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Internal Information Regulations

Chapter 1: General Provisions


Article 1 [Purpose]

In accordance with the Financial Investment Services and Capital Markets Act (hereinafter referred to as the “Act”) and other laws and regulations, the purpose of these regulations is to set forth the matters related to the comprehensive management and appropriate notification of the Company's internal information for implementing prompt and accurate public disclosure and for preventing insider trading by executives and employees.


Article 2 (Definition of Terms)

① The "internal information” in these regulations refers to the matters reported under Part 1 of the KOSDAQ Market Disclosure Regulations (hereinafter referred to as “Disclosure Regulations”) of the Korea Exchange (hereinafter referred to as the “Exchange”) and other management or asset-related circumstances of SD Biotechnologies that may influence an investor's investment judgment.
② In these regulations, the “Disclosure Officer” refers to the person who can fulfill reporting duties on behalf of SD Biotechnologies in accordance with Article 2(4) of the disclosure regulations.
③ Here, “Executive Officer” refers to a director (including the person falling under any subparagraph of Article 401-2(1) of the Commercial Act) and an auditor.
④ In addition to Paragraphs 1 through 3, the definitions of terms used in these regulations shall be governed by the definitions of terms used in the relevant laws and regulations.


Article 3 (Scope of Application)

Matters related to disclosure, insider trading, and internal information management are subject to these regulations, except as stipulated in the relevant laws or the articles of incorporation.


Chapter 2 Management of Internal Information


Article 4 (Management of Internal Information)

① Executives and employees shall strictly manage the internal information of SD Biotechnologies of which they become aware in the course of their work, and shall not disclose internal information either inside or outside of the Company, except in cases where it is necessary for business.
② The CEO shall take necessary measures for the management of internal information, such as setting specific standards for the storage, delivery, and destruction of internal information and related documents.


Article 5 (Disclosure Officer)

① The CEO shall designate a Disclosure Officer and report it to the Exchange without delay. The same shall apply when the Officer is replaced.
② The Disclosure Officer oversees the work related to the establishment and operation of the internal information management system and performs the following tasks:
1. Execution of disclosure
2. Inspection and evaluation of the operating status of the internal information management system
3. Review of internal information and determination of whether to disclose it
4. Measures necessary for operating the internal information management system, such as training of executives and employees.
5. Directing and supervising departments, executives, and employees in charge of internal information management or disclosure.


Article 6 (Disclosure Manager)

① The CEO shall designate a Disclosure Manager and report it to the Exchange without delay. The same shall apply when the Manager is replaced.
② The Disclosure Manager shall be under the direction of the Disclosure Officer in relation to internal information management, and shall perform the following tasks:
1. Collection and review of internal information and reporting regarding the Disclosure Officer
2. Tasks necessary for enforcing public disclosure
3. Confirmation of matters necessary for management of internal information, such as changes in disclosure-related laws, and reporting regarding the Disclosure Officer
4. Other matters as deemed necessary by the CEO or Disclosure Officer


Article 7 (Concentration of Internal Information)

① The executives and heads of each department shall provide information related to any of the following to the Disclosure Officer in a timely manner:
1. When internal information occurs or is expected to occur
2. When a reason occurs or is expected occur that requires cancellation or change of previously disclosed information from among the internal information
3. In other cases where there is a request from the Disclosure Officer
② The Disclosure Officer and the CEO shall efficiently establish an information delivery system within SD Biotechnologies for the timely provision of internal information pursuant to Paragraph 1, and, where necessary, receive the cooperation of the Disclosure Officer in the approval process for duties related to disclosure obligations.


Article 7-2 (Management of Information in Relation to the Largest Shareholder)

The Disclosure Officer shall fully explain the relevant facts to the largest shareholder and establish an information delivery system so that relevant information can be delivered in a timely manner in order to smoothly execute the duties regarding the disclosure obligations and the requirements of disclosure upon inquiry in relation to the largest shareholder.


Article 7-3 (Internal Information Concentration of Subsidiaries)

① In the event that internal information related to disclosure obligations occurs or is expected to occur in a subsidiary, the Company shall have the subsidiary immediately notify the Disclosure Officer or Disclosure Manager
② In order to efficiently manage the internal information related to disclosure obligations pursuant to Paragraph 1, SD Biotechnologies shall designate a person to be in charge of disclosure-related information in the subsidiary company. When this person is designated or replaced, it shall be reported immediately to the Disclosure Officer or Disclosure Manager of the Company.
③ SD Biotechnologies may request its subsidiaries to submit related data to the extent necessary for disclosure.


