Beijing Strong Biotechnologies, Inc. (300406.SZ) announced that its equity investee Zhongke Natai plans to implement an equity restructuring.

Beijing Strong Biotechnologies, Inc. (300406.SZ) announced that the company recently received notice from Zhongke Natai. Due to Zhongke Natai's tight operating capital, and because its original Series A1 investor, Hangzhou Junze No. 1 Enterprise Services Partnership (Limited Partnership) (hereinafter referred to as "Junze No. 1"), has initiated arbitration over equity repurchase matters (the repurchase price involved is RMB 8 million), in order to properly resolve Junze No. 1's exit, resolve its operational difficulties, and facilitate subsequent financing, Zhongke Natai plans to implement an equity restructuring plan. Under this plan, the company intends to subscribe for an additional RMB 26,212 of Zhongke Natai's registered capital at a price of RMB 1 per RMB 1 of registered capital, with a total subscription price of RMB 26,212, all of which will be recorded as registered capital. As part of the overall arrangement for this equity restructuring, the company and other original investors agree to waive the repurchase rights and rights of first refusal under the Shareholders' Agreement signed by all parties in November 2021. After the completion of this restructuring, the company will hold 6.3520% of Zhongke Natai's equity. The source of funds for this transaction is the company's own funds. This equity restructuring is conducive to properly resolving the exit of Zhongke Natai's original investors and the arbitration dispute, stabilizing its equity structure, and creating conditions for its subsequent financing. Given that Zhongke Natai currently faces tight operating capital, even if the company exercises its repurchase claim right, it would face recovery risks. After careful evaluation, participating in this restructuring and obtaining compensatory capital increase at a nominal consideration is a realistic choice to safeguard the company's existing investment value. The circulating tumor cell in vitro diagnostics field in which Zhongke Natai operates has synergies with the company's core in vitro diagnostics business, and this restructuring is in line with the company's overall development strategy.