SCHEDULE: LakeShore Biopharma to Go Private in $0.9/Share Merger

LakeShore Biopharma Co., Ltd. announced a definitive merger agreement to be acquired by Oceanpine Skyline Inc. for $0.90 per ordinary share in cash, taking the company private.

Summary

• A Merger Agreement was entered into on November 4, 2025, between LakeShore Biopharma Co., Ltd. (Issuer), Oceanpine Skyline Inc. (Parent), and Oceanpine Merger Sub Inc. (Merger Sub).
• Merger Sub will merge with and into the Issuer, resulting in the Issuer becoming a wholly-owned subsidiary of Parent.
• Each ordinary share of the Issuer, with a par value of US$0.0002 per share, will be cancelled in exchange for US$0.90 in cash per share, without interest and net of applicable withholding taxes, except for Excluded Shares and Dissenting Shares.
• The total estimated funds required to complete the merger are approximately US$21,000,000.
• The merger will be financed by a cash contribution of US$17,302,071.6 from Oceanpine Capital Inc. (Sponsor) to Parent, as outlined in an Equity Commitment Letter.
• A group of shareholders, including Oceanpine Capital, Oceanpine Investment, Crystal Investment, Adjuvant Fund, Adjuvant Fund DE, Superstring Capital, MSA Growth, and Epiphron Capital (collectively, the Rollover Shareholders), have agreed to cancel their shares for no cash consideration and receive newly issued shares in Parent.
• Post-merger, the Rollover Shareholders are expected to hold 53.35% of the voting rights in Parent, while the Sponsor will hold 46.65%.
• The consummation of the merger is subject to approval by an affirmative vote of holders representing at least two-thirds of the voting power of the outstanding ordinary shares.
• Upon completion, the Issuer's ordinary shares will cease to be quoted on the OTC Pink Open Market and will be eligible for termination of registration under the Securities Exchange Act of 1934.

Sentiment

Score: 6

Explanation: The filing announces a definitive take-private merger agreement, providing a clear cash exit for public shareholders at a specified price. While it offers certainty and liquidity, it also removes the company from public trading, limiting future upside for non-rollover shareholders. The transaction is well-structured with committed financing and significant shareholder support, suggesting a high likelihood of completion.

Positives

• The merger provides a clear cash exit at US$0.90 per share for non-rollover shareholders, offering immediate liquidity and certainty of value.
• The merger is not subject to any financing conditions, indicating a high degree of certainty regarding the availability of funds for the transaction.
• Significant shareholder support is evidenced by the Rollover Shareholders agreeing to vote their shares in favor of the merger and roll over their equity into the private entity.

Negatives

• Public shareholders who do not roll over their shares will no longer participate in any potential future growth or appreciation of LakeShore Biopharma as a publicly traded company.
• The offer price of US$0.90 per share may be considered low by some investors, potentially below their perceived intrinsic value or prior trading levels.
• The company's ordinary shares will be delisted from the OTC Pink Open Market, removing public trading access and transparency.

Risks

• The merger requires approval by at least two-thirds of the voting power of the outstanding ordinary shares, and failure to obtain this approval could prevent the transaction.
• Shareholders who dissent from the merger in accordance with Cayman Islands law may be entitled to receive the fair value of their shares, which could lead to valuation disputes and legal proceedings.
• The Merger Agreement contains conditions to closing and termination rights, meaning the transaction could still be terminated under certain circumstances.
• Potential for legal challenges or disputes related to the merger terms, shareholder rights, or the enforcement of various agreements (e.g., Limited Guarantee, Equity Commitment Letter).

Future Outlook

Upon the consummation of the merger, LakeShore Biopharma Co., Ltd. will become a privately held, wholly-owned subsidiary of Oceanpine Skyline Inc. Its ordinary shares will cease to be quoted on the OTC Pink Open Market, and its registration under the Securities Exchange Act of 1934 will be terminated.

Management Comments

• The Limited Guarantee was executed by Jutao (Adam) Zhao, Chairperson of the Special Committee of the Board of Directors, indicating the Special Committee's involvement and approval of the guarantee terms.

Industry Context

NA

Corporate Governance

Legal Proceedings

• The Limited Guarantee includes provisions for the Guarantor (Oceanpine Capital Inc.) to pay reasonable and documented out-of-pocket expenses (including legal fees) incurred by the Guaranteed Party (LakeShore Biopharma) in connection with enforcing its rights if the Guarantor fails to make payments or challenges the guarantee's validity.
• The Equity Commitment Letter and Support Agreement include provisions for specific performance or injunctive relief in case of breach, indicating potential for legal enforcement if obligations are not met.
• Shareholders exercising dissenters' rights under Cayman Islands law could initiate legal proceedings to determine the fair value of their shares, potentially leading to judicial valuation.

Related Party Transactions

• Oceanpine Capital Inc. (Sponsor) is providing equity financing to Parent and is also a Rollover Shareholder, participating in the consortium.
• Huaqin Xue, a director of Crystal Peak Holdings Inc. and Crystal Peak Investment Inc., is the sole shareholder of Crystal Peak Holdings Inc., which wholly owns Crystal Peak Investment Inc., a Rollover Shareholder.
• Dave Liguang Chenn, a reporting person, is the managing partner of Oceanpine Investment Fund II LP and Oceanpine Capital Inc., both of which are involved as Rollover Shareholders or the Sponsor.
• Various investment funds (Adjuvant Global Health Technology Fund, MSA Growth Fund II, Superstring Capital Master Fund, Epiphron Capital (Hong Kong) Limited) are participating as Rollover Shareholders in the consortium.
• The Interim Investors Agreement governs the relationship among the Consortium Members (including the Sponsor and Rollover Shareholders), Parent, and Merger Sub, outlining their coordinated actions for the merger.

Stakeholder Impact

• **Shareholders (non-rollover):** Will receive US$0.90 cash per share, providing a definitive exit and liquidity, but ending their equity participation in the company's future.
• **Shareholders (rollover):** Will exchange their shares for equity in the private parent company, maintaining an investment in the company's future, but transitioning from a public to a private ownership structure.
• **Company (LakeShore Biopharma):** Will become a private entity, no longer subject to public reporting requirements, and will operate as a wholly-owned subsidiary of Oceanpine Skyline Inc.
• **Employees:** No direct impact on employees is explicitly mentioned in the filing, but a take-private transaction can sometimes lead to operational or structural changes within the company.

Next Steps

• A shareholders meeting of the Issuer will be held to vote on the authorization and approval of the Merger Agreement and the transactions, requiring at least two-thirds of the voting power of outstanding ordinary shares.
• Consummation of the merger, subject to the satisfaction or waiver of conditions set forth in the Merger Agreement.
• Cancellation of ordinary shares (excluding Excluded and Dissenting Shares) and payment of US$0.90 cash per share to eligible shareholders.
• Issuance of newly issued shares in Parent to the Rollover Shareholders in exchange for their cancelled shares.
• Termination of registration of the Issuer's ordinary shares pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934.
• Cessation of quotation of the Issuer's ordinary shares on the OTC Pink Open Market.
• Negotiation and execution of a Shareholders Agreement among the Investors concurrently with the Closing, which will govern equity interests in Parent and board composition.

Key Dates

Recommendation

The definitive merger agreement offers US$0.90 per share in cash, providing a clear exit strategy and immediate liquidity for public shareholders. Given the company's impending delisting from the OTC Pink Open Market and transition to a private entity, non-rollover shareholders should consider selling their shares to realize the cash consideration. Rollover shareholders are committing to the private entity, indicating their long-term view, but for public market investors, the opportunity for further public market appreciation is removed.

Keywords

LakeShore Biopharma, Merger, Take-private, Oceanpine Skyline, Schedule 13D, Biopharma, Equity Commitment, Rollover Shares, Shareholder Approval, OTC Pink Market, Corporate Governance