Revised instructions on the reply to the first round examination inquiry letter of the application documents for the initial public offering and listing on the science and Innovation Board of Shanghai Lianying Medical Technology Co., Ltd
Co sponsor (lead underwriter)
(in no order)
Block 2, international trade building, No. 1, Jianguomenwai street, Beijing, No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong
27th and 28th floors, North block, excellence Times Plaza (phase II)
March, 2002
Shanghai Stock Exchange:
Shanghai Lianying Medical Technology Co., Ltd. (hereinafter referred to as the “company”, “issuer” or “Lianying medical”) has received the inquiry letter on the examination of the application documents for the initial public offering of shares and listing on the science and Innovation Board of Shanghai Lianying Medical Technology Co., Ltd. (szksh [2022] No. 45) (hereinafter referred to as the “inquiry letter”) issued by your exchange on January 22, 2022, The company has carefully studied and implemented with Citic Securities Company Limited(600030) (hereinafter referred to as ” Citic Securities Company Limited(600030) ” and “sponsor”), China International Capital Corporation Limited(601995) (hereinafter referred to as ” China International Capital Corporation Limited(601995) ” and “sponsor”), Shanghai Tongli law firm (hereinafter referred to as “issuer’s lawyer”) and PricewaterhouseCoopers Zhongtian accounting firm (special general partnership) (hereinafter referred to as “reporting accountant”), And submit the reply of the first round of inquiry letter to your office on March 19, 2022. Some contents in the reply to the first round of inquiry letters are hereby revised. The special instructions are as follows. Please review them.
Unless the context otherwise requires, the abbreviation in this amendment has the same meaning as that in the prospectus of Shanghai Lianying Medical Technology Co., Ltd. for initial public offering of shares and listing on the science and Innovation Board (application draft) (hereinafter referred to as the “prospectus”).
Unless otherwise specified, the abbreviations or terms in this reply report have the same meanings as those in the prospectus (declaration draft).
Font of this reply report:
Bold: questions listed in the inquiry letter
Song typeface: the original reply to the questions listed in the inquiry letter
Bold italics: supplementary disclosure and modification of the reply to the questions listed in the inquiry letter
This revision explains that there may be slight differences between the sum of individual data in some tables and the total of tables, which are caused by rounding in the calculation process.
catalogue
Reply to question 4 of the first round of audit inquiry letter: about asset restructuring 3. Reply to question 7 in the first round of audit inquiry letter: about revenue recognition ten
Reply to question 4 of the first round of audit inquiry letter: about asset restructuring
4.2 according to the application materials, 1) in October 2020, the issuer acquired 30% equity of Changzhou Lianying film and 75% equity of Shanghai xinman by issuing shares to purchase assets. For the acquisition of Shanghai xinman, the issuer believes that Xue min actually controlled 51.50% of the voting rights of Shanghai xinman through the agreement of concerted action and the transfer of voting rights before the acquisition, identified it as a business merger under the same control, and adjusted the original statements. 2) The issuer acquired 51% equity of Shenzhen Lianying data in 2015, of which 20% equity was transferred from Shenzhen Kingdom Sci-Tech.Ltd(600446) . During the reporting period, Shenzhen Lianying data mainly provided software development services to Shenzhen Kingdom Sci-Tech.Ltd(600446) and the amount of revenue recognized was quite different from the purchase amount publicly disclosed by Shenzhen Kingdom Sci-Tech.Ltd(600446) public.
The issuer is requested to explain: (1) the basis for determining the value of shares at the time of acquisition of Changzhou Lianying and Shanghai xinman, and the asset business integration after acquisition; (2) Combined with the actual control of Shanghai xinman before and after the acquisition, analyze whether the basis for identifying the acquisition of Shanghai xinman as a business merger under the same control is sufficient, and the reasons for adjusting the original statements; (3) The issuer’s positioning and planning of software development business, the main customers of software revenue and product content during the reporting period, whether Shenzhen Lianying data is the main body of the issuer’s software business, the reasons for mainly providing software development services to Shenzhen Kingdom Sci-Tech.Ltd(600446) after the acquisition, and the reasons for the difference between the transaction amount between the issuer and Shenzhen Kingdom Sci-Tech.Ltd(600446) and Shenzhen Kingdom Sci-Tech.Ltd(600446) public information.
