One-paragraph understanding: VENUS MEDTECH-B(02500) Announcement on Major Findings of Review of Use of Proceeds

On September 2, 2024, Hangzhou Qiming Medical Devices Co., Ltd. (02500) issued an announcement reviewing the past use of funds raised by the company's stock offering (including proceeds from initial public offerings and two additional offerings) from December 1, 2019 to December 31, 2023 (referred to as the "period"). The purpose of this announcement is to meet the requirements for resumption of trading and to provide an update on the progress of the company in meeting the five resumption guidelines of the Hong Kong Stock Exchange, which is part of the routine work for resumption of trading. The company's stock has been suspended from trading on the Hong Kong Stock Exchange main board since November 23, 2023. During this period, the company has been actively communicating with the Stock Exchange and taking various measures to meet the five resumption guidelines, in order to resume trading as soon as possible. The latest announcement on September 2 further disclosed the progress of the first of the five resumption guidelines set by the Stock Exchange: The investigation into the source of unauthorized trading funds disclosed by the company on February 25, 2024 has been further carried out in this announcement. The amount of unauthorized trading funds matches the total amount of unauthorized trading funds disclosed in the announcement on February 25, 2024, and there have been no additional unauthorized funds transactions. The source of the unauthorized trading funds has been clarified in this announcement, boosting investor confidence. In addition, the announcement on September 2 further disclosed the usage of the funds raised. Out of the total amount, 1.5 billion was used to lend to JiangSu WuZhong Pharmaceutical Development and the remaining amount was not utilized for unauthorized guarantee to Hangzhou Kuntai. It is worth noting that in the company's interim report released on August 30, 2024, it was stated that there is still an outstanding loan of RMB 80 million to JiangSu WuZhong Pharmaceutical Development. The company has also filed an arbitration application in Hangzhou, China against the related parties to recover the debts. The lack of documentation for transactions is done to strengthen internal audit compliance and is not related to unauthorized trading. The total amount of undocumented transactions is 400 million yuan and is unrelated to the unauthorized trading funds of 2.4 billion yuan. It is due to limitations such as geographical location, closure of overseas entities, and language issues that the necessary documentation could not be obtained during the investigation. The company has taken remedial actions in several aspects based on the above situations including reviewing the loan deliberation and disclosure by the directors and management, improving the company's authorization and management system, and establishing an internal audit and compliance department. The resumption work is steadily progressing and the company is working towards meeting all resumption conditions to resume trading as soon as possible. In conclusion, the disclosure in the announcement on September 2 demonstrates the company's proactive attitude and further actions in resuming trading. Despite the challenges, the company is working towards resuming trading soon.