QL BIOPHARM Receives Supplementary Filing Requirements for Overseas Listing; Focus on Basis for Identifying Single Controlling Person Under Concerted Action Agreement and Foreign Investment Access Review for Stem Cell Sector

NewTimeSpace News: Recently, during the filing process for its overseas securities offering and listing, QL Biopharmaceutical received supplementary material requirements issued by regulatory authorities. The Company is required to provide explanations on matters including the identification of single actual controller under the concerted action agreement, pricing fairness for new shareholders, aggregation of shareholdings of related shareholders, compliance of equity incentive schemes, compliance of patent utilisation and foreign investment access, outbound investment procedures and title status of full-circulation shares. Legal counsel shall carry out verification and issue clear legal opinions.

Pursuant to the requirements, first, in accordance withApplicable Guidance for Regulatory Rules – Overseas Securities Offering and Listing No.2, the Company shall further illustrate the basis for identifying the controlling shareholder and actual controller. Emphasis shall be placed on elaborating specific reasons and rationality for recognising Zhang Xujia as the sole actual controller notwithstanding the Concerted Action Agreement signed between Zhang Xujia, Zhai Peng, Zhang Yuanyuan and Ning Wu. Second, the Company shall explain the rationality of entry prices for new shareholders admitted within the latest 12 months and the reasons for price discrepancies among different investors, and render clear conclusive opinions on whether such entry prices are fair and reasonable and whether benefit transfer exists. Meanwhile, disclosure is required on whether shareholders holding less than 5% equity are related parties. If related, relevant shareholdings shall be aggregated. Where the aggregated stake exceeds 5%, look-through verification shall be conducted in accordance with standards applicable to shareholders holding over 5%.

Third, the Company shall specify the composition and employment status of personnel participating in equity incentives, verify whether participants are related to other shareholders, directors, supervisors and senior management of the Company, and check for any persons prohibited by laws and regulations from participating in corporate equity incentives. Clear conclusive opinions shall be issued regarding the fairness of entry prices, contractual arrangements, decision-making procedures and standardised operation, as well as the legality and compliance of the incentive plan and existence of benefit transfer. Fourth, the Company shall disclose relevant business qualifications obtained. Combined with patent utilisation status, it shall compare its business and scopes of business of the Company and its subsidiaries against theSpecial Administrative Measures for Foreign Investment Access (Negative List) (2024 Version)to confirm whether operations involve sectors restricted or prohibited under the negative list for foreign investment, and verify sustained compliance with foreign investment access policies before and after the proposed offering, listing and full circulation implementation. It shall also clarify whether the Company’s drug clinical trials, pharmaceutical R&D and production involve development and application of human stem cells, gene diagnosis and treatment technologies.

Fifth, the Company shall clarify whether shares held by shareholders intending to participate in the full circulation scheme are subject to pledge, freeze or other encumbrances. Sixth, disclosure shall be made on business activities of overseas subsidiaries and specific implementation status of regulatory procedures including outbound investment approval and foreign exchange registration for establishing overseas subsidiaries, accompanied by conclusive compliance opinions. Legal counsel shall perform verification procedures and issue clear legal opinions covering all the above matters.