Jin Medical International Ltd 6-K, filed Aug 4, 2026
Jin Medical International Ltd. (ZJYL)
About this 6-K
Jin Medical International Ltd filed this 6-K on August 4, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For
the month of August
Commission
File Number:
(Exact name of registrant as specified in its charter)
No. 33 Lingxiang Road, Wujin District
Changzhou City, Jiangsu Province
People’s Republic of China
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K
EXPLANATORY NOTE
Semi-Annual Financial Results
JIN MEDICAL INTERNATIONAL LTD., a Cayman Islands exempted company (the “Company”), is furnishing this Form 6-K to provide its unaudited condensed consolidated interim financial statements and related notes, which are attached hereto as Exhibit 99.1.
On August 4, 2026, the Company issued a press release entitled “JIN MEDICAL INTERNATIONAL LTD. Reports First Half of Fiscal Year 2026 Financial Results,” a copy of which is attached hereto as Exhibit 99.2.
Completion of Acquisition
On June 29, 2026, the Company entered into a VIE Control Acquisition and Share Issuance Agreement (the “Acquisition Agreement”) with Erhua Medical Technology (Changzhou) Co., Ltd. (“Erhua Med”), Beijing Tongsheng Technology Co., Ltd. (the “Target”), Chang Gil Lee (the “Seller”), and the share recipients identified therein solely for the limited purposes set forth in the Acquisition Agreement. Pursuant to the Acquisition Agreement, the Company and Erhua Med agreed to acquire contractual control over, and the right to receive substantially all of the economic benefits of, the Target through a series of contractual arrangements (the “VIE Agreements”). Neither the Company nor Erhua Med would acquire legal title to the equity interests of the Target. The details of the Acquisition Agreement were previously disclosed in the Company’s Form 6-K furnished on June 30, 2026.
On July 20, 2026, the Company held, in sequence, (i) a meeting of the holders of its class A ordinary shares of a par value of US$0.001 each (the “Class A Ordinary Shares”), (ii) a meeting of the holders of its class B ordinary shares of a par value of US$0.001 each (the “Class B Ordinary Shares”, together with the Class A Ordinary Shares, the “Ordinary Shares”), and (iii) an extraordinary general meeting of shareholders (the “EGM”). All proposals submitted at the respective meetings were approved. The details of the shareholder approvals were previously disclosed in the Company’s Report of Foreign Private Issuer on Form 6-K furnished to the Securities and Exchange Commission on July 20, 2026.
On July 21, 2026, the transactions contemplated by the Acquisition Agreement were completed (the “Closing”). In connection with the Closing, the applicable parties executed the VIE Agreements, which became effective as of the Closing. As a result, Erhua Med obtained contractual control over, and the right to receive substantially all of the economic benefits of, the Target, including through the equity pledge, voting proxy and exclusive option arrangements provided under the VIE Agreements.
At the closing, the Company issued an aggregate of 64,186,456 Class A Ordinary Shares to the Seller and the Seller’s designated share recipients as consideration for the transactions contemplated by the Acquisition Agreement. In addition, pursuant to the Financial Advisory Engagement Agreement dated June 9, 2026, the Company issued an aggregate of 6,418,646 Class A Ordinary Shares to Goldeenridge Ventures Ltd. and its designated nominees as compensation for financial advisory services rendered in connection with the acquisition.
As of July 28, 2026, the Company had an aggregate of 78,432,485 Ordinary Shares issued and outstanding, consisting of 73,663,428 Class A Ordinary Shares and 4,769,057 Class B Ordinary Shares. Of the issued and outstanding ordinary shares, an aggregate of 1,673,276 Class A Ordinary Shares were non-restricted shares.
Third Amended and Restated Memorandum and Articles of Association
The Company’s Third Amended and Restated Memorandum and Articles of Association, as adopted by a special resolution passed at the EGM, is attached hereto as Exhibit 3.1.
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Incorporation by Reference
This report on Form 6-K (including all exhibits attached hereto other than the press release attached as Exhibit 99.2) is hereby incorporated by reference into the Company’s registration statement on Form F-3 (File No. 333-288314), initially filed with the U.S. Securities and Exchange Commission on June 25, 2025, and into each prospectus or prospectus supplement outstanding under the foregoing registration statement, to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Financial Statements and Exhibits.
Exhibits:
| Exhibit No. | Description | |
| 3.1 | Third Amended and Restated Memorandum and Articles of Association | |
| 99.1 | Unaudited Condensed Consolidated Financial Statements and Relates Notes as of March 31, 2026 and for the Six Months Ended March 31, 2026 and 2025. | |
| 99.2 | Press Release titled “JIN MEDICAL INTERNATIONAL LTD. Reports First Half of Fiscal Year 2026 Financial Results” | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| JIN MEDICAL INTERNATIONAL LTD. | ||
| By: | /s/ Erqi Wang | |
| Name: | Erqi Wang | |
| Title: | Chief Executive Officer and Director | |
Date: August 4, 2026
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Exhibit 3.1
THE COMPANIES ACT (REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
THIRD AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
JIN MEDICAL INTERNATIONAL LTD.
(adopted by a Special Resolution passed on 20 July 2026 and effective on 20 July 2026)
| 1. | The name of the Company is JIN MEDICAL INTERNATIONAL LTD. |
| 2. | The Registered Office of the Company will be situated at the offices of Vistra (Cayman) Limited, P. O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1 - 1205 Cayman Islands, or at such other location within the Cayman Islands as the Directors may from time to time determine. |
| 3. | The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Act or any other law of the Cayman Islands. |
| 4. | The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by the Companies Act. |
| 5. | The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this section shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands. |
| 6. | The liability of each Shareholder is limited to the amount, if any, unpaid on the Shares held by such Shareholder. |
| 7. | The authorized share capital of the Company is US$15,005,000 divided into 15,000,000,000 class A ordinary shares of a par value of US$0.001 each, and 5,000,000 class B ordinary shares of a par value of US$0.001 each. Subject to the Companies Act and the Articles, the Company shall have power to redeem or purchase any of its Shares and to increase or reduce its authorized share capital and to sub-divide or consolidate the said Shares or any of them and to issue all or any part of its capital whether original, redeemed, increased or reduced with or without any preference, priority, special privilege or other rights or subject to any postponement of rights or to any conditions or restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided. |
| 8. | The Company has power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. |
| 9. | Capitalized terms that are not defined in this Memorandum of Association bear the same meanings as those given in the Articles of Association of the Company. |
THE COMPANIES ACT (REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
THIRD AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
JIN MEDICAL INTERNATIONAL LTD.
(adopted by a Special Resolution passed on 20 July 2026 and effective on 20 July 2026)
TABLE A
The regulations contained or incorporated in Table ‘A’ in the First Schedule of the Companies Act shall not apply to the Company and the following Articles shall comprise the Articles of Association of the Company.
INTERPRETATION
| 1. | In these Articles the following defined terms will have the meanings ascribed to them, if not inconsistent with the subject or context: |
| “Affiliate” | for the purposes of these Articles, shall have the meaning given to it in Rule 405 of the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder; | |
| “Articles” | means these articles of association of the Company, as amended or substituted from time to time; | |
| “Board” and “Board of Directors” and “Directors” | means the directors of the Company for the time being, or as the case may be, the directors assembled as a board or as a committee thereof; | |
| “Chairman” | means the chairman of the Board of Directors; | |
| “Class” or “Classes” | means any class or classes of Shares as may from time to time be issued by the Company; | |
| “Class A Ordinary Share” | means an class A ordinary share of a par value of US$0.001 in the capital of the Company, and having the rights, preferences, privileges and restrictions provided for in the Memorandum and these Articles; | |
| “Class B Ordinary Share” | means an class B ordinary share of a par value of US$0.001 in the capital of the Company, and having the rights, preferences, privileges and restrictions provided for in the Memorandum and these Articles; | |
| “Commission” | means the Securities and Exchange Commission of the United States of America or any other federal agency for the time being administering the Securities Act; | |
| “Company” | means JIN MEDICAL INTERNATIONAL LTD., a Cayman Islands exempted company; | |
| “Companies Act” | means the Companies Act (Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof; |
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| “Company’s Website” | means the main corporate/investor relations website of the Company, the address or domain name of which has been disclosed in any registration statement filed by the Company in connection or which has otherwise been notified to Shareholders; | |
| “Conversion Date” | means in respect of a Conversion Notice means the day on which that Conversion Notice is delivered; |
| “Conversion Notice” | means a written notice delivered to the Company at its office (and as otherwise stated therein) stating that a holder of Class B Ordinary Shares elects to convert the number of Class B Ordinary Shares specified therein pursuant to Article 12(a); | |
| “Conversion Number” | in relation to any Class B Ordinary Shares, such number of Class A Ordinary Shares as may, upon exercise of the Conversion Right, be issued at the Conversion Rate; | |
| “Conversion Rate” | in relation to the conversion of Class B Ordinary Shares to Class A Ordinary Shares means, at any time, on a one-to-one basis. The foregoing Conversion Rate shall also be adjusted to account for any subdivision (by share split, subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by reverse share split, share consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the Class A Ordinary Shares in issue into a greater or lesser number of shares occurring after the original filing of the Articles without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation of the Class B Ordinary Shares in issue; | |
| “Conversion Right” | in respect of a holder of Class B Ordinary Shares, subject to the provisions of these Articles and to any applicable fiscal or other laws or regulations including the Companies Act, to convert all or any of its Class B Ordinary Shares, into the Conversion Number ofClass A Ordinary Shares in its discretion; | |
| “Designated Stock Exchange” | means the stock exchange in the United States on which any Shares are listed for trading; | |
| “Designated Stock Exchange Rules” | means the relevant code, rules and regulations, as amended, from time to time, applicable as a result of the original and continued listing of any Shares on the Designated Stock Exchange; | |
| “electronic” | has the meaning given to it in the Electronic Transactions Act and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor; | |
| “electronic communication” | means electronic posting to the Company’s Website, transmission to any number, address or internet website or other electronic delivery methods as otherwise decided and approved by not less than two-thirds of the vote of the Board; | |
| “Electronic Transactions Act” | means the Electronic Transactions Act (Revised) of the Cayman Islands and any statutory amendment or re-enactment thereof; | |
| “electronic record” | has the meaning given to it in the Electronic Transactions Act and any amendment thereto or re-enactments thereof for the time being in force and includes every other law incorporated therewith or substituted therefor; | |
| “Memorandum of Association” | means the memorandum of association of the Company, as amended or substituted from time to time by Special Resolution of the Company; |
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| “Ordinary Resolution” | means a resolution: |
| (a) | passed by a simple majority of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting of the Company held in accordance with these Articles; or |
| (b) | approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed; |
| “paid up” | means paid up as to the par value in respect of the issue of any Shares and includes credited as paid up; | |
| “Person” | means any natural person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having a separate legal personality) or any of them as the context so requires; | |
| “Register” | means the register of Members of the Company maintained in accordance with the Companies Act; | |
| “Registered Office” | means the registered office of the Company as required by the Companies Act; | |
| “Seal” | means the common seal of the Company (if adopted) including any facsimile thereof; | |
| “Secretary” | means any Person appointed by the Directors to perform any of the duties of the secretary of the Company; | |
| “Securities Act” | means the Securities Act of 1933 of the United States of America, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time; | |
| “Share” | means a share in the capital of the Company, and includes a Class A Ordinary Share or Class B Ordinary Share. All references to “Shares” herein shall be deemed to be Shares of any or all Classes as the context may require. For the avoidance of doubt in these Articles the expression “Share” shall include a fraction of a Share; | |
| “Shareholder” or “Member” | means a Person who is registered as the holder of one or more Shares in the Register; | |
| “Share Premium Account” | means the share premium account established in accordance with these Articles and the Companies Act; | |
| “signed” | means bearing a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a person with the intent to sign the electronic communication; |
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| “Special Resolution” | means a special resolution of the Company passed in accordance with the Companies Act, being a resolution: |
| (a) | passed by not less than two-thirds of the votes cast by such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of corporations, by their duly authorized representatives, at a general meeting of the Company of which notice specifying the intention to propose the resolution as a special resolution has been duly given; or |
| (b) | approved in writing by all of the Shareholders entitled to vote at a general meeting of the Company in one or more instruments each signed by one or more of the Shareholders and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is executed; |
| “Treasury Share” | means a Share held in the name of the Company as a treasury share in accordance with the Companies Act; and | |
| “United States” | means the United States of America, its territories, its possessions and all areas subject to its jurisdiction |
| 2. | In these Articles, save where the context requires otherwise: |
| (a) | words importing the singular number shall include the plural number and vice versa; |
| (b) | words importing the masculine gender only shall include the feminine gender and any Person as the context may require; |
| (c) | the word “may” shall be construed as permissive and the word “shall” shall be construed as imperative; |
| (d) | reference to a dollar or dollars (or US$) and to a cent or cents is reference to dollars and cents of the United States of America; |
| (e) | reference to a statutory enactment shall include reference to any amendment or re-enactment thereof for the time being in force; |
| (f) | reference to any determination by the Directors shall be construed as a determination by the Directors in their sole and absolute discretion and shall be applicable either generally or in any particular case; |
| (g) | reference to “in writing” shall be construed as written or represented by any means reproducible in writing, including any form of print, lithograph, email, facsimile, photograph or telex or represented by any other substitute or format for storage or transmission for writing including in the form of an electronic record or partly one and partly another; |
| (h) | any requirements as to delivery under the Articles include delivery in the form of an electronic record or an electronic communication; |
| (i) | any requirements as to execution or signature under the Articles, including the execution of the Articles themselves, can be satisfied in the form of an electronic signature as defined in the Electronic Transaction Act; and |
| (j) | Sections 8 and 19(3) of the Electronic Transactions Act shall not apply. |
| 3. | Subject to the last two preceding Articles, any words defined in the Companies Act shall, if not inconsistent with the subject or context, bear the same meaning in these Articles. |
PRELIMINARY
| 4. | The business of the Company may be conducted as the Directors see fit. |
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| 5. | The Registered Office shall be at such address in the Cayman Islands as the Directors may from time to time determine. The Company may in addition establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine. |
| 6. | The expenses incurred in the formation of the Company and in connection with the offer for subscription and issue of Shares shall be paid by the Company. Such expenses may be amortized over such period as the Directors may determine and the amount so paid shall be charged against income and/or capital in the accounts of the Company as the Directors shall determine. |
| 7. | The Directors shall keep, or cause to be kept, the Register at such place or (subject to compliance with the Companies Act and these Articles) places as the Directors may from time to time determine and, in the absence of any such determination, the Register shall be kept at the Registered Office. |
SHARES
| 8. | Subject to these Articles, all Shares for the time being unissued shall be under the control of the Directors who may, in their absolute discretion and without the approval of the Members, cause the Company to: |
| (a) | issue, allot and dispose of Shares (including, without limitation, preferred shares) (whether in certificated form or non-certificated form) to such Persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine; |
| (b) | grant rights over Shares or other securities to be issued in one or more classes or series as they deem |
necessary or appropriate and determine the designations, powers, preferences, privileges and other rights attaching to such Shares or securities, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers, preferences, privileges and rights associated with the then issued and outstanding Shares, at such times and on such other terms as they think proper; and
| (c) | grant options with respect to Shares and issue warrants, convertible securities or similar instruments with respect thereto; |
and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued.
