (86,860) Other non-current assets/liabilities (7,634) (5,531) (4,431) (3,048) Net cash provided by (used in) operating activities 143,988 36,768 103,997 (770,745) Financing activities Proceeds from bank loans 33,808 1 243,395 151 Repayments of bank loans (158) (48) (308) (2,981) Proceeds from issuance of common stock, net of share issuance costs - - 676 - Dividend paid (326,464) (260,702) (328,080) (263,171) Proceeds from subsidiary's financing - - - 11,291 Government grants received 3,831 9,776 12,499 14,797 Repayments of loan from a non-controlling shareholder (4,244) (1,474) (4,245) (1,486) Net cash used in financing activities (293,227) (252,447) (76,063) (241,399) Investing activities Purchase of investments (1,593,895) (5,717,991) (8,222,005) (11,658,465) Proceeds from redemption and sales of investments 1,561,769 3,619,956 5,575,287 6,327,521 Proceeds from disposal of equipment 2 5 39 608 Proceeds from dissolution of subsidiary - 114,352 - 114,352 Acquisition of property, plant and equipment (51,601) (114,402) (144,543) (393,800) Prepaid land lease payments - (26,025) - (35,683) Acquisition of intangible assets (1,145) (9,568) (1,145) (9,568) Purchase of equity investments (108,975) (42,155) (133,767) (105,435) Distributions by equity method investees 679 - 2,021 - Net cash used in investing activities (193,166) (2,175,828) (2,924,113) (5,760,470) Effect of exchange rate changes on cash and cash equivalents and restricted cash (29,058) (189,210) (114,901) (560,769) Decrease in cash and cash equivalents and restricted cash (371,463) (2,580,717) (3,011,080) (7,333,383) Cash and cash equivalents and restricted cash, beginning of period 1,646,760 6,867,094 4,286,377 11,619,760 Cash and cash equivalents and restricted cash, end of period 1,275,297 4,286,377 1,275,297 4,286,377 SINOVAC BIOTECH LTD. Reconciliations of Non-GAAP measures to the nearest comparable GAAP measures For the six and twelve months ended 2023 and 2022 (Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data) Six months ended December 31, Year ended December 31, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net income (loss) $ (228,342) $ (702,315) $ (258,355) $ 88,131 Adjustments: Depreciation and amortization 60,596 80,966 144,745 156,597 Interest and financing expenses, net of interest income (53,529) (106,179) (82,854) (189,554) Other expense (income), net (29,277) (72,293) (367,133) (301,751) Income tax (benefit) expense 138,918 (198,855) 105,321 (62,893) Non-GAAP adjusted EBITDA (111,634) (998,676) (458,276) (309,470) Net income (loss) (228,342) (702,315) (258,355) 88,131 Add: Foreign exchange (gain) loss 45,308 (103,472) (45,543) (265,091) Non-GAAP net loss (183,034) (805,787) (303,898) (176,960) Net income (loss) attributable to common shareholders of Sinovac (119,860) (373,670) (105,900) 107,884 Add: Non-dilutive preferred stock dividends - - - 5,982 Net income (loss) attributable to common shareholders of Sinovac for computing diluted earnings per share (119,860) (373,670) (105,900) 113,866 Add: Non-GAAP adjustments to net income (loss) 27,280 (61,239) (26,069) (156,332) Non-GAAP net loss attributable to common shareholders of Sinovac for computing non-GAAP diluted earnings per share (92,580) (434,909) (131,969) (42,466) Weighted average number of shares on a diluted basis 99,638,043 99,502,243 99,607,574 114,172,782 Diluted earnings (loss) per share (1.20) (3.76) (1.06) 1.00 Add: Non-GAAP adjustments to net income (loss) per share 0.27 (0.62) (0.26) (1.37) Non-GAAP diluted earnings (loss) per share (0.93) (4.38) (1.32) (0.37)

BEIJING--(BUSINESS WIRE)-- Sinovac Biotech Ltd. (NASDAQ: SVA) (“SINOVAC” or the “Company”), a leading provider of biopharmaceutical products in China, announced today its unaudited financial results for the six months ended June 30, 2023. First Half of 2023 Financial Summary Sales for the six months ended June 30, 2023 were $140.4 million, compared to $1.2 billion in the prior year period. The Company posted $14.0 million of net income attributable to common shareholders, or $0.14 per basic and $0.15 per diluted share, in the six-month period ended June 30, 2023, compared to net income attributable to common shareholders of $481.6 million, or $4.84 per basic and $4.24 per diluted share, in the prior year period. Mr. Weidong Yin, Chairman, President and CEO of SINOVAC, commented “After experiencing three years of the COVID-19 pandemic, the world is still facing the threat of various infectious diseases in 2023. The ability to combat global outbreaks remains vital to world health. As a prominent biopharmaceutical products provider in China, SINOVAC continues to increase its investment in the research and development and production of vaccines beyond COVID-19, and keeps exploring additional biomedical products including antibodies. Meanwhile, we