Wandong Medical Secures Strategic Investment for Wally Cloud at a Post-Money Valuation of RMB 1.45 Billion

Recently, VCBeat (WeChat Official Account: vcbeat) learned that Wandong Medical has introduced Hangzhou Yuhua Investment Partnership and Shanghai Shengyu Equity Investment Fund Management Co., Ltd. to increase their capital investment in WanLiCloud, a controlled subsidiary under the company.

On March 28, 2016, Wandong Medical, WanLiCloud, and AliHealth signed the "Capital Increase Agreement" and the "Shareholders Agreement," whereby AliHealth made a capital injection into WanLiCloud. At that time, the equity structure of WanLiCloud was as follows:

Wandong Medical, WanLiCloud, and AliHealth stipulated an equity incentive mechanism in the signed "Capital Increase Agreement" and "Shareholders' Agreement," whereby 15% of WanLiCloud’s equity held by the company after the completion of the capital increase shall be used for equity incentives for WanLiCloud’s core employees.

On May 15, 2019, Wandong Medical, WanLiCloud, AliHealth, Yuhua, and Shengyu jointly signed the Capital Increase Agreement and the Shareholders Agreement. With reference to industry standing, business scale, comparable transactions, and future prospects, the parties to this transaction adopted a post-money valuation of RMB 1.45 billion for WanLiCloud as the pricing basis.

Pursuant to the capital increase agreement, Yuhua shall pay a capital contribution of RMB 50 million (of which RMB 395,062 shall be credited to the target company’s increased registered capital, with the remainder credited to its capital reserve), and Shengyu shall pay a capital contribution of RMB 50 million (of which RMB 395,062 shall be credited to the target company’s increased registered capital, with the remainder credited to its capital reserve). The registered capital of WanLiCloud shall increase from RMB 10.666667 million to RMB 11.456791 million.

Following the closing of the equity transfer and this capital increase, WanLiCloud’s registered capital and shareholding percentages are as set forth in the table below:

Based on WanLiCloud’s financial status, as of December 31, 2018, the audited total assets amounted to RMB 217.7492 million, with net assets of RMB 195.2399 million; operating revenue was RMB 42.6284 million, and net profit was -RMB 14.3040 million.

Wandong Medical stated that this capital increase will boost WanLiCloud’s own funds, further intensify business expansion efforts, and be primarily used for the research and development of AI in medical imaging, the construction of imaging centers, and the market promotion of its imaging SaaS cloud platform.