Venus Medtech (Hangzhou) Inc. has signed a Subscription Agreement with Hangzhou Yingzhiqin No. 3 Equity Investment Partnership (the Subscriber) to secure up to HK$578.58 million (approximately RMB 500.00 million) through a combined issuance of new shares and convertible bonds, subject to shareholder approval at an extraordinary general meeting on 30 September 2026.
Key Transaction Terms • Equity placement: 184.54 million new H or Domestic Shares at HK$1.078 per share, raising HK$198.93 million. • Discount: 7.9 % to the 10 September 2026 closing price of HK$1.170. • Share dilution: new shares equal 41.8 % of current issued capital and 29.5 % post-issuance. • Convertible bonds: up to HK$379.65 million, coupon 5 % p.a., 364-day tenor (extension possible). Initial conversion price set at HK$1.1858, 1.4 % above the last close and implying up to 320.17 million conversion shares (72.6 % of current share base). • Combined theoretical dilution under Listing Rule 7.27B: 3.6 %. • Lock-up: three-month restriction on disposals of both subscription and conversion shares. • Security: designated core PRC patents pledged to the investor until bond conversion or repayment.
Conditions and Timeline Completion hinges on shareholder approval, Hong Kong Stock Exchange listing consent for new H-shares and conversion shares, and PRC outbound investment (ODI) filings. A long-stop date of 12 months after signing applies. Failure to complete ODI within 30 business days after corporate approvals triggers a Transition Period Convertible Advance of RMB 350.00 million; a further RMB 150.00 million is due if ODI is still outstanding after 180 days.
Use of Net Proceeds (RMB 476.50 million) • R&D, clinical and regulatory expenditure: 25.2 % (≈ RMB 120.00 million). • Working capital—administration, sales & distribution, manufacturing upgrades and raw-material procurement: 43.3 % (≈ RMB 206.50 million). • Repayment of existing loans, including the RMB 150.00 million Yingzhiqin No. 2 facility, by end-2026: 31.5 % (≈ RMB 150.00 million).
Strategic Rationale Management cites acute liquidity needs—net cash outflow from operations of RMB 160.67 million and a half-year loss of RMB 191.31 million at 30 June 2026—as well as upcoming debt maturities of RMB 162.94 million. The package provides committed capital, diversifies funding sources and introduces a strategic investor connected to local government-backed Hangzhou Hi-Tech Venture Capital.
No equity financing has been undertaken in the past 12 months. Upon approval, Venus Medtech will seek Hong Kong listing of the new H-shares and conversion shares; any Domestic Shares issued will not be listed in Hong Kong.