Article 8 (Providing Internal Information Outside the Company)

① In the event that an executive or employee unavoidably needs to provide inside information to an SD Biotechnologies counterparty, external auditor, agent, or persons who have entered into an advisory contract for legal or management advice, the related matters shall be reported to the Disclosure Officer.
② In the case of Paragraph 1, the Disclosure Officer shall take the necessary measures, such as signing a confidentiality contract regarding the related internal information.
③ When a fair disclosure obligation arises while providing internal information pursuant to Paragraph 1, it shall be disclosed without delay (except for cases falling under exceptions to the application of Article 15 of the Disclosure Regulations).


Chapter 3 Disclosure of Internal Information


Article 9 (Types of Disclosure)

SD Biotechnologies disclosures are classified as follows:
1. Reporting and disclosure of major management matters pursuant to Part 1, Chapter 2, Section 1 of the Disclosure Regulations
2. Inquiry and disclosure pursuant to Part 1, Chapter 2, Section 2 of the Disclosure Regulations
3. Fair disclosure pursuant to Part 1, Chapter 2, Section 3 of the Disclosure Regulations
4. Voluntary disclosure pursuant to Part 1, Chapter 3 of the Disclosure Regulations
5. Submission of securities declarations pursuant to Part 3, Chapter 1 of the Act
6. Submission of periodic reports pursuant to Articles 159 through 160 of the Act and Part 1, Chapter 2, Section 4 of the Disclosure Regulations
7. Submission of reports on major issues under Article 161 of the Act
8. Other disclosures pursuant to other laws


Article 9-2 (Confirmation of the Subject Matter of Disclosure)

In judging whether disclosure obligations, including fair disclosure, are applicable in accordance with these regulations, care must be taken to include matters that have a significant impact on stock prices or investment decisions pursuant to Article 6 (1) 4 of the Disclosure Regulations.


Article 10 (Execution of Disclosure)

① The Disclosure Manager shall compose the necessary contents, prepare the necessary documents and report to the Disclosure Officer when any disclosure matters specified in Article 9 occur.
② The Disclosure Officer shall review whether the contents and documents in Paragraph 1 are not in violation of the relevant laws and report to the CEO before disclosing them


Article 10-2 (Prompt Implementation of Disclosure)

When a disclosure matter occurs pursuant to Article 9, the Disclosure Officer shall make every effort to ensure that the relevant internal information is disclosed in a timely manner, even before the disclosure deadline.


Article 11 (Follow-Up Measures after Disclosure)

In the event of any errors or omissions in the disclosed information, or if there is a need to cancel or change the disclosure, the Disclosure Officer and Disclosure Manager must take measures to correct it without delay, such as by disclosing the correction pursuant to Article 30 of the Disclosure Regulations.


Article 12 (Coverage by the Media)

① When there is a request for coverage of SD Biotechnologies from the press in principle, the CEO or Disclosure Officer shall respond. If other executives or employees are to respond to the media request, they must obtain prior approval from the CEO or Disclosure Officer.
② Where SD Biotechnologies intends to distribute press releases to the media, it shall consult with the Disclosure Officer. Where necessary, the Disclosure Officer shall report matters related to the press release distribution to the CEO.
③ If the content of the press release to be distributed pursuant to Paragraph 2 falls under an item subject to fair disclosure, the Disclosure Officer shall publicly announce it before distributing the press release.
④ Executives and employees who become aware that the media reports differ from the facts must report it to the Disclosure Officer, who in turn must report it to the CEO and take the necessary measures.


Article 12-2 (Confirmation of Media Content)

The Disclosure Officer, the Disclosure Manager, and the department generating internal information shall routinely check company-related media articles, and in the event of any discrepancies from facts, measures must be taken to correct them.


Article 13 (Company Briefings)

① The CEO shall recognize that IR activities are the management responsibility of KOSDAQ-listed corporations, and shall endeavor to build trust with investors by holding company briefings on a voluntarily and ongoing basis.
② Company briefings regarding management details, business plans and prospects shall be held in consultation with the Disclosure Officer.
③ The Disclosure Officer or Disclosure Manager shall disclose the company briefing date, place, and contents by the day before the event, and shall post related materials on the disclosure submission system of the Exchange before the actual briefing.
④ All executives and employees of SD Biotechnologies must take precautions so as not to disclose information that has not been disclosed in advance from among the information subject to fair disclosure during the company briefing session.


