DGAP-Adhoc: PAION AG TO ISSUE APPROX. 2.8 MILLION SHARES AT

PAION AG / Key word(s): Capital Increase 17.12.2013 23:39 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. AD-HOC ANNOUNCEMENT ACCORDING TO §15 WPHG PAION AG TO ISSUE APPROX. 2.8 MILLION SHARES AT EUR 1.80 PER SHARE IN CAPITAL INCREASE WITH SUBSCRIPTION RIGHTS - PAION AG to issue approx. 2.8 million shares at EUR 1.80 per share in capital increase with subscription rights - After that the issue of up to approx. 2.5 million shares under a private placement with the exclusion of subscription rights of shareholders is planned Aachen (Germany), 17 December 2013 - PAION AG (ISIN DE000A0B65S3; Frankfurt Stock Exchange General Standard: PA8) has today decided with the approval of the Supervisory Board of the same day, to increase the Company's registered share capital from EUR 25,379,906.00 by EUR 2,777,777.00 to EUR 28,157,683.00 by issuing 2,777,777 new, registered, no-par value shares with a notional value of EUR 1.00 (the 'New Shares') each with full dividend entitlement as of the fiscal year beginning January 1, 2013. The Close Brothers Bank AG, Frankfurt commits to offer the New Shares for sale to the existing shareholders of the Company at a subscription ratio of 19:2 (indirect subscription right). That is 19 old shares entitle the shareholder to subscribe for two new shares. The subscription price is EUR 1.80 per share. Shareholders may subscribe to the new shares during the subscription period in the rights offering, which is expected to begin on 23 December 2013 at 00:00 midnight CET and end on 9 January 2014 at 24:00 midnight CET. The subscription rights to the New Shares (ISIN DE000A0H5ZX5 / WKN A0H 5ZX) are expected to be traded during the period from 23 December 2013 up to and including 7 January 2014 on the regulated market (XETRA Frankfurt Specialist) under the ticker symbol PA8B on the Frankfurt Stock Exchange. A U.S. institutional investor has agreed with the Company and Close Brothers Bank AG - subject to certain conditions - the obligation to purchase all New Shares that are not subscribed by existing shareholders or other investors in the rights offering at the subscription price. For further details on the capital increase with subscription rights, please see the subscription offer provisionally planned to be published in the electronic Federal Gazette on 20 December 2013 and on the website of PAION AG (www.paion.com). Furthermore, the Company plans to issue up to 2,536,077 additional shares in a private placement under exclusion of subscription rights of the shareholders at the beginning of February 2014. In the private placement the U.S. institutional investor commits to PAION AG to purchase at least 120% of the amount which he has invested in the acquisition of shares in connection with the rights offering. In addition the U.S. institutional investor has the option to subscribe for new shares up to a total amount of EUR 6.0 million in this private placement. The issue price for the private placement is expected to be at a discount of 5 % of the volume-weighted average price (VWAP) for PAION shares in XETRA trading on the Frankfurt Stock Exchange, during a market standard trading period and prior to the company decision for the private placement. PAION will receive gross proceeds of EUR 4.99 million for the capital increase with subscription rights. The amount of the proceeds from the private placement will depend on the size of the subscription by the U.S. institutional investor. The capital increase will increase PAION's financial freedom to operate. The proceeds of the transaction will be used mainly for the preparation of the Remimazolam Phase III development program. Specifically it is intended to use the funds to produce the trial medication and validate the production at market scale. In this transaction, Close Brothers Seydler Bank AG (Germany) acts as the execution agent. Blättchen Financial Advisory GmbH will act as the financial advisor to PAION on the transaction. ### About PAION PAION AG is a publicly-listed biotech company headquartered in Aachen, Germany with a second site in Cambridge, UK. The company has a track record in developing hospital-based treatments for which there is substantial unmet medical need. PAION AG is transforming its business model from a pure development company to a specialty pharmaceutical company with a focus on anaesthesia products to take advantage of the unique profile of its main compound, Remimazolam. Contact Ralf Penner Director Investor Relations / Public Relations PAION AG Martinstrasse 10-12 52062 Aachen - Germany Phone: +49 241 4453-152 E-mail: r.penner@paion.com www.paion.com Disclaimer: This release contains certain forward-looking statements concerning the future business of PAION AG. These forward-looking statements contained herein are based on the current expectations, estimates and projections of PAION AG's management as of the date of this release. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors. Should actual conditions differ from the Company's assumptions, actual results and actions may differ materially from any future results and developments expressed or implied by such forward-looking statements. Considering the risks, uncertainties and other factors involved, recipients should not rely unreasonably upon these forward-looking statements. PAION AG has no obligation to periodically update any such forward-looking statements to reflect future events or developments. This release does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of PAION AG in the United States or any other jurisdiction. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. The securities of PAION AG may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the 'Securities Act'). The securities of PAION AG have not been, and will not be, registered under the Securities Act. 17.12.2013 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: PAION AG Martinstr. 10-12 52062 Aachen Germany Phone: +49 (0)241-4453-0 Fax: +49 (0)241-4453-100 E-mail: info@paion.com Internet: www.paion.com ISIN: DE000A0B65S3 WKN: A0B65S Listed: Regulierter Markt in Frankfurt (General Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------