maintained a strong international presence, by providing high-quality vaccines and localized production. “Looking ahead, SINOVAC is determined to sustain our business momentum in both domestic and international markets, strengthen our product portfolio and partnerships, and provide many accessible pharmaceutical products to meet the increasing healthcare demand from around the world.” Business Updates COVID-19 Antibody Products – SINOVAC’s broad-spectrum neutralizing antibody products, SA55 Injection and Nasal Spray, which are intended for the prevention and treatment of COVID-19 infections, were approved for clinical trial in China. By leveraging its extensive experience in COVID-19 vaccine development and production, SINOVAC is capable of large-scale manufacture of these broad-spectrum neutralizing antibody products in compliance with Good Manufacturing Practice standards. Hepatitis A Vaccine – Healive®, the first and only WHO prequalified inactivated hepatitis A vaccine from China, has been registered in more than 20 countries and organizations worldwide by thus far, with additional market approvals in Lebanon, Kyrgyzstan, Egypt, India and Pakistan this year. Influenza Vaccine – A new and state-of-the-art influenza vaccine production line started operations in Beijing. The plant, which complies with Chinese Good Manufacturing Practice guidelines and utilizes green production processes, enables automated production at scale that expands SINOVAC capacity to meet the growing global demand for high-quality influenza vaccines. SINOVAC’s influenza vaccines expand international market accessibility in the first half of 2023 by gaining more overseas market approvals, such as Pakistan and Chile. Varicella Vaccine – SINOVAC’s live attenuated varicella vaccine, the first WHO prequalified Chinese varicella vaccine, successfully delivered to the Republic of Türkiye early this year. The vaccine was also registered in Lebanon and Kenya this year. Hand Foot and Mouth Disease Vaccine – SINOVAC’s bivalent inactivated vaccine, developed to combat enterovirus (EV) and coxsackievirus (CV) infections, was approved for clinical trials in China this year. It aims to protect children from hand, foot and mouth disease caused by EV71 and CA16. SINOVAC’s EV 71 vaccine, Inlive®, has already safeguarded millions of children in China. Strategic Development outside of China - SINOVAC has been named the exclusive strategic partner of BogotáBio, which will break ground as the first local human vaccine production facility to be established with local government in Colombia’s capital city of Bogota. SINOVAC's extensive expertise and experience in vaccine R&D and production, and successful track record establishing vaccine manufacturing facilities will play a pivotal role in the new venture. Unaudited Financial Results for the First Half of 2023 Sales for the first half of 2023 were $140.4 million, compared to $1.2 billion in the prior year period. The decrease was mainly due to decreased sales of CoronaVac®. The negative gross margin at 34.2% was caused by the sharply reduced sales of CoronaVac combined with the COVID-19 employee incentive plan established in 2022. Selling, general and administrative expenses in the first half of 2023 were $231.0 million, compared to $155.9 million in the prior year period. The increase was mainly due to a COVID-19 employee incentive plan established in 2022. R&D expenses in the first half of 2023 were $151.1 million, compared to $184.4 million in the prior year period. Net loss in the first half of 2023 was $30.0 million, compared to net income of $790.4 million in the prior year period. Net income attributable to common shareholders was $14.0 million, or $0.14 per basic and $0.15 per diluted share, in the first half of 2023, compared to a net income attributable to common shareholders of $481.6 million, or $4.84 per basic and $4.24 per diluted share, in the prior year period. As the Company announced on February 22, 2019, the Company’s board of directors determined that certain shareholders became acquiring persons, as defined in the Company’s rights agreement (“Rights Agreement”), under which a trigger event occurred. As a result, the Company issued new common and preferred shares of SINOVAC. Without the effect of implementing the Rights Agreement and newly-issued common and preferred shares, basic and diluted earnings per share for the first half of 2023 would be $0.24 and $0.24, respectively. Non-GAAP adjusted EBITDA was $346.6 million loss in the first half of 2023, compared to $691.3 million income in the prior year period. Non-GAAP net loss was $120.9 million in the first half of 2023, compared to $628.8 million net income in the prior year period. Non-GAAP diluted earnings per share in the first half of 2023 was negative $0.32 compared to $3.41 per share in the prior year period. Non-GAAP diluted earnings per share in the first half of 2023, excluding the implementation of the Rights Agreement and the newly-issued common and preferred shares, would be negative $0.51. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this news release. As of June 30, 2023, cash and cash equivalents and restricted cash totaled $1.6 billion, compared to $4.3 billion as of December 31, 2022. In the first half of 2023, net cash used in operating activities was $40.0 million, net cash used in investing activities was $2.7 billion reflecting the net position of short-term investment purchase over redemption, and net cash provided by financing activities was $217.2 million. The Company’s first half of 2023 financial statements are prepared and presented in accordance with U.S. GAAP. However, they have not been audited or reviewed by the Company’s independent registered accounting firm. Legal Proceedings As previously disclosed by the Company, on March 13, 2018, 1Globe Capital LLC (“1Globe”) filed a complaint against the Company in the Antigua Court. The trial of the matter took place from December 3 to 5, 2018. On December 19, 2018, the Antigua judge handed down his judgment (the “Antigua Judgment”), finding the Company fully in favor, dismissing 1Globe’s claim and declaring the Rights Agreement was validly adopted as a matter of Antigua law. On January 29, 2019, 1Globe filed a Notice of Appeal against the Antigua Judgment. On March 4, 2019, 1Globe filed an application for urgent interim relief, seeking an injunction to prevent the Company from continuing to implement its Rights Agreement until the resolution of the appeal. This application was heard on April 4, 2019, at which the Court of Appeal issued an order restraining the Company from operating the Rights Agreement in any way that affects 1Globe’s rights or shareholding or otherwise distributing the exchange shares to the Company’s shareholders who did not trigger the Rights Plan until after the determination of the appeal (the “Exchange Shares”). 1Globe’s appeal against the Antigua Judgment was heard on September 18, 2019, and the appeal decision was announced by the Eastern Caribbean Supreme Court, Court of Appeal (the “Court of Appeal”) on December 9, 2021, upholding the Antigua Judgment in each point. 1Globe applied for leave to appeal to the Judicial Committee of the Privy Council (the “Privy Council”), and the hearing of the application was held on February 24, 2022, in which the Court of Appeal granted 1Globe leave to appeal to the Privy Council on certain grounds, although not including the challenge to the validity of the Rights Agreement. On April 19, 2022, 1Globe renewed its application directly to the Privy Council for leave to appeal on its ground of appeal concerning the validity of the Rights Agreement. On July 13, 2022, 1Globe filed its Notice of Appeal on those grounds on which the Court of Appeal had granted 1Globe leave to appeal. On September 16, 2022, 1Globe filed an application to the Privy Council seeking permission to amend its existing application for permission to appeal and its existing Notice of Appeal, and to seek permission to appeal on another ground rejected by the Court of Appeal concerning the exercise of the Antigua Court’s discretion. SINOVAC responded on October 21, 2022. On February 15, 2023, the Privy Council made a procedural decision to allow amendment of its existing application for permission to appeal, and decided to deal with procedural and substantive issues together at the Final Hearing. 1Globe is still completing necessary procedural filings, and has not yet taken steps to list a substantive hearing before the Privy Council. The appeal outcome is therefore pending. As previously disclosed, on March 5, 2018, SINOVAC filed a lawsuit in the Court of Chancery of the State of Delaware, seeking a determination on whether 1Globe, the Chiang Li Family, OrbiMed Advisors, LLC and certain other shareholders of the Company had triggered the Rights Agreement. On April 12, 2018, 1Globe filed an amended answer to the Company’s complaint, counterclaims and a third-party complaint against the Company and Mr. Weidong Yin, alleging, among other allegations, that the Rights Agreement is not valid. On March 6, 2019, the Delaware Chancery Court entered a status quo order, providing that the Company not distribute any of the Exchange Shares to the Company’s shareholders who did not trigger the Rights Plan until the final disposition of the pending Delaware litigation or further order of the Court. On April 8, 2019, the Delaware Chancery Court stated that the Delaware litigation was pending the final outcome of 1Globe’s appeal of the Antigua Judgment. Separately, Heng Ren Investments LP (“Heng Ren”) filed suit against SINOVAC and Weidong Yin for alleged