| 9. | The Directors may authorize the division of Shares into any number of Classes and the different Classes shall be authorized, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes (if any) may be fixed and determined by the Directors or by a Special Resolution. The Directors may issue from time to time, out of the authorised share capital of the Company, preferred shares with such preferred or other rights, all or any of which may be greater than the rights of Class A Ordinary Shares or Class B Ordinary Shares, at such time and on such terms as they may think appropriate in their absolute discretion and without approval of the Members; provided, however, before any preferred shares of any such series are issued, the Directors shall by resolution of Directors determine, with respect to any series of preferred shares, the terms and rights of that series, including: |
| (a) | the designation of such series, the number of preferred shares to constitute such series and the subscription price thereof if different from the par value thereof; |
| (b) | whether the preferred shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited; |
| (c) | the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, and the preference or relation which such dividends shall bear to the dividends payable on any shares of any other class or any other series of shares; |
| (d) | whether the preferred shares of such series shall be subject to redemption by the Company, and, if so, the times, prices and other conditions of such redemption; |
| (e) | whether the preferred shares of such series shall have any rights to receive any part of the assets available for distribution amongst the Members upon the liquidation of the Company, and, if so, the terms of such liquidation preference, and the relation which such liquidation preference shall bear to the entitlements of the holders of shares of any other class or any other series of shares; |
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| (f) | whether the preferred shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the preferred shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof; |
| (g) | whether the preferred shares of such series shall be convertible into, or exchangeable for, shares of any other class or any other series of preferred shares or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange; |
| (h) | the limitations and restrictions, if any, to be effective while any preferred shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption or other acquisition by the Company of, the existing shares or shares of any other class of shares or any other series of preferred shares; |
| (i) | the conditions or restrictions, if any, upon the creation of indebtedness of the Company or upon the issue of any additional shares, including additional shares of such series or of any other class of shares or any other series of preferred shares; and |
| (j) | any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof; |
and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued. The Company is not obliged to issue, allot or dispose of Shares if it is, in the opinion of the Directors, unlawful or impracticable. The Company shall not issue Shares to bearer.
Except as otherwise expressly provided in the resolution or resolutions providing for the establishment of any Class or series of preferred shares, no vote of the holders of preferred shares or Class A Ordinary Shares or Class B Ordinary Shares shall be a prerequisite to the issuance of any Shares of any Class or series of the preferred Shares authorized by and complying with the conditions of the Memorandum and these Articles.
| 10. | The Company may insofar as may be permitted by law, pay a commission to any Person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares. Such commissions may be satisfied by the payment of cash or the lodgment of fully or partly paid-up Shares or partly in one way and partly in the other. The Company may also pay such brokerage as may be lawful on any issue of Shares. |
| 11. | The Directors may refuse to accept any application for Shares, and may accept any application in whole or in part, for any reason or for no reason. |
RIGHTS OF SHARES
| 12. | Subject to Article 8, the Memorandum and any Special Resolution to the contrary and without prejudice to any special rights conferred thereby on the holders of any other Shares or class of Shares, Class A Ordinary Shares and Class B Ordinary Shares shall carry equal rights and rank pari passu with one another in all respects other than as set out below: |
| (a) | Conversion Rights: |
| (i) | Subject to the provisions hereof and to compliance with all fiscal and other laws and regulations applicable thereto, including the Companies Act, a holder of Class B Ordinary Shares shall have the Conversion Right in respect of each Class B Ordinary Share in its holding. For the avoidance of doubt, a holder of Class A Ordinary Shares shall have no rights to convert Class A Ordinary Shares into Class B Ordinary Shares under any circumstances. |
| (ii) | Each Class B Ordinary Share shall be converted at the option of the holder, at any time after issue and without the payment of any additional sum, into such Conversion Number of fully paid Class A Ordinary Shares calculated at the Conversion Rate. Such conversion shall take effect on the Conversion Date. A Conversion Notice shall not be effective if it is not accompanied by the share certificates in respect of the relevant Class B Ordinary Shares and/or such other evidence (if any) as the Directors may reasonably require to prove the title of the person exercising such right (or, if such certificates have been lost or destroyed, such evidence of title and such indemnity as the Directors may reasonably require). Any and all taxes and stamp, issue and registration duties (if any) arising on conversion shall be borne by the holder of Class B Ordinary Shares requesting conversion. |
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| (iii) | On the Conversion Date, every Class B Ordinary Share converted shall automatically be re-designated and re-classified (or in such other manner as the Directors may direct that is not in contravention of applicable laws) as the applicable Conversion Number of Class A Ordinary Shares with such rights and restrictions attached thereto and shall rank pari passu in all respects with the Class A Ordinary Shares then in issue and the Company shall enter or procure the entry of the name of the relevant holder of converted Class B Ordinary Shares as the holder of the corresponding number of Class A Ordinary Shares resulting from the conversion of the Class B Ordinary Shares in, and make any other necessary |
and consequential changes to, the register of members and shall procure that, if required, certificates in respect of the relevant Class A Ordinary Shares, together with a new certificate for any unconverted Class B Ordinary Shares comprised in the certificate(s) surrendered by the holder of the Class B Ordinary Shares, are issued to the holders thereof.
| (iv) | Until such time as the Class B Ordinary Shares have been converted into Class A Ordinary Shares, the Company shall: (A) at all times keep available for issue and free of all liens, charges, options, mortgages, pledges, claims, equities, encumbrances and other third-party rights of any nature, and not subject to any pre-emptive rights out of its authorised but unissued share capital, such number of authorised but unissued Class A Ordinary Shares as would enable all Class B Ordinary Shares to be converted into Class A Ordinary Shares and any other rights of conversion into, subscription for or exchange into Class A Ordinary Shares to be satisfied in full; and (B) not make any issue, grant or distribution or take any other action if the effect would be that on the conversion of the Class B Ordinary Shares to Class A Ordinary Shares it would be required to issue Class A Ordinary Shares at a price lower than the par value thereof. |
| (b) | Voting Rights: |
| (i) | Holders of Class A Ordinary Shares and Class B Ordinary Shares have the right to receive notice of, attend, speak and vote at general meetings of the Company. Holders of shares of Class A Ordinary Shares and Class B Ordinary Shares shall, at all times, vote together as a single class on all matters submitted to a vote for Members’ consent. |
| (ii) | Each Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to the vote at general meetings of the Company; whereas, each Class B Ordinary Share shall be entitled to eight hundred (800) votes on all matters subject to the vote at general meetings of the Company. |
MODIFICATION OF RIGHTS
| 13. | Ifat any time the capital of the Company is divided into different Classes, all or any of the rights attached to any such Class may, subject to any rights or restrictions for the time being attached to any Class, be varied with the consent in writing of all of the holders of the issued Shares of that Class or with the sanction of a special resolution passed at a separate meeting of the holders of the Shares of that Class. To every such separate meeting all the provisions of these Articles relating to general meetings of the Company or to the proceedings thereat shall, mutatis mutandis, apply, except that the necessary quorum shall be one or more Persons holding or representing by proxy at least one-third in nominal or par value amount of the issued Shares of the relevant Class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those Shareholders who are present shall form a quorum) and that, subject to any rights or restrictions for the time being attached to the Shares of that Class, every Shareholder of the Class shall on a poll have such number of votes as is attached to each Share of that Class pursuant to these Articles for each Share of the Class held by him. For the purposes of this Article the Directors may treat all the Classes or any two or more Classes as forming one Class if they consider that all such Classes would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate Classes. |
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| 14. | The rights conferred upon the holders of the Shares of any Class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that Class, be deemed to be varied by the creation or issue of further Shares ranking pari passu with or subsequent to the Shares of that Class or the redemption or purchase of any Shares of any Class by the Company. The rights of the holders of Shares shall not be deemed to be varied by the creation or issue of Shares with preferred or other rights including, without limitation, the creation of Shares with enhanced or weighted voting rights. |
CERTIFICATES
| 15. | Every Person whose name is entered as a Member in the Register may, without payment and upon its written request, request a certificate within two calendar months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) in the form determined by the Directors. All certificates shall specify the Share or Shares held by that Person, provided that in respect of a Share or Shares held jointly by several persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint holders shall be sufficient delivery to all. All certificates for Shares shall be delivered personally or sent through the post addressed to the Member entitled thereto at the Member’s registered address as appearing in the Register. |
| 16. | Every share certificate of the Company shall bear legends required under the applicable laws, including the Securities Act. |
| 17. | Any two or more certificates representing Shares of any one Class held by any Member may at the Member’s request be cancelled and a single new certificate for such Shares issued in lieu on payment (if the Directors shall so require) of one dollar (US$1.00) or such smaller sum as the Directors shall determine. |
| 18. | If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed, a new certificate representing the same Shares may be issued to the relevant Member upon request, subject to delivery up of the old certificate or (if alleged to have been lost, stolen or destroyed) compliance with such conditions as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit. |
| 19. | In the event that Shares are held jointly by several persons, any request may be made by any one of the joint holders and if so made shall be binding on all of the joint holders. |
FRACTIONAL SHARES
| 20. | The Directors may issue fractions of a Share and, if so issued, a fraction of a Share shall be subject to and carry the corresponding fraction of liabilities (whether with respect to nominal or par value, premium, contributions, calls or otherwise), limitations, preferences, privileges, qualifications, restrictions, rights (including, without prejudice to the generality of the foregoing, voting and participation rights) and other attributes of a whole Share. If more than one fraction of a Share of the same Class is issued to or acquired by the same Shareholder such fractions shall be accumulated. |
LIEN
| 21. | The Company has a first and paramount lien on every Share (whether or not fully paid) for all amounts (whether presently payable or not) payable at a fixed time or called in respect of that Share. The Company also has a first and paramount lien on every Share registered in the name of a Person indebted or under liability to the Company (whether he is the sole registered holder of a Share or one of two or more joint holders) for all amounts owing by him or his estate to the Company (whether or not presently payable). The Directors may at any time declare a Share to be wholly or in part exempt from the provisions of this Article. The Company’s lien on a Share extends to any amount payable in respect of it, including but not limited to dividends. |
| 22. | The Company may sell, in such manner as the Directors in their absolute discretion think fit, any Share on which the Company has a lien, but no sale shall be made unless an amount in respect of which the lien exists is presently payable nor until the expiration of fourteen calendar days after a notice in writing, demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the Share, or the Persons entitled thereto by reason of his death or bankruptcy. |
| 23. | For giving effect to any such sale the Directors may authorize a Person to transfer the Shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. |
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| 24. | The proceeds of the sale after deduction of expenses, fees and commission incurred by the Company shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to the sale) be paid to the Person entitled to the Shares immediately prior to the sale. |
CALLS ON SHARES
| 25. | Subject to the terms of the allotment, the Directors may from time to time make calls upon the Shareholders in respect of any moneys unpaid on their Shares, and each Shareholder shall (subject to receiving at least fourteen calendar days’ notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on such Shares. A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed. |
| 26. | The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof. |
| 27. | If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the Person from whom the sum is due shall pay interest upon the sum at the rate of eight percent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part. |
| 28. | The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified. |
| 29. | The Directors may make arrangements with respect to the issue of partly paid Shares for a difference between the Shareholders, or the particular Shares, in the amount of calls to be paid and in the times of payment. |
| 30. | The Directors may, if they think fit, receive from any Shareholder willing to advance the same all or any part of the moneys uncalled and unpaid upon any partly paid Shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of an Ordinary Resolution, eight percent per annum) as may be agreed upon between the Shareholder paying the sum in advance and the Directors. No such sum paid in advance of calls shall entitle the Member paying such sum to any portion of a dividend declared in respect of any period prior to the date upon which such sum would, but for such payment, become presently payable. |
FORFEITURE OF SHARES
| 31. | If a Shareholder fails to pay any call or instalment of a call in respect of any Shares on the day appointed for payment, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued. |
| 32. | The notice shall name a further day (not earlier than the expiration of fourteen calendar days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the call was made will be liable to be forfeited. |
| 33. | If the requirements of any such notice as aforesaid are not complied with, any Share in respect of which the notice has been given may at any time thereafter, before the payment required by notice has been made, be forfeited by a resolution of the Directors to that effect. |
| 34. | A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. |
| 35. | A Person whose Shares have been forfeited shall cease to be a Shareholder in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares forfeited, but his liability shall cease if and when the Company receives payment in full of the amount unpaid on the Shares forfeited. |
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| 36. | A certificate in writing under the hand of a Director of the Company that a Share has been duly forfeited on a date stated in the certificate shall be conclusive evidence of the facts in the declaration as against all Persons claiming to be entitled to the Share. |
| 37. | The Company may receive the consideration, if any, given for a Share on any sale or disposition thereof pursuant to the provisions of these Articles as to forfeiture and may execute a transfer of the Share in favor of the Person to whom the Share is sold or disposed of and that Person shall be registered as the holder of the Share and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the disposition or sale. |
| 38. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which by the terms of issue of a Share becomes due and payable, whether on account of the amount of the Share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified. |
TRANSFER OF SHARES
| 39. | Subject to these Articles and any other transfer or conversion restrictions pursuant to arrangements entered into by the Company with any depositary bank or other parties, any Shareholder may transfer all or any of his Shares (including securities representing his Shares) by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange or in any other form approved by the Board or, if the transferor or transferee is a clearing house or a central depository house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Board may approve from time to time. |
| 40. | The instrument of transfer of any Share shall be in writing and in any usual or common form or such other form as the Directors may, in their absolute discretion, approve and be executed by or on behalf of the transferor and if in respect of a nil or partly paid up Share, or if so required by the Directors, shall also be executed on behalf of the transferee and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain a Shareholder until the name of the transferee is entered in the Register in respect of the relevant Shares. |
| 41. | i) The Directors may in their absolute discretion decline to register any transfer of Shares which is not fully paid up or on which the Company has a lien. |
| (a) | The Directors may also decline to register any transfer of any Share unless: |
| (i) | the instrument of transfer is lodged with the Company, accompanied by the certificate for the Shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; |
| (ii) | the instrument of transfer is in respect of only one Class of Shares; |
| (iii) | the instrument of transfer is properly stamped, if required; |
| (iv) | in the case of a transfer to joint holders, the number of joint holders to whom the Share is to be transferred does not exceed four; and |
| (v) | a fee of such maximum sum as the Designated Stock Exchange may determine to be payable, or such lesser sum as the Board of Directors may from time to time require, is paid to the Company in respect thereof. |
| 42. | The registration of transfers may, after compliance with any notice required by the Designated Stock Exchange Rules, be suspended and the Register closed at such times and for such periods as the Directors may, in their absolute discretion, from time to time determine, provided always that such registration of transfer shall not be suspended nor the Register closed for more than thirty calendar days in any calendar year. |
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| 43. | All instruments of transfer that are registered shall be retained by the Company. If the Directors refuse to register a transfer of any Shares, they shall within two calendar months after the date on which the instrument of transfer was lodged with the Company send notice of the refusal to each of the transferor and the transferee. |
TRANSMISSION OF SHARES
| 44. | The legal personal representative of a deceased sole holder of a Share shall be the only Person recognized by the Company as having any title to the Share. In the case of a Share registered in the name of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only Person recognized by the Company as having any title to the Share. |
| 45. | Any Person becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder shall, upon such evidence being produced as may from time to time be required by the Directors, have the right either to be registered as a Shareholder in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the deceased or bankrupt Person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt Person before the death or bankruptcy. |
