Background on the Joint Venture:

Jamjoom Algeria Lil Dawa SPA was incorporated by Jamjoom Pharmaceuticals Factory Co. and an Algerian Company, DAWA INVESTMENT SARL (now ultimately owned by VITAL CARE PRODUCTION DISTRIBUTION ET LOGISTIQUE SPA) to acquire and operate a pharmaceutical manufacturing facility in Algeria.

The Capital increase:

Prior to the Capital Increase, the paid-up capital of Jamjoom Lildawa, was One hundred and fifty-eight million Algerian Dinars (DZD 158,000,000) divided into 158,000 shares (with the Company holding 77,415 shares, or 49% of total share capital). Following the capital increase, Jamjoom Lildawa’s capital stands at two billion three hundred and fifty million Algerian Dinars (DZD 2,350,000,000) through the creation and issue of 2,192,000 new shares, with the Company now holding one billion one hundred and fifty-one million and four hundred and ninety-five thousand Algerian Dinars (DZD 1,151,495,000) of the share capital and continuing to hold 49% of the total paid-up capital.

The reasons for the Capital Increase:

A total amount of sixteen million United States Dollars (USD 16,000,000) equivalent to approximately sixty million Saudi Riyals (SAR 60,000,000) was increased in the capital, pertaining to:

1) Partial funding of the acquisition of a pharmaceutical manufacturing site located in Algiers, Algeria, from a reputable multinational pharmaceutical company. The initial payment of the acquisition of the factory is thirteen million nine hundred and forty-eight thousand and six hundred and fifty United States Dollars (USD 13,948,650) equivalent to approximately fifty-two million three hundred and seven thousand and four hundred and thirty-seven Saudi Riyals and fifty halalas (SAR 52,307,437.50); and

2) Funding the day-to-day factory operations amounting to two million and fifty-one thousand and three hundred and fifty United States Dollars (USD 2,051,350) equivalent to approximately seven million five hundred and sixty-nine thousand and five hundred and sixty-two Saudi Riyals and fifty halalas (SAR 7,569,562.50).

The share of investment of Jamjoom Pharma for the above transaction was equivalent to eight million and twenty-five thousand United States Dollars (USD 8,025,000) equivalent to approximately thirty million ninety-three thousand seven hundred and fifty Saudi Riyals (SAR 30,093,750). The closing date of this transaction was 26th of July 2023.

Hence, the Board of Directors of the Company have approved the recommendation for the payment on the 2nd of July 2023 of the aforementioned payment.

The remaining portion of the acquisition (estimated at USD 9.5 million but subject to slight revisions) will be financed by a Shariah-Compliant banking facility agreement between the Joint Venture and a local bank in Algeria, and is expected to be settled within Q3-23. The Company will keep it’s shareholders informed of further developments in this regard.

The factory is a modernized pharmaceutical manufacturing facility producing integrated oral solid dosage formulations (tablets, capsules, powders) and will commence commercial operations in Q3-23.

Jamjoom Pharma expect the factory to commence operations immediately and anticipate to start seeing a financial impact from Q3-23 onwards.

It is worth noting that the Company’s Board Members, Mahmoud Yousuf Jamjoom, Mohammed Yousuf Jamjoom and Ahmed Yousuf Jamjoom each represent the Company with a board seat at Jamjoom Algeria Lil Dawa SPA.