MicroPort NeuroTech Secures RMB 150 Million Strategic Investment, Files for IPO

Original Title: MicroPort (00853.HK) Subsidiary MicroPort NeuroTech Receives Strategic Investment of RMB 150 Million Source: Gelonghui

Gelonghui, July 24 | MicroPort (00853.HK) announced that on July 24, 2020, certain member companies of the Group entered into agreements, pursuant to which: (i) Wangdaotong Biotechnology and the investor, Shanghai Lianghong Enterprise Management Consulting Center (Limited Partnership), agreed to inject new capital into the target company, MicroPort NeuroTech (Shanghai) Co., Ltd.; (ii) the subsidiary agreed to provide loans to Wangdaotong Biotechnology; and (iii) the Group agreed to supply raw materials, including medical devices and equipment, to the target company group upon completion of the first agreement.

The target company is a limited liability company established in China, primarily engaged in the research and development, production, and sales of neurointerventional medical devices. As of the date of the first agreement, 83% of the target company was owned by the Company’s subsidiary.

Pursuant to the agreement, Wangdaotong Biotechnology and the investors will inject a total of RMB 150 million into the target company, with Wangdaotong Biotechnology and the investors injecting RMB 115 million and RMB 35 million, respectively. Immediately upon completion of the first agreement, the Company’s actual equity interest in the target company will be diluted from the current 83% to approximately 69.89%, while the target company will remain a subsidiary of the Company.

In addition, the subsidiary will provide Wangdaotong Biotechnology with an 18-month secured term loan in the principal amount of RMB 115 million, bearing interest at an annual rate of 5%.

Pursuant to the Third Agreement, the member companies of the Group shall supply raw materials (including but not limited to medical devices and equipment) to the member companies of the Target Company Group and provide procurement services.

The Company stated that the Target Company’s products involve cutting-edge technologies, and their research and development, clinical trials, regulatory registration, and commercialization entail substantial costs. Consequently, the Target Company has significant capital requirements for the implementation and execution of its development plans. The capital increase will provide additional funding to support the Target Company’s development.

Furthermore, the Group has adopted a strategy to encourage employees to actively participate in business investments, enabling them to hold personal equity interests in such businesses and share in the resulting benefits. To actively promote the business development and incubation of subsidiaries and associates, and to encourage senior management to actively participate in such investments—thereby stimulating their entrepreneurial spirit and advancing the Group’s strategic objectives—the Company is considering providing financial assistance to senior management for investing in the Company’s subsidiaries and associates.