Revision Description:
(II) analyze whether the basis for identifying the acquisition of Shanghai xinman as a business merger under the same control is sufficient and the reasons for adjusting the original statements in the reply of the issuer to the first round of audit inquiry letter of “4. Question 4.2 on asset restructuring”, “II. Explanation of the issuer” (II) in combination with the actual control of Shanghai xinman before and after the acquisition, and “1. Historical evolution and shareholder changes of Shanghai xinman” and “2. The actual control of Shanghai xinman before and after the acquisition, analyze whether the basis for identifying the acquisition of Shanghai xinman as a business combination under the same control is sufficient, and the reasons for adjusting the original statements” are modified and supplemented as follows:
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1. Historical evolution and shareholder changes of Shanghai xinman
(1) Established in January 2014
In January 2014, Shanghai xinman sensor technology research and Development Co., Ltd. (hereinafter referred to as “xinman sensor”) invested 5 million yuan to establish Shanghai xinman. When Shanghai xinman was established, the equity structure was as follows:
Unit: 10000 yuan
No. name of shareholder subscribed capital contribution paid in capital contribution proportion (%)
1 xinman sensor 500.00 500.00 100.00
Total 500.00 500.00 100.00
The main business of xinman sensor is the R & D, production and sales of detectors and sensors. Xue min, the issuer’s actual controller, put forward the idea of cooperative research and development after contacting xinman sensor. Therefore, in 2014, xinman sensor established Shanghai xinman and formed a team to focus on the R & D of lyso crystal for PET-CT.
In March 2014 and August 2014, Lianying medical signed a loan agreement with Shanghai xinman to lend 15 million yuan and 5 million yuan to Shanghai xinman respectively for lyso crystal research and development and plant design and decoration. Both parties clearly agreed in the loan agreement that because Shanghai xinman has the ability to develop and manufacture lyso crystals, Lianying medical intends to invest in Shanghai xinman, and the corresponding loan amount will be converted into part of the investment amount of Lianying medical to Shanghai xinman.
After the loan, the equity structure of Shanghai xinman has not changed.
(2) In June 2015, the first equity transfer
In June 2015, xinman sensor, Shen and Xintai signed the equity transfer agreement, which agreed that xinman sensor would transfer its 100% equity of Shanghai xinman (corresponding to Shanghai xinman’s registered capital of 5 million yuan) to its controlling shareholder Shen and Xintai for a consideration of 5 million yuan. On the same day, the shareholders of Shanghai xinman made a decision and agreed to the above equity transfer. After the equity transfer, the equity structure of Shanghai xinman is as follows:
Unit: 10000 yuan
No. name of shareholder subscribed capital contribution paid in capital contribution proportion (%)
Xintai 100.00 and Xintai 100.00
Total 500.00 500.00 100.00
The reason for this equity transfer is mainly due to the difference between xinman sensor and Shanghai xinman in business field and future development direction. Therefore, Shenhe Xintai, the controlling shareholder of xinman sensor, transferred 100% equity of Shanghai xinman and directly held shares of Shanghai xinman. In October 2015, Lianying medical signed a loan agreement with Shanghai xinman to further borrow 10 million yuan from Shanghai xinman for the R & D of lyso crystal. Both parties clearly agreed in the loan agreement that because Shanghai xinman has the ability to develop and manufacture lyso crystals, Lianying medical intends to invest in Shanghai xinman, and the corresponding loan amount will be converted into part of the investment amount of Lianying medical to Shanghai xinman.
In April 2015 and July 2015, Shanghai will sign a loan agreement with Shanghai xinman to provide a total loan of 10 million yuan to Shanghai xinman for the R & D of lyso crystal. Both parties clearly agreed in the loan agreement that since Shanghai xinman has the ability to develop and manufacture lyso crystals that meet the quality and technical indicators of Lianying medical, Shanghai plans to invest in Shanghai xinman in the future, and the corresponding loan amount will be converted into part of Shanghai’s future investment in Shanghai xinman.
