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Shareholders Meeting - Official Responses of Chairman Iliya Shpurov

RAFA Rafarma Pharmaceutical

ISIN (CUSIP) Number 75062C100

ID 012-000631222

203 South Main Street, Suite 3000

Sheridan, Wyoming, 82801, USA

+1 (307) 429-2029

Dear Shareholders, 

Due to certain misunderstandings that occurred due to technical troubles and several mistranslations during the Zoom meeting on December 18th. 2023, we are publishing the official responses of Company Chairman Iliya Shpurov as they were meant to be delivered in the English language during the conference. 

Subjects that were discussed: 

  • Audit. Due to the auditor's sudden loss of compliance with professional standards, it was decided to change the auditor. In this regard, the company is in the process of signing a new agreement with a new USA auditor. In terms of readiness, the company is also trying to complete it by the end of the 1st quarter of 2024.

  • Questions from shareholders:

1. When the Chairman says he is putting in 2 $billion of assets into the company in the next 2 years what type of assets does he mean? Pharmaceutical assets, Real estate? Etc.

This is not our investment, but our goal of capitalizing the company. That's what we said. We are trying to achieve the capitalization of the company in this amount.

2. Are these assets going to add substantial revenue to the bottom line of the company?

Yes. All efforts are aimed at providing the company with sufficient real cash flow. We also mean the advantages of production in Sri Lanka and Hong Kong. 

3. If an individual wanted to start accumulating a position in Rafarma stock would you advise him to buy now or wait until the audit is complete? 

I am not a licensed Investment Advisor and therefore cannot give such advice. Moreover, no personal opinion should be taken into account in this matter. Rafarma is committed to delivering the highest possible shareholder value, whether the company is audited or not.

4. What is the percentage in sales, and profit margin for the German and Chinese companies?

We do not have any assets in Germany. You are most likely confused with BEBIG GMBH - this is a company in Germany, to which Rafarma has no direct relation. The benefit resulting from the changes we implement is expected to be significant and will be announced to our shareholders in subsequent reports.

5. On the account payables there is seven million left to pay, who is that owed to?

Rafarma currently uses alternative reporting standards. The statements are combined financial statements and by definition include data on the various assets within the group, which in turn have current assets and current liabilities within their own business and operating activities.

6. The two billion injected into the company will reflect on the assets or balance sheets?

Everything that will be invested will be reflected in the reporting. Only actually invested assets with valuation and monetary amounts will be reflected. 

7. There is in place a share buyback program for the company?

The company is planning this, but a specific date is still unknown. This doesn't mean there won't be a buyback in 2024. As previously explained, the company is implementing numerous programs designed to take the company to a new level of business, independent of the Russian assets on which the initial development was based. These programs are currently underway and require significant investment. In these conditions, investments are at the top of our priorities, as they will ensure maximum growth in share price, liquidity and capitalization. At the same time, we understand that due to recent geopolitical events, the market price of the shares is sharply depressed. Consequently, the company intends to implement a buyback program as soon as the company's revenues allow its management to allocate the necessary funds for it. Everything regarding this program will be officially announced soon.

8. Rafarma recently announced an agreement with Sri Lanka Co Kelun Lifescience. What is the long-term revenue potential for such a partnership?

Sri Lanka was chosen because it has the lowest production costs and there are enough specialists in the field of pharmacology and medical technology. There is also experience in registering pharmaceutical companies with the FDA. Thus, we are trying to build a new production facility at a minimal cost. All this is being done as part of a new strategy designed to meet changing geopolitical rules and maximize shareholder value and market capitalization. The long-term earnings potential is expected to be proportionate to the company's growth as a result of the opening of new markets through our operations in Sri Lanka.

9. How does Ilya see the company reaching $2 billion in assets as stated in his press release?  The process of growing over the next two years? 

Our efforts will be aimed at introducing advanced technologies on the one hand and transferring production to countries with low labour costs on the other hand. At the same time, we strive to maintain our competence in the production of pharmaceuticals. However, I must say that $2 billion is an assumption. We cannot guarantee shareholders that the value will be exactly that. We describe this not as a projection, but as our goal. We are currently aiming for a capitalization of $2 billion and are doing everything possible to achieve this.

