Q & M Dental Group Initiates Second Security Enforcement to Recover Outstanding Profit Guarantee

Key Highlights

• Enforcement of Share Security Agreement: Q & M Dental Group (Singapore) Limited (“the Company”) is proceeding with a Second Security Enforcement to acquire the remaining 21,428,229 Aoxin Shares from Health Field Enterprises Limited (HFEL) at S\$0.180 per share, totaling S\$3,857,081.
• Purpose of Enforcement: The action is taken as a partial settlement of the outstanding Profit Guarantee amounts owed by Dr. Shao Yongxin and HFEL, in line with the Master Agreement and the Share Security Agreement.
• Increase in Stake: Completion of this enforcement will increase the Company’s direct shareholding in Aoxin from 52.64% to 54.74% of issued shares.
• Outstanding Amounts: Despite this enforcement, Dr. Shao and HFEL will still owe RMB 39,909,589 (approximately S\$7,459,102) to the Company. The Company is considering further recovery actions.
• Unsuccessful Recovery Attempts: The Company’s attempts to engage Dr. Shao and HFEL for a resolution have been unsuccessful, and no reasonable alternative proposal has been made by the debtors.
• Third-Party Sale Attempts: An independent third-party was appointed to seek buyers for these shares at prevailing market price, but no suitable buyers were found.

Detailed Information Investors Should Note

• Enforcement Price Basis: The price of S\$0.180 per Aoxin Share is based on the volume weighted average price (VWAP) on 31 March 2026, which was the last full market day before the enforcement.
• Valuation of Shares:
  • Book value of the 21,428,229 Aoxin Shares: S\$1,367,000 (as at 31 December 2025)
  • Net tangible asset value: S\$872,000 (as at 31 December 2025)
  • Open market value (VWAP): S\$3,857,081
  • No independent valuation was conducted as the shares are listed and traded on the Catalist of the SGX-ST.
• Financial Impact:
  • The Second Security Enforcement is not expected to have any material effect on the net tangible assets per share and earnings per share of the Group for the financial year ending 31 December 2026.
  • Relative figures under Rule 1006 of the SGX listing manual do not exceed 5.0%, making this a “non-disclosable” transaction under Rule 1008.
• Shareholding Changes:
  • Current shares held: 538,579,592 (52.64% of Aoxin’s issued shares)
  • Post-enforcement shares held: 560,007,821 (54.74% of Aoxin’s issued shares)
  • Total Aoxin shares in issue: 1,023,044,096 (excluding treasury shares)
• Ongoing Recovery: Despite this partial recovery, a significant sum (RMB 39,909,589 / S\$7,459,102) remains outstanding from Dr. Shao and HFEL. Management will consider further actions to recover this amount.
• Market Sensitivity: The Company cautions shareholders to exercise care when trading, as further announcements may follow, and failure to recover the outstanding amounts could affect the Group’s financial position.

Potential Price Sensitive Information

• The increase in shareholding interest in Aoxin may strengthen Q & M Dental Group’s control and influence over Aoxin.
• The ongoing inability to recover the full Profit Guarantee may carry risks, and further legal or recovery actions could impact the Company’s finances and market sentiment.
• The lack of material effect on earnings and assets suggests limited immediate financial upside, but strategic control implications could be significant.
• Investors should watch for additional disclosures or actions regarding the outstanding RMB 39.9 million, as these may impact valuations.

Conclusion

The Second Security Enforcement by Q & M Dental Group demonstrates the Company’s active steps to recover outstanding Profit Guarantee amounts and consolidate its stake in Aoxin. While there is no immediate material financial effect, the situation remains dynamic, and shareholders should closely monitor further developments, especially regarding the remaining substantial receivable.

Disclaimer: This article is prepared for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should consult their financial advisors and review official company documents before making any investment decisions. The information herein is based on company announcements and may be subject to change.

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