| 46. | A Person becoming entitled to a Share by reason of the death or bankruptcy of a Shareholder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered Shareholder, except that he shall not, before being registered as a Shareholder in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company, provided however, that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the Share, and if the notice is not complied with within ninety calendar days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. |
REGISTRATION OF EMPOWERING INSTRUMENTS
| 47. | The Company shall be entitled to charge a fee not exceeding one dollar (US$1.00) on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney, notice in lieu of distringas, or other instrument. |
ALTERATION OF SHARE CAPITAL
| 48. | Subject to the provisions of the Companies Act and these Articles, the Company may from time to time by Ordinary Resolution increase the share capital by such sum, to be divided into Shares of such Classes and amount, as the resolution shall prescribe. |
| 49. | Subject to the Companies Act and these Articles, the Company may by Ordinary Resolution: |
| (a) | increase its share capital by new Shares of such amount as it thinks expedient; |
| (b) | consolidate and divide all or any of its share capital into Shares of a larger amount than its existing Shares; |
| (c) | subdivide its Shares, or any of them, into Shares of an amount smaller than that fixed by the Memorandum, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in case of the Share from which the reduced Share is derived; and |
| (d) | cancel any Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any Person and diminish the amount of its share capital by the amount of the Shares so cancelled. |
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| 50. | Unless the Board in its sole discretion determines otherwise, all new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. The Board may settle as they consider expedient any difficulty which arises in relation to any consolidation and division under the preceding Article and in particular but without prejudice to the generality of the foregoing may issue certificates in respect of fractions of shares or arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale (after deduction of the expenses of such sale) in due proportion amongst the Members who would have been entitled to the fractions, and for this purpose the Board may authorize some person to transfer the shares representing fractions to their purchaser or resolve that such net proceeds be paid to the Company for the Company’s benefit. Such purchaser will not be bound to see to the application of the purchase money nor will his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale. |
| 51. | The Company may by Special Resolution reduce its share capital and any capital redemption reserve in any manner authorized by law. |
REDEMPTION, PURCHASE AND SURRENDER OF SHARES
| 52. | Subject to the provisions of the Companies Act and these Articles, the Company may: |
| (a) | issue Shares that are to be redeemed or are liable to be redeemed at the option of the Shareholder or the Company. The redemption of Shares shall be effected in such manner and upon such terms as may be determined, before the issue of such Shares by either the Board or by the Shareholders by Special Resolution; |
| (b) | purchase its own Shares (including any redeemable Shares) in such manner and upon such terms as have been approved by the Board or by the Shareholders by Ordinary Resolution, or are otherwise authorized by these Articles; and |
| (c) | make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Companies Act, including out of capital. |
| 53. | The redemption, purchase or surrender of any Share shall not be deemed to give rise to the redemption, purchase or surrender of any other Share other than as may be required pursuant to applicable laws and any other contractual obligations of the Company. |
| 54. | The holder of the Shares being purchased shall be bound to deliver up to the Company the certificate(s) (if any) thereof for cancellation and thereupon the Company shall pay to him the purchase or redemption monies or consideration in respect thereof. |
| 55. | The Directors may accept the surrender for no consideration of any fully paid Share. |
TREASURY SHARES
| 56. | The Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share. |
| 57. | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration). |
| 58. | In the event that the Directors do not specify that the relevant Shares are to be held as Treasury Shares, such Shares shall be cancelled. |
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GENERAL MEETINGS
| 59. | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
| 60. | The Company may (but shall not be obliged to, unless as required by applicable law or Designated Stock Exchange Rules) in each calendar year hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as may be determined by the Directors. |
| (a) | At these meetings the report of the Directors (if any) shall be presented. |
| 61. | The Chairman or a majority of the Directors may call general meetings, and they shall on a Shareholders’ requisition forthwith proceed to convene an extraordinary general meeting of the Company. |
| (a) | A Shareholders’ requisition is a requisition of two or more Members holding at the date of deposit of the requisition Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding Shares of the Company that as at the date of the deposit carry the right to vote at general meetings of the Company. |
| (b) | The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists. |
| (c) | If there are no Directors as at the date of the deposit of the Members’requisition, or if the Directors do not within twenty-one calendar days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further twenty-one calendar days, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three calendar months after the expiration of the said twenty-one calendar days. |
| (d) | A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors. |
NOTICE OF GENERAL MEETINGS
| 62. | At least seven (7) calendar days’ notice shall be given for any general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of these Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: |
| (a) | in the case of an annual general meeting, by all the Shareholders (or their proxies) entitled to attend and vote thereat; and |
| (b) | in the case of an extraordinary general meeting, by two-thirds (2/3rd) of the Shareholders having a right to attend and vote at the meeting, present in person or by proxy or, in the case of a corporation or other non-natural person, by its duly authorized representative or proxy. |
| 63. | The accidental omission to give notice of a meeting to or the non-receipt of a notice of a meeting by any Shareholder shall not invalidate the proceedings at any meeting. |
PROCEEDINGS AT GENERAL MEETINGS
| 64. | No business except for the appointment of a chairman for the meeting shall be transacted at any general meeting unless a quorum of Shareholders is present at the time when the meeting proceeds to business. One or more Shareholders who together hold Shares which carry in aggregate not less than one-third (1/3) of all votes attaching to all issued and outstanding Shares that carry the right to vote at such general meeting, present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative, shall be a quorum for all purposes. |
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| 65. | If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall be dissolved. |
| 66. | If the Directors wish to make this facility available for a specific general meeting or all general meetings of the Company, participation in any general meeting of the Company may be by means of a telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting. |
| 67. | The Chairman, if any, of the Board of Directors shall preside as chairman at every general meeting of the Company. |
| 68. | If there is no such Chairman of the Board of Directors, or if at any general meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, any Director or Person nominated by the Directors shall preside as chairman of that meeting, failing which the Shareholders present in person or by proxy shall choose any Person present to be chairman of that meeting. |
| 69. | The chairman may with the consent of any general meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting, or adjourned meeting, is adjourned for fourteen calendar days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. |
| 70. | The Directors may cancel or postpone any duly convened general meeting at any time prior to such meeting, except for general meetings requisitioned by the Shareholders in accordance with these Articles, for any reason or for no reason, upon notice in writing to Shareholders. A postponement may be for a stated period of any length or indefinitely as the Directors may determine. Notice of the business to be transacted at such postponed general meeting shall not be required. If a general meeting is postponed in accordance with this Article, the appointment of a proxy will be valid if it is received as required by the Articles not less than 48 hours before the time appointed for holding the postponed meeting. |
| 71. | At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded. A poll may be demanded by the chairman of the meeting or by any or one or more Shareholders who together hold Shares which carry in aggregate not less than ten (10) percent of the votes attaching to all issued and outstanding Shares that carry the right to vote at such general meeting, present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. Unless a poll is so demanded, a declaration by the chairman of the meeting that a resolution has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of, or against, that resolution. |
| 72. | If a poll is duly demanded it shall be taken in such manner as the chairman of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. |
| 73. | All questions submitted to a meeting shall be decided by an Ordinary Resolution except where a greater majority is required by these Articles or by the Companies Act. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall not be entitled to a second or casting vote. |
| 74. | A poll demanded on the election of a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. |
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VOTES OF SHAREHOLDERS
| 75. | Subject to any rights and restrictions for the time being attached to any Share, on a show of hands every Shareholder present in person or by proxy (or, if a corporation or other non-natural person, by its duly authorized representative or proxy) shall, at a general meeting of the Company, each Class A Ordinary Share has one (1) vote and each Class B Ordinary Share has eight hundred (800) votes; and on a poll every Shareholder present in person or by proxy (or, if a corporation or other non-natural person, by its duly authorized representative or proxy) shall have one (1) vote for each Class A Ordinary Share, and eight hundred (800) votes for each Class B Ordinary Share of which he is the holder. Unless otherwise required under the Companies Act or by these Articles, holders of Class A Ordinary Shares and Class B Ordinary Shares shall at all times vote together as one class on all resolutions submitted to a vote by the Members. |
| 76. | In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy (or, if a corporation or other non-natural person, by its duly authorized representative or proxy) shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand in the Register. |
| 77. | Shares carrying the right to vote that are held by a Shareholder of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may be voted, whether on a show of hands or on a poll, by his committee, or other Person in the nature of a committee appointed by that court, and any such committee or other Person may vote in respect of such Shares by proxy. |
| 78. | No Shareholder shall be entitled to vote at any general meeting of the Company unless all calls, if any, or other sums presently payable by him in respect of Shares carrying the right to vote held by him have been paid. |
| 79. | On a poll votes may be given either personally or by proxy. |
| 80. | Each Shareholder, other than a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)), may only appoint one proxy on a show of hand and on a poll, each such proxy is under no obligation to cast all his votes in the same way. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation, either under Seal or under the hand of an officer or attorney duly authorized. A proxy need not be a Shareholder. On a poll a Shareholder entitled to more than one vote need not use all his votes or cast all his votes in the same way. |
| 81. | An instrument appointing a proxy may be in any usual or common form or such other form as the Directors may approve. |
| 82. | The instrument appointing a proxy shall be deposited at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company: |
| (a) | not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or |
| (b) | in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or |
| (c) | where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded be delivered at the meeting at which the poll was demanded to the chairman or to the secretary or to any director; |
provided that the Directors may in the notice convening the meeting, or in any instrument of proxy sent out by the Company, direct that the instrument appointing a proxy may be deposited at such other time (no later than the time for holding the meeting or adjourned meeting) at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting, or in any instrument of proxy sent out by the Company. The chairman of the meeting may in any event at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted shall be invalid.
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| 83. | The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. |
| 84. | A resolution in writing signed by all the Shareholders for the time being entitled to receive notice of and to attend and vote at general meetings of the Company (or being corporations by their duly authorized representatives) shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held. |
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETINGS
| 85. | Any corporation which is a Shareholder or a Director may by resolution of its directors or other governing body authorize such Person as it thinks fit to act as its representative at any meeting of the Company or of any meeting of holders of a Class or of the Directors or of a committee of Directors, and the Person so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Shareholder or Director. |
DEPOSITARY AND CLEARING HOUSES
| 86. | If a recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) is a Member of the Company, it may, by resolution of its directors or other governing body or by power of attorney, authorize such Person(s) as it thinks fit to act as its representative(s) at any general meeting of the Company or of any Class of Shareholders provided that, if more than one Person is so authorized, the authorization shall specify the number and Class of Shares in respect of which each such Person is so authorized. A Person so authorized pursuant to this Article shall be entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) which he represents as that recognized clearing house (or its nominee(s)) or depositary (or its nominee(s)) could exercise if it were an individual Member holding the number and Class of Shares specified in such authorization, including the right to vote individually on a show of hands. |
DIRECTORS
| 87. | i) Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than three (3) Directors, and there shall be no maximum number of Directors. |
| (a) | The Board of Directors shall have a Chairman elected and appointed by a majority of the Directors then in office. The period for which the Chairman will hold office will also be determined by a majority of all of the Directors then in office. The Chairman shall preside as chairman at every meeting of the Board of Directors, save and except that if the Chairman is not present at a meeting of the Board of Directors within fifteen minutes after the time appointed for holding the same, or if the Chairman is unable or unwilling to act as the chairman of a meeting of the Board of Directors, the attending Directors may choose one of their number to be the chairman of the meeting. |
| (b) | The Company may by Ordinary Resolution appoint any person to be a Director and the appointment of such Director shall firstly been approved by the Board of Directors or any committee of the Directors. |
| (c) | The Board may, by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting, appoint any person as a Director, to fill a casual vacancy on the Board or as an addition to the existing Board. |
| (d) | A Director shall hold office until the expiration of his or her term or his or her successor shall have been elected and qualified, or until his or her office is otherwise vacated. |
| 88. | A Director may be removed from office by Ordinary Resolution of the Company, notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under such agreement). A vacancy on the Board created by the removal of a Director under the previous sentence may be filled by Ordinary Resolution or by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting. The notice of any meeting at which a resolution to remove a Director shall be proposed or voted upon must contain a statement of the intention to remove that Director and such notice must be served on that Director not less than ten (10) calendar days before the meeting. Such Director is entitled to attend the meeting and be heard on the motion for his removal. |
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| 89. | The Board may, from time to time, and except as required by applicable law or Designated Stock Exchange Rules, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives of the Company and determine on various corporate governance related matters of the Company as the Board shall determine by resolution of Directors from time to time. |
| 90. | A Director shall not be required to hold any Shares in the Company by way of qualification. A Director who is not a Member of the Company shall nevertheless be entitled to attend and speak at general meetings. |
| 91. | The remuneration of the Directors shall be determined by the Directors. |
| 92. | The Directors shall be entitled to be paid their travelling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive such fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other. |
ALTERNATE DIRECTOR OR PROXY
| 93. | Any Director may in writing appoint another Person to be his alternate and, save to the extent provided otherwise in the form of appointment, such alternate shall have authority to sign written resolutions on behalf of the appointing Director, but shall not be required to sign such written resolutions where they have been signed by the appointing director, and to act in such Director’s place at any meeting of the Directors at which the appointing Director is unable to be present. Every such alternate shall be entitled to attend and vote at meetings of the Directors as a Director when the Director appointing him is not personally present and where he is a Director to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an alternate appointed by him. Such alternate shall be deemed for all purposes to be a Director of the Company and shall not be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them. |
| 94. | Any Director may appoint any Person, whether or not a Director, to be the proxy of that Director to attend and vote on his behalf, in accordance with instructions given by that Director, or in the absence of such instructions at the discretion of the proxy, at a meeting or meetings of the Directors which that Director is unable to attend personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting of the Directors at which such proxy is to be used, or first used, prior to the commencement of the meeting. |
DISQUALIFICATION OF DIRECTORS
| 95. | The office of Director shall be vacated, if the Director: |
| (a) | becomes bankrupt or makes any arrangement or composition with his creditors; |
| (b) | dies or is found to be or becomes of unsound mind; |
| (c) | resigns his office by notice in writing to the Company; |
| (d) | without special leave of absence from the Board, is absent from meetings of the Board for three consecutive meetings and the Board resolves that his office be vacated; |
| (e) | is prohibited by any applicable law or Designated Stock Exchange Rules from being a Director; or |
| (f) | is removed from office pursuant to any other provision of these Articles. |
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POWERS AND DUTIES OF DIRECTORS
| 96. | Subject to the Companies Act, these Articles and to any resolutions passed in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company. No resolution passed by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been passed. |
| 97. | Subject to these Articles, the Directors may from time to time appoint any natural person or corporation, whether or not a Director to hold such office in the Company as the Directors may think necessary for the administration of the Company, including but not limited to, chief executive officer, one or more other executive officers, president, one or more vice-presidents, treasurer, assistant treasurer, manager or controller, and for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. Any natural person or corporation so appointed by the Directors may be removed by the Directors. The Directors may also appoint one or more of their number to the office of managing director upon like terms, but any such appointment shall ipso facto terminate if any managing director ceases for any cause to be a Director, or if the Company by Ordinary Resolution resolves that his tenure of office be terminated. |
| 98. | The Directors may appoint any natural person or corporation to be a Secretary (and if need be an assistant Secretary or assistant Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary or assistant Secretary so appointed by the Directors may be removed by the Directors. |
| 99. | The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors. |
| 100. | The Directors may from time to time and at any time by power of attorney (whether under Seal or under hand) or otherwise appoint any company, firm or Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys or authorized signatory (any such person being an “Attorney” or “Authorized Signatory”, respectively) of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such Attorney or Authorized Signatory as the Directors may think fit, and may also authorize any such Attorney or Authorized Signatory to delegate all or any of the powers, authorities and discretion vested in him. |
| 101. | The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three next following Articles shall not limit the general powers conferred by this Article. |
| 102. | The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any natural person or corporation to be a member of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any such natural person or corporation. |
| 103. | The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorize the members for the time being of any such local board, or any of them to fill any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any natural person or corporation so appointed and may annul or vary any such delegation, but no Person dealing in good faith and without notice of any such annulment or variation shall be affected thereby. |
| 104. | Any such delegates as aforesaid may be authorized by the Directors to sub-delegate all or any of the powers, authorities, and discretion for the time being vested in them. |
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BORROWING POWERS OF DIRECTORS
| 105. | The Directors may from time to time at their discretion exercise all the powers of the Company to borrow money, to mortgage or charge all or any part of its undertaking, property and assets (present and future) and uncalled capital, and to issue debentures, bonds and other securities, whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party. |
THE SEAL
| 106. | The Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixings of the Seal. The Seal shall be affixed in the presence of a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose and every Person as aforesaid shall sign every instrument to which the Seal is so affixed in their presence. |
| 107. | The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in general form confirming a number of affixings of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such Person or Persons as the Directors shall for this purpose appoint and such Person or Persons as aforesaid shall sign every instrument to which the facsimile Seal is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the Seal had been affixed in the presence of and the instrument signed by a Director or a Secretary (or an assistant Secretary) or in the presence of any one or more Persons as the Directors may appoint for the purpose. |
| 108. | Notwithstanding the foregoing, a Secretary or any assistant Secretary shall have the authority to affix the Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company. |
PROCEEDINGS OF DIRECTORS
| 109. | The Directors may meet together (either within or without the Cayman Islands) for the despatch of business, adjourn, and otherwise regulate their meetings and proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. At any meeting of the Directors, each Director present in person or represented by his proxy or alternate shall be entitled to one vote. In case of an equality of votes the chairman of the meeting shall have a second or casting vote. A Director may, and a Secretary or assistant Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors. |
| 110. | A Director may participate in any meeting of the Directors, or of any committee appointed by the Directors of which such Director is a member, by means of telephone or similar communication equipment by way of which all Persons participating in such meeting can communicate with each other and such participation shall be deemed to constitute presence in person at the meeting. |
| 111. | The quorum necessary for the transaction of the business of the Board may be fixed by the Directors, and unless so fixed, the quorum shall be a majority of Directors then in office. A Director represented by proxy or by an alternate Director at any meeting shall be deemed to be present for the purposes of determining whether or not a quorum is present. |
| 112. | A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract or arrangement with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract or transaction which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made or transaction so consummated. A Director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration, provided that (a) such Director, if his interest (whether direct or indirect) in such contract or arrangement is material, has declared the nature of his interest at the earliest meeting of the Board at which it is practicable for him to do so, either specifically or by way of a general notice and (b) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee of the Company. |
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| 113. | A Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realized by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established. A Director, notwithstanding his interest, may be counted in the quorum present at any meeting of the Directors whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged and he may vote on any such appointment or arrangement. |
| 114. | Any Director may act by himself or through his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorize a Director or his firm to act as auditor to the Company. |
| 115. | The Directors shall cause minutes to be made for the purpose of recording: |
| (a) | all appointments of officers made by the Directors; |
| (b) | the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and |
| (c) | all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors. |
| 116. | When the chairman of a meeting of the Directors signs the minutes of such meeting the same shall be deemed to have been duly held notwithstanding that all the Directors have not actually come together or that there may have been a technical defect in the proceedings. |
| 117. | A resolution in writing signed by all the Directors or all the members of a committee of Directors entitled to receive notice of a meeting of Directors or committee of Directors, as the case may be (an alternate Director, subject as provided otherwise in the terms of appointment of the alternate Director, being entitled to sign such a resolution on behalf of his appointer), shall be as valid and effectual as ifit had been passed at a duly called and constituted meeting of Directors or committee of Directors, as the case may be. When signed a resolution may consist of several documents each signed by one or more of the Directors or his duly appointed alternate. |
| 118. | The continuing Directors may act notwithstanding any vacancy in their body but if and for so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number, or of summoning a general meeting of the Company, but for no other purpose. |
| 119. | Subject to any regulations imposed on it by the Directors, a committee appointed by the Directors may elect a chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within fifteen minutes after the time appointed for holding the meeting, the committee members present may choose one of their number to be chairman of the meeting. |
| 120. | A committee appointed by the Directors may meet and adjourn as it thinks proper. Subject to any regulations imposed on it by the Directors, questions arising at any meeting shall be determined by a majority of votes of the committee members present and in case of an equality of votes the chairman shall not have a second or casting vote. |
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| 121. | All acts done by any meeting of the Directors or of a committee of Directors, or by any Person acting as a Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or Person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such Person had been duly appointed and was qualified to be a Director. |
PRESUMPTION OF ASSENT
| 122. | A Director who is present at a meeting of the Board of Directors at which an action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. |
DIVIDENDS
| 123. | Subject to any rights and restrictions for the time being attached to any Shares, the Directors may from time to time declare dividends (including interim dividends) and other distributions on Shares in issue and authorize payment of the same out of the funds of the Company lawfully available therefor. |
| 124. | Subject to any rights and restrictions for the time being attached to any Shares, the Company by Ordinary Resolution may declare dividends, but no dividend shall exceed the amount recommended by the Directors. |
| 125. | The Directors may, before recommending or declaring any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, in the absolute discretion of the Directors, be applicable for meeting contingencies or for equalizing dividends or for any other purpose to which those funds may be properly applied, and pending such application may in the absolute discretion of the Directors, either be employed in the business of the Company or be invested in such investments (other than Shares of the Company) as the Directors may from time to time think fit. |
| 126. | Any dividend payable in cash to the holder of Shares may be paid in any manner determined by the Directors. If paid by cheque it will be sent by mail addressed to the holder at his address in the Register, or addressed to such person and at such addresses as the holder may direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on the Register in respect of such Shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company. |
| 127. | The Directors may determine that a dividend shall be paid wholly or partly by the distribution of specific assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the generality of the foregoing, the Directors may fix the value of such specific assets, may determine that cash payment shall be made to some Shareholders in lieu of specific assets and may vest any such specific assets in trustees on such terms as the Directors think fit. |
| 128. | Subject to any rights and restrictions for the time being attached to any Shares, all dividends shall be declared and paid according to the amounts paid up on the Shares, but if and for so long as nothing is paid up on any of the Shares dividends may be declared and paid according to the par value of the Shares. No amount paid on a Share in advance of calls shall, while carrying interest, be treated for the purposes of this Article as paid on the Share. |
| 129. | If several Persons are registered as joint holders of any Share, any of them may give effective receipts for any dividend or other moneys payable on or in respect of the Share. |
| 130. | No dividend shall bear interest against the Company. |
| 131. | Any dividend unclaimed after a period of six calendar years from the date of declaration of such dividend may be forfeited by the Board of Directors and, if so forfeited, shall revert to the Company. |
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ACCOUNTS, AUDIT AND ANNUAL RETURN AND DECLARATION
| 132. | The books of account relating to the Company’s affairs shall be kept in such manner as may be determined from time to time by the Directors. |
| 133. | The books of account shall be kept at the Registered Office, or at such other place or places as the Directors think fit, and shall always be open to the inspection of the Directors. |
| 134. | The Directors may from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right to inspect any account or book or document of the Company except as conferred by any applicable law or authorized by the Directors or by Ordinary Resolution. |
| 135. | The accounts relating to the Company’s affairs shall be audited in such manner and with such financial year end as may be determined from time to time by the Directors or failing any determination as aforesaid shall not be audited. |
| 136. | The Directors may appoint an auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his or their remuneration. |
| 137. | Every auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors. |
| 138. | The auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment, and at any time during their term of office, upon request of the Directors or any general meeting of the Members. |
| 139. | The Directors in each calendar year shall prepare, or cause to be prepared, an annual return and declaration setting forth the particulars required by the Companies Act and deliver a copy thereof to the Registrar of Companies in the Cayman Islands. |
CAPITALISATION OF RESERVES
| 140. | Subject to the Companies Act, the Directors may: |
| (a) | resolve to capitalize any sum standing to the credit of any of the Company’s reserve accounts or funds (including the Share Premium Account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution; |
| (b) | appropriate the sum resolved to be capitalized to the Shareholders in proportion to the nominal amount of Shares (whether or not fully paid) held by them respectively and apply that sum on their behalf in or towards: |
| (i) | paying up the amounts (if any) for the time being unpaid on Shares held by them respectively, or |
| (ii) | paying up in full unissued Shares or debentures of a nominal amount equal to that sum, and allot the Shares or debentures, credited as fully paid, to the Shareholders (or as they may direct) in those proportions, or partly in one way and partly in the other, but the Share Premium Account, the capital redemption reserve and profits which are not available for distribution may, for the purposes of this Article, only be applied in paying up unissued Shares to be allotted to Shareholders credited as fully paid; |
| (c) | make any arrangements they think fit to resolve a difficulty arising in the distribution of a capitalized reserve and in particular, without limitation, where Shares or debentures become distributable in fractions the Directors may deal with the fractions as they think fit; |
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| (d) | authorize a Person to enter (on behalf of all the Shareholders concerned) into an agreement with the Company providing for either: |
| (i) | the allotment to the Shareholders respectively, credited as fully paid, of Shares or debentures to which they may be entitled on the capitalization, or |
| (ii) | the payment by the Company on behalf of the Shareholders (by the application of their respective proportions of the reserves resolved to be capitalized) of the amounts or part of the amounts remaining unpaid on their existing Shares, |
and any such agreement made under this authority being effective and binding on all
those Shareholders; and
| (e) | generally do all acts and things required to give effect to the resolution. |
| 141. | Notwithstanding any provisions in these Articles, the Directors may resolve to capitalize any sum standing to the credit of any of the Company’s reserve accounts or funds (including the Share Premium Account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution by applying such sum in paying up in full unissued Shares to be allotted and issued to: |
| (a) | employees (including Directors) or service providers of the Company or its Affiliates upon exercise or vesting of any options or awards granted under any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or the Members; or |
| (b) | any trustee of any trust or administrator of any share incentive scheme or employee benefit scheme to whom shares are to be allotted and issued by the Company in connection with the operation of any share incentive scheme or employee benefit scheme or other arrangement which relates to such persons that has been adopted or approved by the Directors or Members. |
SHARE PREMIUM ACCOUNT
| 142. | The Directors shall in accordance with the Companies Act establish a Share Premium Account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share. |
| 143. | There shall be debited to any Share Premium Account on the redemption or purchase of a Share the difference between the nominal value of such Share and the redemption or purchase price provided always that at the discretion of the Directors such sum may be paid out of the profits of the Company or, if permitted by the Companies Act, out of capital. |
NOTICES
| 144. | Except as otherwise provided in these Articles, any notice or document may be served by the Company or by the Person entitled to give notice to any Shareholder either personally, or by posting it by airmail or by a recognized courier service in a prepaid letter addressed to such Shareholder at his address as appearing in the Register, or by electronic mail to any electronic mail address such Shareholder may have specified in writing for the purpose of such service of notices, or by facsimile to any facsimile number such Shareholder may have specified in writing for the purpose of such service of notices, or by placing it on the Company’s Website should the Directors deem it appropriate. In the case of joint holders of a Share, all notices shall be given to that one of the joint holders whose name stands first in the Register in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders. |
| 145. | Any notice, if send from one country to another, shall be sent by airmail or by a recognized courier service. |
| 146. | Any Shareholder present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened. |
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| 147. | Any notice or other document, if served by: |
| (a) | post, shall be deemed to have been served five calendar days after the time when the letter containing the same is posted; |
| (b) | facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient; |
| (c) | recognized courier service, shall be deemed to have been served 48 hours after the time when the letter containing the same is delivered to the courier service; |
| (d) | electronic mail, shall be deemed to have been served immediately upon the time of the transmission by electronic mail; or |
| (e) | placing it on the Company’s Website, shall be deemed to have been served immediately upon the time when the same is placed on the Company’s Website. |
In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier service.
| 148. | Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in accordance with the terms of these Articles shall notwithstanding that such Shareholder be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless his name shall at the time of the service of the notice or document have been removed from the Register as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all Persons interested (whether jointly with or as claiming through or under him) in the Share. |
| 149. | Notice of every general meeting of the Company shall be given to: |
| (a) | all Shareholders holding Shares with the right to receive notice and who have supplied to the Company an address for the giving of notices to them; and |
| (b) | every Person entitled to a Share in consequence of the death or bankruptcy of a Shareholder, who but for his death or bankruptcy would be entitled to receive notice of the meeting. |
No other Person shall be entitled to receive notices of general meetings.
INFORMATION
| 150. | No Member shall be entitled to require discovery of any information in respect of any detail of the Company’s trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board would not be in the interests of the Members of the Company to communicate to the public. |
| 151. | The Board shall be entitled to release or disclose any information in its possession, custody or control regarding the Company or its affairs to any of its Members including, without limitation, information contained in the Register and transfer books of the Company. |
INDEMNITY
| 152. | Every Director (including for the purposes of this Article any alternate Director appointed pursuant to the provisions of these Articles), Secretary, assistant Secretary, or other officer for the time being and from time to time of the Company (but not including the Company’s auditors) and the personal representatives of the same (each an “Indemnified Person”) shall be indemnified and secured harmless against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Person’s own dishonesty, willful default or fraud, in or about the conduct of the Company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere. |
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| 153. | No Indemnified Person shall be liable: |
| (a) | for the acts, receipts, neglects, defaults or omissions of any other Director or officer or agent of the Company; or |
| (b) | for any loss on account of defect of title to any property of the Company; or |
| (c) | on account of the insufficiency of any security in or upon which any money of the Company shall be invested; or |
| (d) | for any loss incurred through any bank, broker or other similar Person; or |
| (e) | for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgement or oversight on such Indemnified Person’s part; or |
| (f) | for any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers, authorities, or discretions of such Indemnified Person’s office or in relation thereto; |
unless the same shall happen through such Indemnified Person’s own dishonesty, willful default or fraud.
FINANCIAL YEAR
| 154. | Unless the Directors otherwise prescribe, the financial year of the Company shall end on September 30 in each calendar year and shall begin on October 1st in each calendar year. |
NON-RECOGNITION OF TRUSTS
| 155. | No Person shall be recognized by the Company as holding any Share upon any trust and the Company shall not, unless required by law, be bound by or be compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any Share or (except only as otherwise provided by these Articles or as the Companies Act requires) any other right in respect of any Share except an absolute right to the entirety thereof in each Shareholder registered in the Register. |
WINDING UP
| 156. | If the Company shall be wound up the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Companies Act, divide amongst the Members in species or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any asset upon which there is a liability. |
| 157. | If the Company shall be wound up, and the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. If in a winding up, the assets available for distribution amongst the Members shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the par value of the Shares held by them. This Article is without prejudice to the rights of the holders of Shares issued upon special terms and conditions. |
26
AMENDMENT OF ARTICLES OF ASSOCIATION
| 158. | Subject to the Companies Act, the Company may at any time and from time to time by Special Resolution alter or amend these Articles in whole or in part. |
CLOSING OF REGISTER OR FIXING RECORD DATE
| 159. | For the purpose of determining those Shareholders that are entitled to receive notice of, attend or vote at any meeting of Shareholders or any adjournment thereof, or those Shareholders that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Shareholder for any other purpose, the Directors may provide that the Register shall be closed for transfers for a stated period which shall not exceed in any case thirty calendar days in any calendar year. |
| 160. | In lieu of or apart from closing the Register, the Directors may fix in advance a date as the record date for any such determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of the Shareholders and for the purpose of determining those Shareholders that are entitled to receive payment of any dividend the Directors may, at or within ninety calendar days prior to the date of declaration of such dividend, fix a subsequent date as the record date for such determination. |
| 161. | If the Register is not so closed and no record date is fixed for the determination of those Shareholders entitled to receive notice of, attend or vote at a meeting of Shareholders or those Shareholders that are entitled to receive payment of a dividend, the date on which notice of the meeting is posted or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of those Shareholders that are entitled to receive notice of, attend or vote at a meeting of Shareholders has been made as provided in this Article, such determination shall apply to any adjournment thereof. |
REGISTRATION BY WAY OF CONTINUATION
| 162. | The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article, the Directors may cause an application to be made to the Registrar of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company. |
MERGERS AND CONSOLIDATIONS
| 163. | The Company shall have the power to merge or consolidate with one or more other constituent companies (as defined in the Companies Act) upon such terms as the Directors may determine and (to the extent required by the Companies Act) with the approval of a Special Resolution. |
DISCLOSURE
| 164. | The Directors, or any service providers (including the officers, the Secretary and the registered office agent of the Company) specifically authorized by the Directors, shall be entitled to disclose to any regulatory or judicial authority any information regarding the affairs of the Company including without limitation information contained in the Register and books of the Company. |
27
Exhibit 99.1
JIN MEDICAL INTERNATIONAL LTD.
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
F-1
JIN MEDICAL INTERNATIONAL LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | September 30, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Short-term investments | ||||||||
| Accounts receivable, net | ||||||||
| Accounts receivable - related parties | ||||||||
| Inventories, net | ||||||||
| Due from a related party | ||||||||
| Advance to suppliers - a related party | ||||||||
| Prepaid expenses and other current assets | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| NON-CURRENT ASSETS: | ||||||||
| Operating lease right-of-use assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Land use right, net | ||||||||
| Deferred tax assets, net | ||||||||
| Other non-current assets | ||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Short-term bank loans | $ | $ | ||||||
| Accounts payable | ||||||||
| Accrued liabilities and other payables | ||||||||
| Deferred revenue | ||||||||
| Deferred revenue - related parties | ||||||||
| Taxes payable | ||||||||
| Due to related parties | ||||||||
| Operating lease liabilities, current | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| NON-CURRENT LIABILITY: | ||||||||
| Long-term bank loan | ||||||||
| TOTAL NON-CURRENT LIABILITY | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES (Note 18) | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Class A ordinary share, $ | ||||||||
| Class B ordinary share, $ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| TOTAL EQUITY | ||||||||
| TOTAL LIABILITIES AND EQUITY | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
JIN MEDICAL INTERNATIONAL LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| For the Six Months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| REVENUE | ||||||||
| Revenue - third parties | $ | $ | ||||||
| Revenue - related parties | ||||||||
| Total revenue | ||||||||
| COST OF REVENUE AND RELATED TAX | ||||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| Business and sales related tax | ( | ) | ( | ) | ||||
| Total cost of revenue and related tax | ( | ) | ( | ) | ||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest income, net | ||||||||
| Foreign exchange (losses) gains, net | ( | ) | ||||||
| Other income, net | ||||||||
| Total other income, net | ||||||||
| (LOSS) INCOME BEFORE INCOME TAXES | ( | ) | ||||||
| INCOME TAX BENEFITS (EXPENSES) | ( | ) | ||||||
| NET (LOSS) INCOME | ( | ) | ||||||
| Less: net (loss) income attributable to non-controlling interest | ( | ) | ||||||
| NET LOSS ATTRIBUTABLE TO JIN MEDICAL INTERNATIONAL LTD. | $ | ( | ) | $ | ( | ) | ||
| COMPREHENSIVE INCOME (LOSS) | ||||||||
| Net (loss) income | ( | ) | ||||||
| Foreign currency translation gain (loss) | ( | ) | ||||||
| Comprehensive income (loss) | ( | ) | ||||||
| Less: comprehensive (loss) income attributable to non-controlling interest | ( | ) | ||||||
| COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JIN MEDICAL INTERNATIONAL LTD. | $ | $ | ( | ) | ||||
| Loss per ordinary share - basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares - basic and diluted* | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
JIN MEDICAL INTERNATIONAL LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 2026 AND 2025
| Ordinary Shares* | Additional | Accumulated Other | Total | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||
| Class
A Shares | Amount | Class
B Shares | Amount | Ordinary Shares | Amount | Paid
in Capital | Statutory Reserves | Retained
Earnings | Comprehensive Loss | Shareholders’ Equity | controlling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| Net (loss) income | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Statutory reserve | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation (loss) gain | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||
| Reclassification of ordinary shares into Class A and Class B ordinary shares | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Effect of rounding fractional shares into whole shares upon the reverse share split | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation gain (loss) | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
JIN MEDICAL INTERNATIONAL LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Six Months ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Amortization of operating lease right-of-use assets | ||||||||
| Depreciation and amortization | ||||||||
| Provision for credit losses | ||||||||
| Deferred income tax benefit | ( | ) | ( | ) | ||||
| Short-term investments income | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Accounts receivable - related parties | ||||||||
| Inventories | ( | ) | ||||||
| Advance to suppliers - a related party | ( | ) | ||||||
| Prepaid expenses and other current assets | ||||||||
| Other non-current assets | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued liabilities and other payables | ( | ) | ( | ) | ||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Deferred revenue - related parties | ( | ) | ||||||
| Taxes payable | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities: | ||||||||
| Additions to property, plant and equipment | ( | ) | ( | ) | ||||
| Prepayment for business acquisition | ( | ) | ||||||
| Payments for short-term investments | ( | ) | ( | ) | ||||
| Redemption of short-term investments | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from short-term bank loans | ||||||||
| Repayment of short-term bank loans | ( | ) | ( | ) | ||||
| Net proceeds from long-term bank loan | ||||||||
| Proceeds from amount due to related parties | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Net increase in cash | ||||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosure information: | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Non-cash operating and investing activities | ||||||||
| Payable for purchase of property, plant and equipment | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
JIN MEDICAL INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION
JIN MEDICAL INTERNATIONAL LTD. (“Jin Med” or the “Company”) was established under the laws of the Cayman Islands on January 14, 2020 as a holding company.
Jin
Med owns
Erhua
Medical Technology (Changzhou) Co., Ltd. (“Erhua Med”) was formed on September 24, 2020, as a Wholly Foreign-Owned Enterprise
(“WFOE”) in the People’s Republic of China (“PRC”). Zhongjin HK owns
Jin Med, Zhongjin HK and Erhua Med are currently not engaging in any active business operations and merely acting as holding companies.
Changzhou Zhongjin Medical Co., Ltd. (“Changzhou Zhongjin”) was incorporated on January 26, 2006 in accordance with PRC laws. Changzhou Zhongjin has two wholly-owned subsidiaries, Zhongjin Medical Taizhou Co., Ltd. (“Taizhou Zhongjin”), incorporated on June 17, 2013, and Changzhou Zhongjin Jing’ao Trading Co., Ltd (“Zhongjin Jing’ao”), incorporated on December 18, 2014 in accordance with PRC laws.
Zhongjin
Kangma Information Technology (Jiangsu) Co., Ltd. (“Zhongjin Kangma”) was incorporated on August 21, 2023 in accordance with
PRC laws. Changzhou Zhongjin owns an equity interest of
Zhongjin
Kangma Health Technology (Shanghai) Co., Ltd. (“Zhongjin Kangma Health”) was incorporated on February 19, 2025 in accordance
with PRC laws. Zhongjin Kangma owns
Changzhou Zhongjin, Taizhou Zhongjin, Zhongjin Jing’ao, Zhongjin Kangma and Zhongjin Kangma Health are collectively referred to as the “Zhongjin Operating Companies” below.
Zhongjin
Medical Equipment (Anhui) Co., Ltd. (“Anhui Zhongjin”) was incorporated on October 7, 2023, as a WFOE in the PRC. Zhongjin
Medical Equipment (Guangxi) Co., Ltd. (“Guangxi Zhongjin”) was incorporated on December 11, 2025, as a WFOE in the PRC. Zhongjin
HK owns
The Company, through its wholly-owned subsidiaries and entities controlled through contractual arrangements (see below), is primarily engaged in the design, development, manufacturing and sales of wheelchair and other living aids products to be used by people with disabilities or impaired mobility. The Company’s products are sold to distributors in both China and in the overseas markets.
F-6
Reorganization
A reorganization of the legal structure of the Company (“Reorganization”) was completed on November 26, 2020. The Reorganization involved the incorporation of Jin Med, Zhongjin HK and Erhua Med, and signing of certain contractual arrangements (collectively, the “VIE Agreements”) between Zhongjin Technology, the shareholders of Changzhou Zhongjin and Changzhou Zhongjin. Consequently, the Company became the ultimate holding company of Zhongjin HK, Erhua Med, and through the contractual arrangements, WFOE, or Erhua Med, became the primary beneficiary of the Variable Interest Entity (“VIE”), Changzhou Zhongjin, and its subsidiaries. Pursuant to the VIE Agreements, Erhua Med has gained effective control over Changzhou Zhongjin. Therefore, Changzhou Zhongjin should be treated as a VIE under the Statements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation. Since Taizhou Zhongjin and Zhongjin Jing’ao are wholly-owned subsidiaries of Changzhou Zhongjin, they are further referenced as VIE’s subsidiaries.
The Company, together with its wholly owned subsidiaries, the VIE and the VIE’s subsidiaries, are effectively controlled by the same shareholders before and after the Reorganization and therefore the Reorganization is considered as a recapitalization of entities under common control. The consolidation of the Company, its subsidiaries, the VIE and the VIE’s subsidiaries has been accounted for at historical cost.
The unaudited condensed consolidated financial statements of the Company include the following entities:
| Name of Entity | Date of Incorporation | Place of Incorporation | % of Ownership | Principal Activities | ||||||
| Jin Med | ||||||||||
| Zhongjin HK | ||||||||||
| Erhua Med | ||||||||||
| Changzhou Zhongjin | ||||||||||
| Taizhou Zhongjin | ||||||||||
| Zhongjin Jing’ao | ||||||||||
| Zhongjin Kangma | ||||||||||
| Anhui Zhongjin | ||||||||||
| Zhongjin Kangma Health | ||||||||||
| Guangxi Zhongjin | ||||||||||
F-7
The VIE contractual arrangements
The Company’s main operating entities, Changzhou Zhongjin and its subsidiaries Taizhou Zhongjin, Zhongjin Jing’ao, Zhongjin Kangma and Zhongjin Kangma Health (or the “Zhongjin Operating Companies” as referred above), are controlled through contractual arrangements in lieu of direct equity ownership by the Company.
A VIE is an entity which has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE, because it met the condition under the accounting principles generally accepted in the United States of America (“U.S. GAAP”) to consolidate the VIE.
Erhua Med, is deemed to have a controlling financial interest in and be the primary beneficiary of the Zhongjin Operating Companies because it has both of the following characteristics:
| ● | The power to direct activities of the Zhongjin Operating Companies that most significantly impact such entities’ economic performance, and |
| ● | The right to receive benefits from, the Zhongjin Operating Companies that could potentially be significant to such entities. |
Pursuant to these contractual arrangements, the Zhongjin Operating Companies shall pay service fees equal to all of their net profits after tax payments to Erhua Med. At the same time, Erhua Med has the right to receive substantially all of their economic benefits for accounting purposes. Such contractual arrangements are designed so that the operations of the Zhongjin Operating Companies are solely for the benefit of Erhua Med and ultimately, the Company, and therefore the Company must consolidate the Zhongjin Operating Companies under U.S. GAAP.
Risks associated with the VIE structure
The Company believes that the contractual arrangements with the VIE and the shareholders of the VIE are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:
| ● | revoke the business and operating licenses of the Company’s PRC subsidiaries and VIE; |
| ● | discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiaries and VIE; |
| ● | limit the Company’s business expansion in China by way of entering into contractual arrangements; |
| ● | impose fines or other requirements with which the Company’s PRC subsidiaries and VIE may not be able to comply; |
| ● | require the Company or the Company’s PRC subsidiaries and VIE to restructure the relevant ownership structure or operations; or |
| ● | restrict or prohibit the Company’s use of the proceeds from public offering to finance the Company’s business and operations in China. |
F-8
The Company’s ability to conduct its businesses may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. In such case, the Company may not be able to consolidate the VIE and the VIE’s subsidiaries in its unaudited condensed consolidated financial statements as it may lose the ability to exert effective control over the VIE and its shareholders and it may lose the ability to receive economic benefits from the VIE and the VIE’s subsidiaries for accounting purposes under U.S. GAAP. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiaries and the VIE and the VIE’s subsidiaries.
The
Company, Zhongjin HK and Erhua Med are essentially holding companies and do not have active operations as of March 31, 2026 and September
30, 2025. As a result, total assets and liabilities presented on the unaudited condensed consolidated balance sheets and revenue, expenses,
and net income (loss) presented on the unaudited condensed consolidated statement of comprehensive income (loss) as well as the cash
flows from operating, investing and financing activities presented on the unaudited condensed consolidated statement of cash flows are
substantially the financial position, operation results and cash flows of the VIE and the VIE’s subsidiaries. The Company has not
provided any financial support to the VIE and the VIE’s subsidiaries during the six months ended March 31, 2026 and 2025. Additionally,
pursuant to the VIE Agreements, Erhua Med has the right to receive service fees equal to the VIE’s net profits after tax payments.
None of these fees were paid to Erhua Med as of March 31, 2026. Accordingly, as of March 31, 2026 and September 30, 2025, Erhua Med had
$
The following financial statement amounts and balances of the VIE and VIE’s subsidiaries were included in the accompanying unaudited condensed consolidated financial statements after elimination of intercompany transactions and balances:
| March 31, 2026 | September 30, 2025 | |||||||
| Current assets | $ | $ | ||||||
| Non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Current liabilities | $ | $ | ||||||
| Non-current liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net revenue | $ | $ | ||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash (used in) provided by operating activities | $ | ( | ) | $ | ||||
| Net cash provided by (used in) investing activities | $ | $ | ( | ) | ||||
| Net cash (used in) provided by financing activities | $ | ( | ) | $ | ||||
F-9
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the Company’s unaudited condensed consolidated financial statement. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and the notes for the years ended September 30, 2025, 2024 and 2023. The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company, its wholly owned subsidiaries, and entities it controlled through VIE agreements. All inter-company balances and transactions are eliminated upon consolidation.
Uses of estimates
In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the unaudited condensed consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the expected credit losses for receivables, valuation of inventories, useful lives of property, plant and equipment and land use right, the recoverability of long-lived assets, and realization of deferred tax assets. Actual results could differ from those estimates.
Cash
Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. The Company maintains most of its bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs. As of March 31, 2026 and September 30, 2025, the Company does have any cash equivalents.
Short-term investments
The Company’s short-term investments consist
of wealth management financial products purchased from PRC banks or financial institution with maturities within one year. The banks or
financial institution invest the Company’s funds in certain financial instruments including money market funds, bonds or mutual
funds, with rates of return on these investments ranging from
Accounts receivable, net
Accounts
receivable are presented net of allowance for credit losses. Delinquent account balances are written-off against the allowance for credit
losses after management has determined that the likelihood of collection is not probable. As of March 31, 2026 and September 30, 2025,
allowance for credit losses amounted to $
F-10
Credit Losses
The Company follows Accounting Standards Update 2016-13 “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.
The Company’s account receivables and other receivables included in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets are within the scope of ASC Topic 326. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the accounts receivable and other receivables balances, credit-worthiness of the customers and other debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers and other debtors. The Company also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.
Expected credit losses are recorded as allowance for credit losses on the unaudited condensed consolidated statements of comprehensive income (loss). After all attempts to collect a receivable have failed, the receivable is written off against the allowance. In the event the Company recovers amounts previously reserved for, the Company will reduce the specific allowance for credit losses.
Inventories, net
Inventories are stated at lower of cost or net realizable value using the weighted average method. Costs include the cost of raw materials, freight, direct labor and related production overhead. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Write-down is recorded when future estimated net realizable value is less than cost, which is recorded in cost of revenue in the unaudited condensed consolidated statements of comprehensive income (loss). The Company periodically evaluates inventories against their net realizable value, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and future demand of each type of inventories. The reversal of inventory written down is prohibited under the U.S. GAAP.
F-11
Prepaid expenses and other current assets
Prepaid expenses and other current assets primarily consist of other receivable, advance to suppliers, prepayment for business acquisition, tax recoverable, prepaid expenses and deferred offering costs. The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the issuance of ordinary shares. Deferred offering costs will be charged to shareholders’ equity upon the completion of issuance of ordinary shares. Should the issuance of ordinary shares prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to the statement of comprehensive income (loss).
Fair value of financial instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| ● | Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. |
| ● | Level 3 — inputs to the valuation methodology are unobservable. |
Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, short-term investments, accounts receivable, net, accounts receivable - related parties, due from a related party, short-term bank loans, accounts payable, due to related parties, and accrued liabilities and other payables, approximate the fair value of the respective assets and liabilities as of March 31, 2026 and September 30, 2025 based upon the short-term nature of the assets and liabilities. The carrying amount of long-term bank loan approximate fair value as the loan is regularly re-priced at market interest rate.
F-12
Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property, plant and equipment is provided using the straight-line method over their expected useful lives, as follows:
| Useful life | ||
| Buildings | ||
| Leasehold improvements | ||
| Machinery and equipment | ||
| Motor vehicles | ||
| Office and electric equipment |
Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the unaudited condensed consolidated statements of comprehensive income (loss).
Leases
The Company leases offices spaces and employee dormitories, which is classified as operating leases in accordance with ASC Topic 842, Leases (“Topic 842”). Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases, usually with an initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
At
the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing
rate for the same term as the underlying lease. The ROU asset is recognized initially at cost, which primarily comprises the initial
amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives
received. All ROU assets are reviewed for impairment annually. The Company also established a capitalization threshold of $
Land use rights, net
Under
the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals
and companies the right to use parcels of land for specified periods of time. Land use rights are stated at cost less accumulated amortization.
| Useful life | ||
| Land use rights |
F-13
Impairment of long-lived assets
Long-lived assets with finite lives, primarily property, plant and equipment, operating lease right-of-use assets, land use right and other non-current assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were impairments of long-lived assets as of March 31, 2026 and September 30, 2025.
Bank borrowings
Bank borrowings represent the Company’s short-term loans and long-term loan obtained from commercial banks for the Company’s working capital and construction of manufacturing facilities. Bank borrowings carry at amortized costs using effective interest method.
Accounts payable
Accounts payable represents the Company’s liabilities to suppliers for raw materials and goods that have been received as of the reporting date but remain unpaid.
Revenue recognition
The Company generates its revenues primarily through sales of its products and recognizes revenue in accordance with ASC 606. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.
ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue.
In accordance to ASC 606, the Company recognizes revenue when it transfers goods to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the revenue generated from sales of its products on a gross basis as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods. All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual goods to customers, and there are no other separately identifiable promises in the contracts. The Company’s revenue streams are recognized at a point in time when the control of goods is transferred to customer. The Company’s products are sold with no right of return and the Company does not provide other credits or sales incentive to customers. Revenue is reported net of all VAT.
The
Company generally offers
F-14
Contract Assets and Liabilities
Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. The Company did have contract assets as of March 31, 2026 and September 30, 2025. Contract liabilities are recognized for contracts where payment has been received before the controls of goods are transferred to customers. The contract liability balance can vary significantly depending on the timing when cash is received and when the controls of goods are transferred to customers. As of March 31, 2026 and September 30, 2025, other than deferred revenue, the Company had no other contract liabilities or deferred contract costs recorded on its unaudited condensed consolidated balance sheets, and the Company had no material incremental costs for obtaining a contract. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling expenses when incurred.
Disaggregation of Revenues
The Company disaggregates its revenue from contracts by product types and geographic areas, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the six months ended March 31, 2026 and 2025 are as the following:
Geographic information
The summary of the Company’s total revenues by geographic market for the six months ended March 31, 2026 and 2025 was as follows:
| For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| China domestic market | $ | $ | ||||||
| Overseas market | ||||||||
| Total revenue | $ | $ | ||||||
Revenue by product categories
The summary of the Company’s total revenues by product categories for the six months ended March 31, 2026 and 2025 was as follows:
| For the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Wheelchair | $ | $ | ||||||
| Wheelchair components | ||||||||
| Other products | ||||||||
| Total revenue | $ | $ | ||||||
Research and development expenses
In
connection with the design and development of wheelchair and other living aids products, the Company expense all internal research costs
as incurred, which primarily comprise employee costs, internal and external costs related to execution of studies, manufacturing costs,
facility costs of the research center, and amortization of land use right, depreciation for property, plant and equipment used in the
research and development activities. For the six months ended March 31, 2026 and 2025, research and development expenses were $
F-15
Non-controlling interest
For the Company’s consolidated subsidiaries, the VIE and the VIE’s subsidiaries, non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. Non-controlling interests are classified as a separate line item in the equity section of the Company’s unaudited condensed consolidated balance sheets and have been separately disclosed in the Company’s unaudited condensed consolidated statements of comprehensive income (loss) to distinguish the interests from that of the controlling shareholder.
Income taxes
The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the unaudited condensed consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
An
uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained
in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than
The Company’s subsidiaries, the VIE and the VIE’s subsidiaries in China are subject to the income tax laws of the PRC. No income was generated outside the PRC for the six months ended March 31, 2026 and 2025. As of March 31, 2026, all of the Company’s tax returns of its PRC subsidiaries remain open for statutory examination by PRC tax authorities.
Value added tax (“VAT”)
Sales
revenue is reported net of VAT. The VAT is based on gross sales price and VAT rates range up to
F-16
Loss per share
The Company computes loss per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net loss divided by the weighted average ordinary shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential ordinary shares (e.g., convertible securities, options and warrants), using the treasury stock method, as if they had been converted at the beginning of the periods presented, or issuance date, if later. In computing diluted EPS, the treasury stock method assumes that outstanding potential ordinary shares are exercised and the proceeds are used to purchase ordinary share at the average market price during the period. Potential ordinary shares may have a dilutive effect under the treasury stock method only when the average market price of the ordinary share during the period exceeds the exercise price of the potential ordinary shares. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of March 31, 2026 and September 30, 2025, there were dilutive shares.
Risks and uncertainties
The main operation of the Company is located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.
The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s operations. Global markets continue to experience uncertainty due to ongoing geopolitical tensions, evolving trade and economic policies, economic sanctions, and other macroeconomic developments that may affect global financial markets and supply chains. The uncertainties remain high for global economy, particularly centered around the recent U.S. policy trends, with relatively significant downside risks. The Company has not experienced any material adverse impact on its operations. However, due to the significant uncertainties around the further development of the conflict and U.S. policy, the potential additional sanctions and other volatilities that could be brought to the global market, it is impossible to predict the extent to which the Company’s operation and business may be impacted.
Foreign currency translation
The functional currency for Jin Med and Zhongjin HK is the U.S Dollar (“US$” or “$”). Jin Med and Zhongjin HK currently only serve as holding company and do not have active operation as of the date of this report. The functional currency of the Company’s PRC subsidiaries, the VIE, and the VIE’s subsidiaries, is the Chinese Yuan (“RMB”). The Company’s unaudited condensed consolidated financial statements have been translated into the reporting currency of the U.S. Dollars. Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are reflected in the results of operations.
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation.
F-17
The following table outlines the currency exchange rates that were used in creating the unaudited condensed consolidated financial statements in this report:
| For
the Six Months Ended March 31, |
For
the Year Ended September 30, | |||||
| 2026 | 2025 | 2025 | ||||
| Period-end spot rate | US$1=RMB |
US$1=RMB |
US$1=RMB | |||
| Average rate | US$1=RMB |
US$1=RMB |
US$1=RMB | |||
Comprehensive income (loss)
Comprehensive income consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the unaudited condensed consolidated statements of comprehensive income (loss).
Statement of cash flows
In accordance with ASC 230, “Statement of Cash Flows”, cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.
Employee benefit expenses
The
Company’s subsidiaries, the VIE and the VIE’s subsidiaries in the PRC participate in a government-mandated employer social
insurance plan pursuant to which certain social security benefits, work-related injury benefits, maternity leave insurance, medical insurance,
unemployment benefit and housing fund are provided to eligible full-time employees. The relevant labor regulations require the Company’s
subsidiaries, the VIE and the VIE’s subsidiaries in the PRC to pay the local labor and social welfare authorities monthly contributions
based on the applicable benchmarks and rates stipulated by the local government. The contributions to the plan are expensed as incurred.
Employee social security and welfare benefits included as expenses in the unaudited condensed consolidated statements of comprehensive
income (loss) amounted to $
Segment reporting
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The Company adopted this ASU commencing October 1, 2024 and the adoption of the ASU does not have a material effect on its unaudited condensed consolidated financial statements.
Based
on the criteria established by ASC 280, the Company’s CODM has been identified as the Chief Executive Officer, who reviews consolidated
results when making decisions about allocating resources and assessing performance of the Company as a whole and hence, the Company has
only
F-18
The Company operates as operating and reportable segment, and as such significant segment expenses are consistent with those reported on the unaudited condensed consolidated statements of comprehensive income (loss), and include cost of revenue and related tax, selling expenses, general and administrative expenses and research and development expenses. Other segment items that are presented on the unaudited condensed consolidated statements of comprehensive income (loss) include interest income, net, other income, net, foreign exchange gain (loss), and provision (benefit) for income taxes. For significant segment expenses and other segment items incurred during the six months ended March 31, 2026 and 2025, refer to Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss). The Company manages assets on a consolidated basis as reported on the unaudited condensed consolidated balance sheets. The Company’s long-lived assets are all located in the PRC.
Recent accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
Recently issued accounting pronouncements adopted
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This ASU requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted this guidance effective October 1, 2025 and the adoption of this ASU did not have a material impact to its unaudited condensed consolidated financial statements.
Recently issued accounting pronouncements not yet adopted
In November 2024, FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income (Topic 22): Expense Disaggregation Disclosures”. This ASU requires entities to 1. disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, 2. include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles in the same disclosures as other disaggregation requirements, 3. disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and 4. disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Additionally, in January 2025, the FASB issued ASU No. 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company plans to adopt this guidance effectively October 1, 2027 and the Company is currently evaluating the impact of adopting this ASU on its unaudited condensed consolidated financial statements.
In May 2025, the FASB issued ASU No. 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Accounting Acquirer in a Business Combination Involving a Variable Interest Entity”. This ASU clarifies that when a business that is a VIE is acquired primarily with equity interests, the determination of the accounting acquirer should follow ASC 805 rather than defaulting to the primary beneficiary under ASC 810. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company plans to adopt this guidance effective October 1, 2027 and the Company is currently evaluating the impact of adopting this ASU on its unaudited condensed consolidated financial statements.
F-19
In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”. This ASU provides a practical expedient for all entities related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Topic 606. The standard is effective for annual periods beginning after December 15, 2025. Early adoption of ASU 2025-05 is permitted and should be applied prospectively. The Company plans to adopt this guidance effectively October 1, 2026 and the adoption of this ASU is not expected to have a material impact on its unaudited condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The purpose of this update is to improve the clarity and organization of interim reporting guidance and to enhance the disclosure requirements applicable to interim financial statements. ASU 2025-11 does not change the fundamental principles of interim reporting but clarifies the scope and presentation of required disclosures. A public business entity shall apply for interim reporting periods within annual reporting periods beginning after December 15, 2027. An entity other than a public business entity shall apply for interim reporting periods within annual reporting periods beginning after December 15, 2028. The Company plans to adopt this guidance effective January 1, 2028 and the Company is currently evaluating the impact of adopting this ASU on its financial statements.
Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its unaudited condensed consolidated financial condition, results of operations, cash flows or disclosures.