breach of fiduciary duties and wrongful equity dilution on May 31, 2019, in Massachusetts state court. SINOVAC moved the matter from state court to the United States District Court for the District of Massachusetts. On September 14, 2020, SINOVAC filed a motion to dismiss Heng Ren’s claims. Subsequently, on April 29, 2021, Heng Ren filed an amended complaint which alleged that Mr. Yin breached fiduciary duties owed to minority shareholders, that SINOVAC aided and abetted breaches of fiduciary duties, and that both SINOVAC and Mr. Yin engaged in wrongful equity dilution. Heng Ren requested damages, attorneys’ fees, and prejudgment interest. On July 16, 2021, SINOVAC moved to dismiss Heng Ren’s amended complaint in the federal court in Massachusetts. On March 4, 2022, the court granted the motion as to the breach of fiduciary duty claims and denied the motion as to the wrongful equity dilution claim, and denied reconsideration of its decision on the motion. SINOVAC has answered the complaint. On January 19, 2023, SINOVAC filed a motion to stay the Heng Ren action pending the resolution of a putative shareholder class action, described in the paragraph below. On February 15, 2023, the court stayed discovery in the Heng Ren matter pending the resolution of the putative class action. As previously disclosed by the Company, On December 5, 2022, a purported shareholder filed a putative class action complaint in United States District Court for the District of Massachusetts, asserting a claim under Section 204 of the Antigua and Barbuda International Business Corporations Act related to a private placement of SINOVAC’s common shares with private investors Vivo Capital and Advantech Capital completed on July 2, 2018 (the “PIPE Transaction”), alleging that all shareholders were harmed in an identical manner to one another by the PIPE Transaction because the shares that were issued in the PIPE transaction allegedly undervalued SINOVAC and all shareholders were purportedly wrongfully diluted as a result. The purported shareholder is represented by the same attorney who represents Heng Ren, and requests damages, attorneys’ fees, and prejudgment interest. On January 18, 2023, SINOVAC filed a motion to dismiss. The motion was fully briefed as of March 9, 2023, and is currently pending before the court. Status of Exchange Shares and Trading in the Company’s Shares As a result of the pending legal proceedings described above, the Exchange Shares are expected to remain in a trust for the benefit of the Company’s shareholders who did not trigger the Rights Plan until, at least, the conclusion of the appeal against the Antigua Judgement and the final disposition of the Delaware litigation or further order of the Delaware Chancery Court. The Exchange Shares remain issued and outstanding. The Nasdaq Stock Market LLC implemented a halt on trading of the Company’s common shares at the time the Exchange Shares were issued to the trust. The Company is currently unable to estimate when trading will resume, or if Nasdaq will take any additional action in regards to trading of the Company’s common shares. About SINOVAC Sinovac Biotech Ltd. (SINOVAC) is a China-based biopharmaceutical company that focuses on the R&D, manufacturing, and commercialization of biomedical products that protect against human diseases. SINOVAC’s product portfolio includes vaccines against COVID-19, enterovirus 71 (EV71) infected hand-foot-mouth disease (HFMD), hepatitis A, varicella, influenza, poliomyelitis, pneumococcal disease, mumps, etc. The COVID-19 vaccine, CoronaVac®, has been approved for use in more than 60 countries and regions worldwide. The hepatitis A vaccine, Healive®, passed WHO prequalification requirements in 2017. The EV71 vaccine, Inlive®, is an innovative vaccine under "Category 1 Preventative Biological Products" and commercialized in China in 2016. In 2022, SINOVAC’s Sabin-strain inactivated polio vaccine (sIPV) and varicella vaccine were prequalified by the WHO. SINOVAC was the first company to be granted approval for its H1N1 influenza vaccine Panflu.1®, which has supplied the Chinese government's vaccination campaign and stockpiling program. The Company is also the only supplier of the H5N1 pandemic influenza vaccine, Panflu®, to the Chinese government stockpiling program. SINOVAC continually dedicates itself to pipeline development including but not limited to new technology, new vaccines as well as other biomedical products. We will constantly explore global opportunities of strategic expansion. For more information, please visit the Company’s website at . Safe Harbor Statement This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. In particular, the outcome of any litigation is uncertain, and the Company cannot predict the potential results of the litigation it filed or filed