Securities code: 002432 securities abbreviation: Andon Health Co.Ltd(002432) Announcement No.: 2022-015 Andon Health Co.Ltd(002432)
Supplementary announcement on the announcement of signing major contracts for daily operation by the company’s U.S. subsidiaries
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and shall be jointly and severally liable for false records, misleading statements or major omissions in the announcement.
Announcement background:
On January 14, 2022, the company disclosed the major contract on daily operation signed by the company’s U.S. subsidiaries
The same announcement (Announcement No. 2022-012). The announcement gives the following tips on relevant risks:
“V. risk warning
The performance of the above contract will have a positive impact on the operating revenue and operating profit in 2022. During the execution of orders and contracts, there may be a risk that the contract can not be performed on schedule or in full due to the impact of local epidemic situation changes, policy changes, changes in the company’s supply chain capacity, logistics and transportation risks, unforeseen or force majeure and other factors.
It should be noted that the US government has the right to terminate the contract at any time due to its own factors.
Please make careful decisions and pay attention to preventing investment risks. “
Since it is specially pointed out in the risk prompt of the above announcement that “the U.S. government has the right to terminate the contract at any time due to its own factors”, in order to fully prompt the risks involved in the content, the board of directors of the company has decided to make a supplementary risk prompt for the above announcement, as follows:
1. Risk of uncertainty in the development of the epidemic situation in the United States: the demand for the company’s antigen home self-test kit products is directly related to the development of the epidemic situation in the United States. Virus variation, vaccination and the introduction of covid-19 drugs all have an impact on the development of the epidemic situation. Therefore, the development of the epidemic situation in the future has strong uncertainty, This uncertainty may greatly affect the implementation of the kit product contract;
2. Logistics transportation risk: due to the epidemic situation in the United States, the transportation capacity of air and sea transportation channels is tight
If the situation continues, the port is congested and the backlog of goods is serious. If the shipped goods cannot be picked up in time, they will not be delivered on time according to the contract requirements. If the delivery date is seriously affected, the company may breach the contract, or the buyer cancels the subsequent contract procurement after terminating the contract, the company shall also bear relevant losses if the contract cannot be fully implemented;
3. Quality risk: in the case of mass production, the batches of individual products may have quality problems, leading to the risk of return or even recall. This risk may lead to the buyer’s return, termination of the contract and cancellation of subsequent procurement, and the seller will bear relevant losses;
4. Supply risk: if the company cannot produce and deliver goods on time due to the change of epidemic situation in China or the decline of production capacity and output due to other force majeure factors, it may lead to the company’s breach of contract, or the buyer terminates the contract and cancels subsequent contract procurement, the company shall also bear relevant losses if the contract cannot be fully implemented;
5. Buyer’s risk: the U.S. government has the right to terminate the contract at any time due to its own factors. The above meaning means that the U.S. government can request to stop the execution of the contract without any reason and cancel the subsequent procurement. The Seller shall bear the corresponding risks and possible losses.
To sum up, the company believes that it is necessary to give sufficient risk tips on the uncertain factors in the performance of the contract. Investors are reminded that there is uncertainty whether the contract can be fully implemented.
It is hereby announced
Andon Health Co.Ltd(002432) board of directors January 15, 2022