NOTE 3 — SHORT-TERM INVESTMENTS
The
Company’s short-term investments represent wealth management financial products purchased from PRC banks or financial
institutions with maturities within one year. The Company had short-term investments of $
NOTE 4 — ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consist of the following:
| March
31, 2026 | September 30, 2025 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
The Company’s accounts receivable primarily includes balances due from customers when the Company’s wheelchair and living aids products have been sold and delivered to customers, the Company’s contracted performance obligations have been satisfied, amount billed and the Company has an unconditional right to payment, which has not been collected as of the balance sheet dates.
For
accounts receivable, approximately
F-20
Allowance for credit losses movement is as follows:
| March
31, 2026 | September 30, 2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Additions | ||||||||
| Foreign currency translation adjustments | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
NOTE 5 — INVENTORIES, NET
Inventories, net consisted of the following:
| March
31, 2026 | September 30, 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Work-in-progress | ||||||||
| Finished goods | ||||||||
| Inventories, net | $ | $ | ||||||
The
allowance for slow-moving inventories as of March 31, 2026 and September 30, 2025 amounted to $
NOTE 6 — PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:
| March
31, 2026 | September 30,
2025 | |||||||
| Other receivable (1) | $ | $ | ||||||
| Advance to suppliers (2) | ||||||||
| Prepayment for business acquisition (3) | ||||||||
| Tax recoverable (4) | ||||||||
| Prepaid expenses (5) | ||||||||
| Deferred offering costs | ||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
| (1) |
| (2) |
| (3) |
| (4) | |
| (5) |
F-21
NOTE 7 — LEASES
The
Company leases offices spaces and employee dormitories under non-cancelable operating leases, with expiration dates between 2026 and
2027. In addition, on April 20, 2014, Taizhou Zhongjin signed a lease agreement with the landlord to lease a factory building for
The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of ROU assets and lease liabilities. Lease expenses are recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet.
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The table below presents the operating lease related assets and liabilities recorded on the balance sheets.
| March 31, 2026 | September 30, 2025 | |||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Operating lease liabilities – current | $ | $ | ||||||
| Operating lease liabilities – non-current | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of March 31, 2026 and September 30, 2025:
| March 31, 2026 | September 30, 2025 | |||||||
| Remaining lease term and discount rate: | ||||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
During
the six months ended March 31, 2026 and 2025, the Company incurred total operating lease expenses of $
Cash paid to settle the lease liabilities amounted
to $
The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2026:
| Remainder of 2026 | $ | |||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | $ |
F-22
NOTE 8 — PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net, consist of the following:
| March 31,
2026 | September 30, 2025 | |||||||
| Buildings | $ | $ | ||||||
| Machinery and equipment | ||||||||
| Motor vehicles | ||||||||
| Office and electric equipment | ||||||||
| Leasehold improvements | ||||||||
| Construction in progress (1) | ||||||||
| Subtotal | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
| (1) |
Depreciation
expense was $
NOTE 9 — LAND USE RIGHT, NET
Land use right, net, consisted of the following:
| March 31,
2026 | September 30, 2025 | |||||||
| Land use rights | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Land use right, net | $ | $ | ||||||
Amortization
expense was $
Estimated future amortization expense for land use rights is as follows:
| Years ending March 31, | ||||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| $ | ||||
As
of March 31, 2026, the Company pledged its land use right with a carrying value of approximately $
F-23
NOTE 10 — LOANS
Short-term bank loans
Short-term bank loans consisted of the following:
| March
31, 2026 | September 30, 2025 | |||||||
| Industrial and Commercial Bank of China (1) | $ | $ | ||||||
| China Merchants Bank (2) | ||||||||
| Agricultural Bank of China (3) | ||||||||
| Jiangsu Bank (4) | ||||||||
| China Construction Bank (5) | ||||||||
| Bank of Nanjing (6) | ||||||||
| Bank of Suzhou (7) | ||||||||
| Total short-term bank loans | $ | $ | ||||||
The terms of the various loan agreements related to short-term bank loans contain certain restrictive covenants which, among other things, require the Company to maintain positive net income and certain financial indicators. The terms also prohibit the Company from entering into transactions that may have a significant adverse impact on the Company’s ability to fulfil its loan obligations, including but not limited to, reorganization of the Company or its subsidiaries, disposing the Company’s business or assets, providing loans or guarantees to third parties, etc. The Company was in compliance with such covenants as of March 31, 2026 and September 30, 2025.
| (1) | On June 23, 2025, Changzhou Zhongjin entered into a loan agreement with Industrial and Commercial Bank of China to borrow an aggregate principal amount of $
On August 12, 2025, Changzhou Zhongjin entered into a loan agreement with Industrial and Commercial Bank of China to borrow an aggregate principal amount of $
On March 29, 2026, Changzhou Zhongjin entered into another loan agreement with Industrial and Commercial Bank of China to borrow an aggregate principal amount of $ |
| (2) | On December 31, 2024, Changzhou Zhongjin entered into a loan agreement with China Merchants Bank to borrow $
On November 27, 2025, Changzhou Zhongjin entered into a loan agreement with China Merchants Bank to borrow $
In addition, Changzhou Zhongjin pledged its patent rights as collateral to guarantee these two loans from China Merchants Bank. The loans were both guaranteed by Mr. Erqi Wang and repaid in full upon maturity. |
F-24
| (3) | On December 19, 2024 and December 24, 2024, Changzhou Zhongjin entered into two loan agreements with Agricultural Bank of China to borrow $
On November 19, 2025 and December 9, 2025, Changzhou Zhongjin entered into two loan agreements with Agricultural Bank of China to borrow $ |
| (4) | On March 24, 2025, Changzhou Zhongjin entered into a loan agreement with Jiangsu Bank to borrow $
On July 29, 2025, Changzhou Zhongjin entered into an additional loan agreement with Jiangsu Bank to borrow $
On October 24, 2025, Changzhou Zhongjin entered into another loan agreement with Jiangsu Bank to borrow $ |
| (5) | On November 25, 2024, December 4, 2024 and December 27, 2024, Taizhou Zhongjin entered into three supply chain financing arrangements with China Construction Bank (“CCB”) to borrow $
Subsequently, on November 24, 2025, November 24, 2025 and December 25, 2025, Taizhou Zhongjin entered into another three supply chain financing arrangements with CCB to borrow $ |
| (6) | On August 8, 2025, Changzhou Zhongjin entered into a loan agreement with Bank of Nanjing to borrow $
|
| (7) |
F-25
Long-term bank loan
Long-term bank loan consisted of the following:
| March 31, 2026 | September
30, 2025 | |||||||
| Industrial and Commercial Bank of China | $ | $ | ||||||
| Total long-term bank loan | $ | $ | ||||||
| Current portion of long-term bank loan | $ | $ | ||||||
| Non-current portion of long-term bank loan | $ | $ | ||||||
On
October 27, 2025, Anhui Zhongjin entered into a fixed-asset project loan agreement with Industrial and Commercial Bank of China, pursuant
to which the Company obtained a credit facility in the amount of $
The future maturities of long-term bank loan as of March 31, 2026 were as follows:
| Twelve months ended March 31: | ||||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| Total | $ | |||
For
the above-mentioned short-term and long-term bank loans, the Company incurred interest expenses of $
NOTE 11 — ACCOUNTS PAYABLE
Accounts payable consisted of the following:
| March
31, 2026 | September 30, 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Total accounts payable | $ | $ | ||||||
Accounts payable represents the Company’s liabilities to suppliers for raw materials and goods that have been received as of the reporting date but remain unpaid.
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NOTE 12 — ACCRUED LIABILITIES AND OTHER PAYABLES
Accrued liabilities and other payables consisted of the following:
| March
31, 2026 | September 30,
2025 | |||||||
| Accrued payroll and employee benefits | $ | $ | ||||||
| Construction in progress payable | ||||||||
| Accrued promotion expenses | ||||||||
| Security deposits payable | ||||||||
| Expenses paid by employees on the Company’s behalf | ||||||||
| Others | ||||||||
| Total accrued liabilities and other payables | $ | $ | ||||||
NOTE 13 — RELATED PARTY TRANSACTIONS
a. Accounts receivable - related parties
Accounts receivable - related parties consists of the following:
| Name | Related party relationship | March 31, 2026 | September 30, 2025 | |||||||
| Jiangsu Zhongjin Kanglu Information Technology Co., Ltd. | $ | $ | ||||||||
| Zhongjin Jingau Rehabilitation Equipment (Beijing) Co. Ltd. | ||||||||||
| Subtotal | ||||||||||
| Less: allowance for credit losses | ||||||||||
| Total accounts receivable, net - related parties | $ | $ | ||||||||
b. Due from a related party
Due from a related party consists of the following:
| Name | Related party relationship | March 31, 2026 | September 30, 2025 | |||||||
| Huaniaoyuan Catering Management (Changzhou) Co. Ltd. | $ | $ | ||||||||
| Total due from a related party | $ | $ | ||||||||
The Company paid certain expenses on behalf of its related party. Such amount due from a related party as of March 31, 2026 were non-interest bearing and repayable upon demand.
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c. Advance to suppliers - a related party
Advance to suppliers - a related party consists of the following:
| Name | Related party relationship | March 31, 2026 | September 30, 2025 | |||||||
| Chushin International Trading Co. Ltd. | $ | $ | ||||||||
| Total advance to suppliers - a related party | $ | $ | ||||||||
d. Deferred revenue – related parties
Deferred revenue –related parties consist of the following:
| Name | Related party relationship | March 31, 2026 | September 30, 2025 | |||||||
| Jinmed International Co., Ltd. | $ | $ | ||||||||
| Zhongjian Langkang Technology Development (Shanghai) Co., Ltd. | ||||||||||
| Total deferred revenue - related parties | $ | $ | ||||||||
e. Due to related parties
Due to related parties consists of the following:
| Name | Related party relationship | March 31, 2026 | September 30, 2025 | |||||||
| Mr. Erqi Wang | $ | $ | ||||||||
| Shanghai Situma Intelligent Technology Co., Ltd. | ||||||||||
| Jiangsu Zhongjin Kanglu Information Technology Co., Ltd. | ||||||||||
| Changzhou Zhongjian Kanglu Information Technology Co., Ltd | ||||||||||
| Huaniaoyuan Environmental Engineering (Changzhou) Co., Ltd. | ||||||||||
| Total due to related parties | $ | $ | ||||||||
The balance due to related parties mainly consist of advances from related parties for working capital purposes. These advances are non-interest bearing and repayable on demand.
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f. Revenue from related parties
Revenue from related parties consists of the following:
| For the Six Months Ended March 31, | ||||||||||
| Name | Related party relationship | 2026 | 2025 | |||||||
| Jinmed International Co., Ltd. | $ | $ | ||||||||
| Jiangsu Zhongjin Kanglu Information Technology Co., Ltd. | ||||||||||
| Total revenue from related parties | $ | $ | ||||||||
g. Purchase from a related party
The
Company made purchases of $
h. Other related party transactions
Mr. Erqi Wang provided guarantees in connection with the Company’s short-term bank loans (see Note 10).
NOTE 14 — TAXES
(a) Corporate Income Taxes (“CIT”)
The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.
Hong Kong
Zhongjin
HK is subject to Hong Kong profits tax at a rate of
F-29
PRC
Erhua
Med, Anhui Zhongjin, Changzhou Zhongjin and its subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income
Tax. Under the Enterprise Income Tax (“EIT”) Law of PRC, domestic enterprises and Foreign Investment Enterprises (“FIE”)
are subject to a unified
EIT
grants preferential tax treatment to High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment,
HNTEs are entitled to an income tax rate of
In
addition, based on the EIT Law of PRC, and according to the Announcement on Implementing the Preferential Income Tax Policies for Small-Scale
Minimal Profit Enterprise on March 14, 2022 and March 26, 2023, the taxable income not more than RMB
EIT
is typically governed by the local tax authority in the PRC. Each local tax authority at times may grant tax holidays to local enterprises
as a way to encourage entrepreneurship and stimulate local economy. The corporate income taxes for the six months ended March 31, 2026
and 2025 were reported at a reduced rate for both Changzhou Zhongjin and Taizhou Zhongjin for being approved as HNTEs and enjoying a
reduced income tax rate at
The components of the income tax (benefit) expenses are as follows:
| For
the Six Months Ended March 31 | ||||||||
| 2026 | 2025 | |||||||
| Current tax expenses | ||||||||
| BVI | $ | $ | ||||||
| Hong Kong | ||||||||
| PRC | ||||||||
| Deferred tax benefit | ||||||||
| BVI | ||||||||
| Hong Kong | ||||||||
| PRC | ( | ) | ( | ) | ||||
| ( | ) | ( | ) | |||||
| Income tax (benefit) expenses | $ | ( | ) | $ | ||||
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Deferred tax assets, net are composed of the following:
| March 31, 2026 | September 30, 2025 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carry-forwards | $ | $ | ||||||
| Inventory written down | ||||||||
| Allowance for credit losses | ||||||||
| Total | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets, net | $ | $ | ||||||
Movement of the valuation allowance:
| March 31, 2026 | September 30,
2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Current year addition (reduction) | ( | ) | ||||||
| Exchange difference | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
As
of March 31, 2026 and September 30, 2025, the Company’s PRC entities had net operating loss carryforwards of approximately $
The following table reconciles the China statutory rates to the Company’s effective tax rate for the six months ended March 31, 2026 and 2025:
| For
the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| China Income tax statutory rate | % | % | ||||||
| Effect of PRC tax holiday | ( | )% | % | |||||
| Permanent difference | ( | )% | % | |||||
| Research and development tax credit | % | ( | )% | |||||
| Non-PRC entity not subject PRC income tax | ( | )% | % | |||||
| Change in valuation allowance | ( | )% | % | |||||
| Effective tax rate | % | % | ||||||
The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. As of March 31, 2026, all of the Company’s tax returns of its PRC Subsidiaries, the VIE and the VIE’s subsidiaries remain open for statutory examination by PRC tax authorities.
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(b) Taxes payable
Taxes payable consist of the following:
| March
31, 2026 | September
30, 2025 | |||||||
| Income tax payable | $ | $ | ||||||
| Value added tax payable | ||||||||
| Other taxes payable | ||||||||
| Total taxes payable | $ | $ | ||||||
(c) Uncertain tax positions
The PRC tax authorities conduct periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. In general, the PRC tax authorities have up to five years to conduct examinations of the tax filings of the Company’s PRC entities. It is therefore uncertain as to whether the PRC tax authorities may take different views about the Company’s tax filings, which may lead to additional tax liabilities.
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of March 31, 2026 and September 30, 2025, the Company did not have any significant unrecognized uncertain tax positions.