against it by others. Additionally, the triggering of a shareholder rights plan is nearly unprecedented, and the Company cannot predict the impact on the Company or its stock price as a result of the trigger of the rights plan. Non-GAAP Financial Measures To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, SINOVAC uses the following non-GAAP financial measures: non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS. For more information on these non-GAAP financial measures, please refer to the table captioned “Reconciliations of non-GAAP Measures to the Nearest Comparable GAAP Measures” in this results announcement. SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS help identify underlying trends in its business that could otherwise be distorted by the effect of certain income or expenses that SINOVAC includes in net income and diluted EPS. SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS provide useful information about its core operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS should not be considered in isolation or construed as an alternative to income from operations, net income, diluted EPS, or any other measure of performance or as an indicator of SINOVAC’s operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. Non-GAAP adjusted EBITDA represents net income and excludes interest and financing expenses, interest income, net other income and income tax benefit (expenses), and certain non-cash expenses, consisting of share-based compensation expenses, amortization and depreciation that SINOVAC does not believe are reflective of the core operating performance during the periods presented. Non-GAAP net income represents net income before share-based compensation expenses and foreign exchange gain or loss. Non-GAAP diluted EPS represents non-GAAP net income attributable to common shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis, including accounting for the effect of the assumed conversion of options. SINOVAC BIOTECH LTD. Consolidated Balance Sheets As of June 30, 2023 and December 31, 2022 (Expressed in thousands of U.S. Dollars) June 30, 2023 December 31, 2022 Current assets Cash and cash equivalents $ 1,643,026 $ 4,278,124 Restricted cash 3,734 8,253 Short-term investments 9,425,778 7,034,569 Accounts receivable - net 425,245 537,118 Inventories 182,735 180,719 Prepaid expenses and deposits 13,312 15,242 Income tax receivable 75,195 72,371 Total current assets 11,769,025 12,126,396 Property, plant and equipment – net 1,058,962 993,781 Prepaid land lease payments 65,519 69,815 Intangible assets - net 8,753 9,699 Long-term prepaid expenses 22 23 Long-term investments 657,767 661,440 Prepayments for acquisition of equipment 16,292 120,912 Deferred tax assets 98,688 71,118 Right-of-use assets 47,676 58,586 Other Non-current Assets 2,306 2,798 Total assets 13,725,010 14,114,568 Current liabilities Short-term bank loans and current portion of long-term bank loans 201,118 293 Loan from a non-controlling shareholder 4,159 4,358 Accounts payable and accrued liabilities 819,530 905,923 Deferred revenue 15,153 17,955 Deferred government grants 4,132 15,120 Dividend payable 139,547 141,993 Lease liability 5,990 5,993 Total current liabilities 1,189,629 1,091,635 Deferred government grants 6,548 4,477 Long-term bank loans 10,989 11,513 Deferred tax liability 239,029 241,526 Lease liability 40,929 52,516 Other non-current liabilities 630 240 Total long-term liabilities 298,125 310,272 Total liabilities 1,487,754 1,401,907 Commitments and contingencies Equity Preferred stock 15 15 Common stock 100 100 Additional paid-in capital 541,258 540,582 Accumulated other comprehensive loss (654,462) (383,276) Statutory surplus reserves 1,538,013 1,538,013 Accumulated earnings 7,239,947 7,225,987 Total shareholders' equity 8,664,871 8,921,421 Non-controlling interests 3,572,385 3,791,240 Total equity 12,237,256 12,712,661 Total liabilities and equity $ 13,725,010 $ 14,114,568 SINOVAC BIOTECH LTD. Consolidated Statements of Comprehensive Income For the six months ended 2023 and 2022 (Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data) Six months ended June 30 2023 2022 Sales $ 140,404 $ 1,212,290 Cost of sales 188,409 254,362 Gross profit (loss) (48,005) 957,928 Selling, general and administrative expenses 231,048 155,880 Provision for doubtful accounts 386 807 Research and development expenses 151,132 184,394 Loss on disposal of property, plant and equipment 312 3,286 Government grants recognized in income (92) (14) Total operating expenses 382,786 344,353 Operating income (loss) (430,791) 613,575 Interest and financing expenses (264) (623) Interest income 29,589 83,998 Other income, net 337,856 229,458 Income (Loss) before income taxes (63,610) 926,408 Income tax benefit (expense) 33,597 (135,962) Net income (loss) (30,013) 790,446 Less: (income) loss attributable to non-controlling interests 46,931 (305,934) Net income attributable to shareholders of Sinovac 16,918 484,512 Preferred stock dividends (2,958) (2,958) Net income attributable to common shareholders of Sinovac 13,960 481,554 Net income (loss) (30,013) 790,446 Other comprehensive income, net of tax of nil Foreign currency translation adjustments (441,560) (579,251) Comprehensive income (loss) (471,573) 211,195 Less: comprehensive (income) loss attributable to non- controlling interests 217,305 (74,774) Comprehensive income (loss) attributable to shareholders of Sinovac (254,268) 136,421 Earnings per share Basic net income per share 0.14 4.84 Diluted net income per share 0.15 4.24 Weighted average number of shares of common stock outstanding Basic 99,576,600 99,502,243 Diluted 114,227,276 114,172,782 SINOVAC BIOTECH LTD. Consolidated Statements of Cash Flows For the six months ended 2023 and 2022 (Expressed in thousands of U.S. Dollars) Six months ended June 30 2023 2022 Operating activities Net income (loss) $ (30,013) $ 790,446 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes (32,124) (15,837) Inventory provision 12,624 56,203 Provision for doubtful accounts 386 807 Loss on disposal of property, plant and equipment 312 3,286 Depreciation of property, plant and equipment 82,484 75,159 Amortization of prepaid land lease payments 1,138 2,503 Amortization of intangible assets 527 97 Government grants recognized in income (92) (14) Loss from equity method investments 374 - Investment income (75,612) - Changes in: Accounts receivable 90,434 (140,015) Inventories (23,296) 37,251 Other non-current assets 2,785 - Income tax payable (5,824) (1,083,624) Prepaid expenses and deposits 1,583 133,914 Deferred revenue (2,074) (45,121) Accounts payable and accrued liabilities (47,208) (622,923) Deferred government grants (16,813) - Other non-current liabilities 418 (298) Net cash used in operating activities (39,991) (808,166) Financing activities Proceeds from bank loans 209,587 199 Repayments of bank loans (150) (3,038) Proceeds from issuance of common stock, net of share issuance costs 676 - Dividend paid to non-controlling shareholders (1,616) (2,469) Proceeds from subsidiary's financing 12,000 Government grants received 8,668 5,021 Repayments of loan from a non-controlling shareholder (1) (12) Net cash provided by financing activities 217,164 11,701 Investing activities Purchase of short-term investments (6,628,110) (15,123,334) Proceeds from redemption of short-term investments 4,013,372 11,890,425 Proceeds from disposal of equipment 37 603 Prepaid land lease payments - (9,658) Acquisition of property, plant and equipment (92,942) (279,398) Acquisition of intangible assets - - Purchase of long-term investments (24,792) (63,280) Distributions of equity method investees 1,342 - Proceeds from sale or maturity of long-term investments 146 Net cash used in investing activities (2,730,947) (3,584,642) Effect of exchange rate changes on cash and cash equivalents and restricted cash (85,843) (371,559) Decrease in cash and cash equivalents and restricted cash (2,639,617) (4,752,666) Cash and cash equivalents and restricted cash, beginning of period 4,286,377 (3,584,642) Cash and cash equivalents and restricted cash, end of period 1,646,760 (8,337,308) SINOVAC BIOTECH LTD. Reconciliations of Non-GAAP measures to the nearest comparable GAAP measures For the six months ended 2023 and 2022 (Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data) Six months ended June 30 2023 2022 (Unaudited) (Unaudited) Net income (loss) $ (30,013) $ 790,446 Adjustments: Depreciation and amortization 84,149 77,759 Interest income, net of interest and financing expenses (29,325) (83,375) Other income, net (337,856) (229,458) Income tax benefit (expense) (33,597) 135,962 Non-GAAP adjusted EBITDA (346,642) 691,334 Net income (loss) (30,013) 790,446 Less: Foreign exchange gain (90,851) (161,619) Non-GAAP net income (loss) (120,864) 628,827 Net income attributable to common shareholders of Sinovac 13,960 481,554 Add: Preferred stock dividends 2,958 2,958 Net income attributable to common shareholders of Sinovac for computing diluted earnings per share 16,918 484,512 Add: Non-GAAP adjustments to net income (53,349) (95,093) Non-GAAP net income attributable to common shareholders of Sinovac for computing non-GAAP diluted earnings per share (36,431) 389,419 Weighted average number of shares on a diluted basis 114,227,276 114,172,782 Diluted earnings per share 0.15 4.24 Add: Non-GAAP adjustments to net income per share (0.47) (0.83) Non-GAAP diluted earnings per share (0.32) 3.41 ​ View source version on businesswire.com: Contacts Sinovac Biotech Ltd. Helen Yang Tel: +86-10-8279 9720 Email: ir@sinovac.com Source: Sinovac Biotech Ltd. ​ View this news release online at: