BIOSTAR PHARM-B(02563): The legal advisor has issued a debt claim letter to LFM Oversea Investment Limited.

BIOSTAR PHARM-B (02563) announces that as of the date of this announcement, the company's wholly-owned subsidiary, Biostar Pharma, Inc. (US-Biostar), used its own idle funds to subscribe to the LFM Oversea Investment Fund SPC's independent investment portfolio, the LFM Stable Income Fund SP (sub-fund), for $5 million on November 29, 2024. The fund is an exempted company registered under the laws of the Cayman Islands and registered as an independent investment portfolio company. The LFM Fund is managed by a third party independent of the company and its related parties. The company completed the subscription on November 28, 2024, and the investment is expected to mature on November 29, 2025. The company submitted a redemption request on January 21, 2025. According to the LFM Fund manager, the LFM Fund previously subscribed to notes from Global Peace International Limited (Global Peace) for $5 million, which will mature in March 2026, and the corresponding funds have been paid to Global Peace. As of the date of this announcement, the investment cannot be redeemed as the funds have not been recovered from Global Peace. Prior to this, the company has communicated with LFM Fund multiple times regarding the early redemption of the fund and has formally submitted a redemption request. However, these requests have not been responded to or processed in a timely manner. In view of this, the company plans to take legal action to advance the redemption process of the fund, and on May 2025, the company appointed Conyers Dill & Pearman LLP as its legal advisor to pursue the winding-up and receivership proceedings of the LFM Fund under Cayman Islands law. The company's legal advisor submitted a petition to the Grand Court of the Cayman Islands (Financial Services Division) on September 12, 2025, seeking the appointment of a receiver for the LFM Stable Income Fund SP (sub-fund) under section 224 of the Companies Law (2025 Revision) of the Cayman Islands. Notices regarding the receivership proceedings of the LFM Fund were published on November 5, 2025, in the Cayman Islands, Hong Kong, and mainland China. The receivership application of the LFM Fund was heard in the Cayman Islands on November 19, 2025, and a decision by the court on whether a court-appointed receiver should wind up the LFM Fund is expected to be made within two weeks. If a receiver is appointed, the existing management or general partners will no longer control the LFM Fund. US-Biostar, as a redeeming investor, will formally become a creditor of the LFM Fund, and the receiver will liquidate the fund's assets to pay the redemption proceeds owed to US-Biostar. Additionally, on November 21, 2025, the company's legal advisor issued a statutory demand for payment to the sole shareholder of the LFM Fund manager, LFM Oversea Investment Limited, requesting it to fulfill joint guarantee responsibility for the redemption of the LFM Fund in accordance with the terms of the subscription agreement and commitment letter.