NOTE 15 — LOSS PER ORDINARY SHARE
The following table presents a reconciliation of basic and diluted loss per ordinary share for the six months ended March 31, 2026 and 2025:
| For
the Six Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Numerator: | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Less: net (loss) income attributable to non-controlling interest | ( | ) | ||||||
| Net loss attributable to Jin Medical International Ltd. | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average shares outstanding - basic and diluted* | ||||||||
| Loss per ordinary share | ||||||||
| -Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| * | Retrospectively adjusted to reflect the 1-for-20 reverse share split effective on March 16, 2026. |
The Company generated a net loss for the periods presented. Accordingly, basic and diluted net loss per share is the same because the inclusion of the potentially dilutive securities would be anti-dilutive.
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NOTE 16 — CONCENTRATIONS
A majority of the Company’s revenue and expense transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB may require certain supporting documentation in order to effect the remittance.
As
of March 31, 2026 and September 30, 2025, $
For
the six months ended March 31, 2026 and 2025, one customer accounted for approximately
As
of March 31, 2026, four customers accounted for
For the six months ended March 31, 2026 and 2025, no supplier accounted for more than 10% of the Company’s total purchases.
As of March 31, 2026 and September 30, 2025, no supplier accounted for more than 10% of the accounts payable balance.
NOTE 17 — SHAREHOLDERS’ EQUITY
Ordinary Shares
Upon
the incorporation of the Company,
On
February 8, 2024, the Company formally executed a forward share split of its ordinary shares at a ratio of one pre-split ordinary share
to 20 post-split ordinary shares. After the share split, the authorized number of ordinary shares became
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On
February 3, 2026, the Company’s Board of Directors approved a
Therefore,
Statutory reserve and restricted net assets
The Company’s PRC subsidiaries, the VIE and the VIE’s subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China.
The
Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus
reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC
GAAP”). Appropriations to the statutory surplus reserve are required to be at least
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Relevant
PRC laws and regulations restrict the Company’s PRC subsidiaries, the VIE and the VIE’s subsidiaries from transferring a
portion of their net assets, equivalent to their statutory reserves and their share capital, to the Company’s shareholders in the
form of loans, advances or cash dividends. Only PRC entities’ accumulated profits may be distributed as dividends to the Company’s
shareholders without the consent of a third party. As of March 31, 2026 and September 30, 2025, the restricted amounts as determined
pursuant to PRC statutory laws totaled $
NOTE 18 — COMMITMENTS AND CONTINGENCIES
Contingencies
From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate to have a material adverse impact on the Company’s unaudited condensed consolidated financial position, results of operations and cash flows. The Company currently does not have any material legal proceedings.
Capital commitment
The
Company entered into a subcontract agreement for the construction of a new manufacturing facility in Chuzhou City, Anhui, to expand the
production capacity for our premium mobility products, particularly mid-to-high-end electric wheelchairs and senior mobility scooters.
| Twelve months ending March 31, | ||||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| $ | ||||
NOTE 19 — SEGMENT REPORTING
earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s CODM in order to allocate resources and assess performance of the segment.
The
Company manages the business activities on a consolidated basis. The management of the Company concludes that it has only
F-35
The
accounting policies of the segment are the same as those described in Note 2 - Summary of Significant Accounting Policies.
NOTE 20 — SUBSEQUENT EVENTS
On
May 29, 2026, Changzhou Zhongjin entered into a loan agreement with Bank of Communications to borrow $
On
June 8, 2026, Changzhou Zhongjin entered into a loan agreement with China Merchants Bank to borrow $
On June 9, 2026, the Company entered
into a Financial Advisory Engagement Agreement (the “Advisory Agreement”) with Goldeenridge Ventures Ltd. (“Goldeenridge”),
pursuant to which Goldeenridge agreed to provide financial advisory services in connection with a proposed asset acquisition project
involving Beijing Tongsheng Technology Co., Ltd., in a stock issuance, asset acquisition, share exchange or another structure as agreed
by the relevant parties (the “Transaction”). The Company also agreed to issue to Goldeenridge, or its designated nominee(s),
an aggregate number of Class A Ordinary Shares equal to ten percent (
On
June 29, 2026, the Company entered into a VIE Control Acquisition and Share Issuance Agreement (the “Acquisition Agreement”)
with Erhua Med, Beijing Tongsheng Technology Co., Ltd. (the “Target”), Chang Gil Lee (the “Seller”), and the
share recipients identified therein solely for the limited purposes set forth in the Acquisition Agreement. Pursuant to the Acquisition
Agreement, and subject to the satisfaction or waiver of the conditions set forth therein, the Company and Erhua Med agreed to acquire
contractual control over, and the right to receive substantially all of the economic benefits of, the Target through a series of the
VIE Agreements to be executed and delivered at the Closing. Following the Closing, Erhua Med is expected to obtain contractual control,
economic benefit rights, equity pledge rights, voting proxy rights and exclusive option rights with respect to the Target pursuant to
the VIE Agreements. Neither the Company nor Erhua Med will acquire legal title to the equity interests of the Target. As consideration
for entering into and performing the VIE Agreements and the transactions contemplated by the Acquisition Agreement, the Company agreed
that, at the Closing, it will issue Class A Ordinary Shares to the Seller and/or the Seller’s designated share recipients. The
aggregate number of Class A Ordinary Shares will be determined by dividing $
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On June 29, 2026, Taizhou Zhongjin entered
into a loan agreement with Bank of Communications to borrow $
On July 20, 2026, the Company held separate meetings of the holders
of its Class A ordinary shares and Class B ordinary shares, followed by an EGM of shareholders. All proposals submitted at the respective
meetings were approved. At the EGM, the Company’s shareholders approved, in the order presented: (i) an increase in the Company’s
authorized share capital from $
On July 21, 2026, the transactions contemplated by the Acquisition
Agreement were completed. In connection with the closing, the applicable parties executed the VIE Agreements, which became effective as
of the closing date. As a result, Erhua Med obtained contractual control over, and the right to receive substantially all of the economic
benefits of, the Target, including through the equity pledge, voting proxy and exclusive option arrangements provided under the VIE Agreements.
Accordingly, the Company became the primary beneficiary of the Target for accounting purposes and will consolidate the financial results
of the Target in accordance with U.S. GAAP beginning on July 21, 2026. At the closing, the Company issued an aggregate of
The Company evaluated the subsequent events through August 4, 2026, which is the date of the issuance of these unaudited condensed consolidated financial statements, and concluded that there are no additional subsequent events except disclosed above that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
F-37
Exhibit 99.2
JIN MEDICAL INTERNATIONAL LTD. Reports First Half of Fiscal Year 2026 Financial Results
CHANGZHOU, China, August 4, 2026 /PRNewswire/ -- JIN MEDICAL INTERNATIONAL LTD. (Nasdaq: ZJYL) (“Jin Medical”, and together with all its subsidiaries and consolidated entities, the “Company”), a NASDAQ-listed leading provider of rehabilitation medical equipment in China, today announced its unaudited financial results for the six months ended March 31, 2026.
Mr. Erqi Wang, Chairman of the Board of Directors and Chief Executive Officer of the Company, commented, “During the first half of fiscal year 2026, our revenue was affected by lower sales of other products and temporary foreign-exchange pressure on orders from our largest Japanese customer. Nevertheless, revenue from our core wheelchair products remained relatively stable, wheelchair component sales increased, and our gross margin improved to 26.9% as we continued to enhance inventory management and operating efficiency. We also increased investment in research and development to support product innovation and long-term growth. With $9.1 million in cash and $21.0 million in short-term investments as of March 31, 2026, we believe we maintain a solid financial position. Looking ahead, we will remain focused on strengthening our core product portfolio, expanding our customer base in China and overseas, advancing our production capacity, and exercising disciplined cost and working-capital management to navigate near-term market challenges and pursue sustainable growth.”
First Half of Fiscal Year 2026 Financial Summary
| ● | Total revenue was $8.9 million for the six months ended March 31, 2026, decreased by 9.7% from $9.9 million for the same period of last year. |
| ● | Gross profit remained relatively stable at $2.4 million for the six months ended March 31, 2026 and 2025. |
| ● | Gross margin was 26.9% for the six months ended March 31, 2026, compared to 24.3% for the same period of last year. |
| ● | Net loss was $0.2 million for the six months ended March 31, 2026, compared to net income of $0.01 million for the same period of last year. |
| ● | Basic and diluted loss per share were $0.01 for the six months ended March 31, 2026 and 2025. |
First Half of Fiscal Year 2026 Financial Results
Revenue
Total revenue was $8.9 million for the six months ended March 31, 2026, decreased by 9.7% from $9.9 million for the same period of last year.
| For the Six Months Ended March 31, | ||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||
| ($ millions) | Revenue | Cost of Revenue | Gross Margin | Revenue | Cost of Revenue | Gross Margin | ||||||||||||||||||
| Wheelchair | 7.1 | 5.2 | 27.3 | % | 7.3 | 5.5 | 23.7 | % | ||||||||||||||||
| Wheelchair components | 1.1 | 0.8 | 28.7 | % | 1.0 | 0.8 | 24.2 | % | ||||||||||||||||
| Other products | 0.7 | 0.5 | 19.0 | % | 1.6 | 1.2 | 27.0 | % | ||||||||||||||||
| Total | 8.9 | 6.5 | 26.9 | % | 9.9 | 7.5 | 24.3 | % | ||||||||||||||||
Revenue from wheelchair products remained relatively stable with a slight decrease of 1.4%, from $7.3 million for the six months ended March 31, 2025 to $7.1 million for the six months ended March 31, 2026. The decrease was mainly due to decreased sales of wheelchair products to our largest customer Nissin in Japan. Nissin purchases wheelchair products from us in RMB and sells them in Japanese Yen in Japan. However, due to the weakening of the Japanese Yen, profitability of Nissin was negatively impacted as their cost of wheelchair products increased. As a result, sales orders we received from Nissin decreased, and total sales to Nissin and its subsidiaries decreased by approximately $84,000 during the six months ended March 31, 2026. The management expects the impact of foreign currency fluctuation on our revenue from Nissin is temporary.
Revenue from wheelchair components increased by 9.9%, to $1.1 million for the six months ended March 31, 2026 from $1.0 million for the same period of last year. The increase was mainly due to more sales orders of wheelchair components we received during the six months ended March 31, 2026. Wheelchair components are ordered by our customers for their repair and maintenance purposes, and such orders fluctuate based on their estimated further demands.
Revenue from other products decreased by 59.1%, to $0.7 million for the six months ended March 31, 2026 from $1.6 million for the same period of last year. The decrease was mainly due to the decreased revenue of approximately $0.8 million from electric scooters, as the Company failed to obtain relevant qualifications and sales of electric scooters was ceased for the six months ended March 31, 2026.
Cost of Revenue and Related Tax
Cost of revenue and related tax decreased by 12.8%, to $6.5 million for the six months ended March 31, 2026, from $7.5 million for the same period of last year.
Gross Profit and Gross Margin
Gross profit remained relatively stable at $2.4 million for the six months ended March 31, 2026 and 2025.
Gross margin increased to 26.9% for the six months ended March 31, 2026, from 24.3% for the same period of last year. The increase was primarily attributable to higher variable costs for our standard and economy wheelchair products in the prior-year comparable period, when the Company utilized certain high-unit-price components without corresponding selling price increases to improve inventory turnover efficiency
Operating Expenses
Operating expenses were $3.0 million for the six months ended March 31, 2026, compared to $2.9 million for the same period of last year.
| ● | Our selling expenses decreased by 4.7%, to $0.71 million for the six months ended March 31, 2026, from $0.75 million for the same period of last year. The decrease was primarily attributable to lower exhibition expenses resulted from fewer trade show participations. |
| ● | Our general and administrative expenses remained relatively stable at $1.4 million for the six months ended March 31, 2026 and 2025. |
| ● | Our research and development expenses increased by 33.4%, to $0.9 million for the six months ended March 31, 2026, from $0.7 million for the same period of last year. The increase is primarily attributable to the increased research and development activities towards products development, and we invested in more manpower and materials during the six months ended March 31, 2026. |
Other Income, Net
Our net other income increased by 344.5%, to $0.5 million for the six months ended March 31, 2026, from $0.1 million for the same period of last year. The increase in net other income was mainly due to higher government grants, consisting primarily of fixed asset investment subsidies for the factory construction project of our subsidiary Anhui Zhongjin.
Net Income (Loss)
Net loss was $0.2 million for the six months ended March 31, 2026, compared to net income of $0.01 million for the same period of last year.
Basic and Diluted Loss per Share
Basic and diluted loss per share were $0.01 for the six months ended March 31, 2026 and 2025.
2
Financial Condition
As of March 31, 2026, the Company had $9.1 million in cash as compared to $7.5 million as of September 30, 2025, and $21.0 million in short-term investments as compared to $22.2 million as of September 30, 2025. As of March 31, 2026, the Company also had approximately $5.5 million of account receivable balance due from third parties. Approximately 36.3% of the March 31, 2026 balance has been subsequently collected, and the majority of the remaining balance is expected to be collected by March 31, 2027. The collection of such receivables made cash available for use in the Company’s operations as working capital, if necessary.
Net cash used in operating activities was $0.9 million for the six months ended March 31, 2026, mainly derived from a net loss of $0.2 million for the period, and net changes in our operating assets and liabilities, which mainly included a decrease in prepaid expenses and other current assets of $1.2 million.
Net cash provided by investing activities amounted to $0.2 million for the six months ended March 31, 2026, and primarily included the redemption of short-term investments of $4.6 million, which were partially offset by the payments for short-term investments of $2.6 million, and purchase of property, plant and equipment and payment for construction in progress of $1.8 million.
Net cash provided by financing activities amounted to $2.1 million for the six months ended March 31, 2026, which primarily included proceeds from short-term bank loans of $13.5 million and proceeds from long-term bank loan of $2.8 million, which was partially offset by repayments of short-term bank loans of $14.9 million.
About JIN MEDICAL INTERNATIONAL LTD.
Founded in 2006 and headquartered at Changzhou, Jiangsu Province of China, Jin Medical designs, develops, manufactures and markets wheelchairs and living aids products for people with disabilities, elderly individuals, and for rehabilitation application. Currently, Jin Medical already operates two manufacturing plants of approximately 230,000 square feet in the aggregate in Changzhou City and Taizhou City, Jiangsu Province, China. Jin Medical is currently establishing a new facility with 430,000 square feet in Chuzhou, Anhui Province, China. Jin Medical works with more than 40 distributors in China and more than 20 international distributors. The majority of Jin Medical’s wheelchair products, with more than 30 models, are sold to distributors in Japan and China. Jin Medical continuously delivers innovative wheelchair products that are both lightweight and ergonomic. For more information, please visit: http://www.jinmed.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performances, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may”, “will”, “should”, “intend”, “plan”, “strive”, “believe”, “expect”, “anticipate”, “project”, “estimate,” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks, including, but not limited to, the following: the Company’s ability to achieve its goals and strategies, the Company’s future business development and plans for future business development, including its financial conditions and results of operations, product and service demand and acceptance, reputation and brand, the impact of competition and pricing, changes in technology, government regulations, import and export restrictions, fluctuations in general economic and business conditions, and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the U.S. Securities and Exchange Commission (“SEC”). For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, as well as its current reports on Form 6-K and other filings, all of which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
For more information, please contact:
ir@jinmed.com
3