BIMI Announces Amendment to Stock Purchase Agreement of Chaohu Zhongshan Minimally Invasive Hospital

Rhea-AI Summary

BIMI International Medical Inc. has announced an amendment to the Stock Purchase Agreement for the acquisition of Chaohu Zhongshan Minimally Invasive Hospital. The amendment, effective February 1, 2022, reduces the purchase price by 50% from RMB 120 million to RMB 60 million, and eliminates the cash payment previously due. Additionally, the 2021 and 2022 revenue and profit targets have been significantly lowered. The seller will return 1 million shares and RMB 40 million cash to BIMI. The CEO believes the focus on gynecology presents a strong growth potential for the company.

Positive

• Acquisition cost reduced by 50% from RMB 120 million to RMB 60 million.
• Elimination of cash payment obligations, improving liquidity.
• Focus on gynecology may drive future revenue growth.

Negative

• Reduced performance targets indicate lower confidence in future profitability.
• Significant cuts to 2021 and 2022 revenue and profit targets may signal underlying business challenges.

NEW YORK, Feb. 03, 2022 (GLOBE NEWSWIRE) -- BIMI International Medical Inc. (NASDAQ: BIMI) (“BIMI” or the “Company”), a healthcare products and services provider, today announced that on February 1, 2022, the Company entered into an Amendment and Settlement Agreement to amend the Stock Purchase Agreement relating to the acquisition of Chaohu Zhongshan Minimally Invasive Hospital (“Zhongshan Hospital”) dated in December 2020. The Amendment reduces post-closing performance targets and payments and settles certain payments as a result of such amendment.

Pursuant to the amendment, the Purchase Price was retroactively reduced by 50% from RMB 120,000,000 (currently approximately US$18,864,957) to RMB 60,000,000 (currently approximately US$9,432,479), the Closing Cash Payment was retroactively reduced from RMB 40,000,000 to nil and the Deferred Closing Stock Payment was retroactively reduced from 2,000,000 shares of the Company’s Common Stock to 1,000,000 shares of the Company’s Common Stock. The 2021 Revenue Target was also reduced by 50% from RMB 30,000,000 to RMB 15,000,000, the 2021 Profit Target was reduced from RMB 5,000,000 to RMB 2,500,000, the 2022 Revenue Target was reduced from RMB 33,000,000 to RMB 16,500,000 and the 2022 Profit Target was reduced from RMB 5,500,000 to RMB 2,750,000.

As a result of the amendments above, the parties agree to the following settlement terms:

1. Immediately after the signing of this Agreement, the seller of Zhongshan Hospital will execute and deliver all documents as requested by the Company in order to cause the return of 1,000,000 shares of the Company’s Common Stock.
2. Before December 31, 2022, the seller will return RMB 40,000,000 in cash to the Company, which was previously paid by the Company.

“The current market conditions provided us the opportunity to amend the agreement and reduce the Company’s acquisition cost, “said Mr. Tiewei Song, Chief Executive Officer and President of BIMI International Medical Inc. “We believe our focus on gynecology, especially high-end diagnostics equipment and surgical instruments, has great growth potential and profit-generation ability and can bring a new revenue stream to the Company.”

About BIMI International Medical Inc.
BIMI International Medical Inc. was founded in 2006. The Company is now exclusively a healthcare products and services provider, offering a broad range of healthcare products and related services and operates five private hospitals in China. For more information, please visit www.usbimi.com.

Safe Harbor Statement

Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, the Company’s ability to achieve profitable operations, its ability to continue to operate as a going concern, its ability to continue to meet NASDAQ continued listing requirements, the effects of the spread of COVID-19, the demand for the Company’s products and services in the People’s Republic of China, general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the United States Securities and Exchange Commission.

IR Contact:
Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803
Email: BIMI@dgipl.com

FAQ

What is the recent amendment regarding BIMI's acquisition of Zhongshan Hospital?

BIMI amended the Stock Purchase Agreement, reducing the purchase price and performance targets significantly.

How much has the acquisition price for Zhongshan Hospital been reduced?

The acquisition price was reduced by 50%, from RMB 120 million to RMB 60 million.

What changes were made to BIMI's revenue targets for 2021 and 2022?

The 2021 revenue target was cut from RMB 30 million to RMB 15 million, and the 2022 target was reduced from RMB 33 million to RMB 16.5 million.

What is the impact of the recent agreement on BIMI's stock?

The reduction in acquisition costs may positively impact liquidity but the lowered performance targets could raise concerns among investors.

When did BIMI announce the amendment to the Stock Purchase Agreement?

The announcement was made on February 3, 2022, regarding an agreement effective from February 1, 2022.