Article 13-2 (Rumors)

① If rumors are circulating in the market, the Disclosure Officer shall verify whether the rumors are true and whether they correspond to internal information by means of opinion inquiries of the relevant business departments.
② As a result of the confirmation following from Paragraph 1, if the rumor falls under the disclosure obligations pursuant to the Disclosure Regulations, the relevant information must be disclosed.


Article 13-3 (Request for Provision of Information)

① In the event of a request for disclosure of company-related information from shareholders and stakeholders, the Disclosure Officer shall determine whether to provide the related information by reviewing the legality of the request.
② The Disclosure Officer may listen to the opinions of the legal department or external legal experts regarding whether the information requested for provision may affect investors' investment judgment and stock prices in order to decide whether to provide said information.
③ Article 12(3) shall apply mutatis mutandis when information is provided in accordance with the decision of Paragraph 1.


Chapter 4 Regulations on Insider Trading


Article 14 (Return of Profits from Short-Term Trading)

① When the executives and employees as prescribed in Article 172(1) of the Act and Article 194 of the Enforcement Decree of the Act purchase specific securities (hereinafter referred to as “specific securities”) under Article 172(1) of the Act and sell them within 6 months or purchase specific securities within 6 months of selling them and obtain a profit (hereinafter referred to as “short-term trading profit”), said profits shall be returned to SD Biotechnologies.
② When a shareholder of SD Biotechnologies (including those who hold equity securities or depository securities other than stock certificates; hereafter the same shall apply in this Article) makes a request of the Company to call for the return of short-term trading profits from a person who has acquired short-term trading profits pursuant to Paragraph 1, SD Biotechnologies shall take the necessary measures within two months from the date of receipt of the request.
③ When the Securities and Futures Commission notifies SD Biotechnologies of the occurrence of short-term trading gains under Paragraph 1, the Disclosure Officer shall, without delay, disclose each of the following matters on the Company's website.

1. Position of the person required to return the short-term trading profits
2. Short-term trading profit amount
3. The date on which the Securities and Futures Commission notified the short-term trading gains
4. Short-term trading profit return claim plan
5. A shareholder of SD Biotechnologies may make a request of the Company to call for the return of the profit from short-term trading from the person who has earned such profit. If SD Biotechnologies does not make a claim within two months from the date of receiving the request, the shareholder can make the claim on behalf of the Company.
④ The period of disclosure under Paragraph 3 shall be two years from the date of notification of the occurrence of short-term trading gains from the Securities and Futures Commission, or the date on which short-term trading gains are returned, whichever comes first.


Article 15 (Notification of Sales of Specific Securities)

Executives and employees, as stipulated in Article 172 (1) of the Act and Article 194 of the Enforcement Decree of the Act, shall notify the Disclosure Officer of the fact in any case of trading or other transactions of specific securities.


Article 16 (Prohibition of Use of Material Nonpublic Information)

Executives and employees shall not use, or allow others to use, any material nonpublic information (including material nonpublic information of affiliates) as prescribed in Article 174 of the Act for the sale of specific securities or other transactions.


Chapter 5 Supplement


Article 17 (Training)

① The Disclosure Officer and Disclosure Manager shall complete their training regarding disclosure duties pursuant to Articles 36 and 44 (5) of the Disclosure Regulations, and the Disclosure Officer shall inform the relevant executives and employees of the contents of the training.
② The CEO shall make sufficient efforts to provide training to executives and employees so as to prevent insider trading as prescribed in Articles 14 through 16 and other laws.


Article 18 (Application and Abrogation of Regulations)

Amendment or abrogation of this regulation shall be made by the CEO.


Article 19 (Publication of Regulations)

These regulations are published on the SD Biotechnologies internal business notice board. The same shall apply when the regulations are amended.


Addendum


Article 1 (Enforcement Date)

These regulations were enacted for the purpose of internal information management in accordance with Article 45 of the KOSDAQ Market Disclosure Regulation, and the effective date is after the listing date.


Article 2 (Amendment Date)

These regulations shall enter into effect from the date of amendment. (June 1, 2017)




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