(3) In January 2016, the second equity transfer
In December 2015, Shenhe Xintai and Shanghai Jingyun signed the equity transfer agreement, which agreed that Shenhe Xintai would transfer its 3% equity of Shanghai xinman (corresponding to Shanghai xinman’s registered capital of 150000 yuan) to Shanghai Jingyun for 150000 yuan. On the same day, the shareholders of Shanghai xinman made a decision and agreed to sign the equity transfer. After the equity transfer, the equity structure of Shanghai xinman is as follows:
Unit: 10000 yuan
No. name of shareholder subscribed capital contribution paid in capital contribution proportion (%)
1 Shenhe Xintai 485.00 485.00 97.00
2 Shanghai Jingyun [note] 15.00 15.00 3.00
Total 500.00 500.00 100.00
Note: ye Chongzhi, the technical backbone of Shanghai xinman, directly holds 100% equity of Shanghai Jingyun
According to the supplementary agreement to the equity transfer agreement signed by Shenhe Xintai, Shanghai Jingyun and Shanghai Yingzhi in December 2015 and other relevant materials: (1) the essence of this equity transfer is equity incentive to Ye Chongzhi. At the same time, these equity incentives have set two performance evaluation objectives for ye Chongzhi. If ye Chongzhi cannot complete these performance evaluation objectives, Shanghai Jingyun needs to transfer the original price of the equity involved in this transfer to Shanghai Yingzhi; (2) Shanghai Jingyun enjoys all shareholders’ rights and interests and rights other than voting rights stipulated by national laws for its current and future equity of Shanghai xinman, and transfers the voting rights corresponding to the equity involved in this transfer to Shanghai Yingzhi.
According to the resolutions of the shareholders’ meeting of Shanghai xinman on March 30, 2017 and January 1, 2018, ye Chongzhi has completed two performance assessment objectives under the supplementary agreement to the equity transfer agreement. Therefore, Shanghai Jingyun reserves all rights except the voting right of the equity involved in this transfer, and only the voting right is transferred to Shanghai Yingzhi.
According to the confirmation of Shenhe Xintai, Shanghai Jingyun and Shanghai Yingzhi, the essence of Shanghai Jingyun’s act of transferring the voting right corresponding to the 3% equity of Shanghai xinman transferred from Shenhe Xintai to Shanghai Yingzhi under the supplementary agreement to the equity transfer agreement signed in December 2015 is that Shanghai Jingyun entrusts Shanghai Yingzhi to exercise the voting right corresponding to such equity, Shanghai Yingzhi has the right to exercise such voting rights according to its own will. According to the provisions of Articles 42 and 43 of the company law of the people’s Republic of China, “the shareholders shall exercise their voting rights at the shareholders’ meeting in accordance with the proportion of capital contribution; unless otherwise stipulated in the articles of association”, “the discussion methods and voting procedures of the shareholders’ meeting shall be stipulated in the articles of association unless otherwise stipulated in this Law”; According to the provisions of Articles 11 and 12 of the articles of association of Shanghai xinman crystal material technology Co., Ltd., which are valid when the above supplementary agreement is performed, “shareholders shall exercise their voting rights according to the proportion of capital contribution”, “if a shareholder is unable to attend the shareholders’ meeting, he may entrust others in writing to participate, and the entrusted person shall exercise the rights specified in the power of attorney in accordance with the law”; The foregoing voting right entrustment complies with the relevant provisions of the company law of the people’s Republic of China and the articles of association of Shanghai xinman crystal material technology Co., Ltd. In addition, Shanghai Jingyun entrusted Shanghai Yingzhi to exercise such voting rights. There was no invalidity, revocability or other illegal circumstances stipulated in the contract law of the people’s Republic of China (repealed due to the implementation of the civil code of the people’s Republic of China) in force at that time and the civil code of the people’s Republic of China in force. Such delegation of voting rights did not violate the prohibitive provisions of laws and administrative regulations. In view of the foregoing, Shanghai Jingyun entrusted Shanghai Yingzhi to exercise the voting rights corresponding to part of the equity of Shanghai xinman, which did not violate the prohibitive provisions of laws and administrative regulations or the relevant provisions of the articles of association of Shanghai xinman.
(4) In March 2016, the capital was increased for the first time
In March 2016, Shanghai xinman, Shenhe Xintai, Shanghai Jingyun, Lianying medical, Shanghai Yingzhi and Shanghai future jointly signed the capital increase agreement of Shanghai xinman crystal material technology Co., Ltd., which agreed that Lianying medical, Shanghai Yingzhi and Shanghai will increase the capital of Shanghai xinman in the future: Lianying medical will increase the capital by 30 million yuan in currency, of which