10. Does Ilya intend to support the company with any form of stock repurchase plan?

As mentioned earlier, we are unable to announce a buyback program at this time. At the same time, this is incredibly important to us, and we are closely monitoring the situation, especially given the current undervalued market for the company's common shares. We are currently investing in the company for its development, for its assets and for the competition with other companies on the market. First, we must protect the capital of the company and make every effort so that the company can develop. So we must first develop the company's business. We cannot spread the resources we have between open market operations and developing the company's business. We must develop the company's business so that it increases its value. We cannot do the rest now, but we will do it in the future.

11. Is 2024 the time frame in which the company will pursue an uplisting to a stock exchange? 

I don’t fully understand what kind of uplisting is being discussed in the question. The company plans to complete its PCAOB audit in 2024, which will allow us to move to consolidated financial reporting in our reports. Once the audit is complete, we will continue filing Form 10 as originally planned. We regret that geopolitical circumstances delayed the submission of this application for so long. Unfortunately, the company could not in any way foresee or influence these circumstances. On the other hand, we believe that the company is doing well in preparing Form 10.

12. What opportunities you are currently focusing on besides Sri Lanka? 

We work in several directions at once. The first direction is that we are working in Hong Kong to build a plant related to the production of radiopharmaceuticals. We have quite serious contacts with Chinese companies that are ready to place orders with us and purchase products. The plant will be built when we complete the deal and acquire the land we need for the plant. We also announced that we have signed an agreement with Hong Kong company Long Shell about this project. We are currently working with them on this project and next year we will be able to show the results. We are also working with the localization of our microspheres, which we own - these are patented drugs for the treatment of liver cancer in Europe and Korea. We are working on this with our partners in Europe and Korea. We are also conducting serious research in the field of fundamentally new devices for cancer therapy. And when we complete prototypes of these installations, we will share the results. We also entered into an agreement with the University of El Salvador on smart packaging and related biotech drugs to demonstrate our new logistics project in this small country and to show that this approach to technology works and has a chance of success in the USA.

13. What is that company doing to promote itself and create buying stocks from retail buyers and institutions? 

As we discussed previously, we believe that institutional investors will be able to join us upon filing Form 10. In addition, we are doing our best to become more accessible to the public, promote transparency, and provide as much relevant information as possible. We are currently revamping the company's website to better reflect the company's activities. The current website does not reflect our needs. The new version of our website should be completed soon. Secondly, we will regularly inform shareholders and the market about the company’s activities and all important news. We will also be making several market presentations on specific projects in which we are currently involved. We believe this approach will demonstrate our true value to our current and potential investors. We also intend to share additional information about our work with direct investors of the project.

14. In addition to the completion of the audit, what else are you hoping to be able to announce in 2024? 

We hope to announce a change in the status of all our projects and demonstrate to the public the devices we have created. We intend to improve the reporting situation and move to consolidated reporting. We want to create more partners who would offer our new and old products in new markets. Which, in turn, will lead to the creation of new values.

15. After the audit is completed, when will you be going to the Nasdaq listing? 

As stated above, we are committed to doing this as soon as possible. For us to submit an uplisting to Nasdaq, we first need to implement the requirements that Nasdaq provides for the company. This takes several months. For example, this is the Sarbanes-Oxley law, SOX. I do not consider it realistic to achieve an increase in shares on Nasdaq in 2024. If we pass the audit now, we can do uplisting on the OTSQB, but immediately uplisting on Nasdaq is unrealistic because it is too large an amount of work for 2024. What's realistic for us in 2024 looks like this: first audit, then so-called Form 10, then OTCQB.

16. What products do you anticipate producing at the Sri Lanka facility? 

Anticancer, anti-inflammatory and hormonal drugs in solid forms. Some drugs for theranostics and nuclear medicine. Also, radiopharmaceutical drugs.


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