After announcing a change to an earlier agreement, BIMI International Medical Inc. (NASDAQ: BIMI) shares were up 17.87% to trade at $2.44 at the last check.
What amendment has BIMI declared?
Yesterday, BIMI International (BIMI) stated that it has engaged in an amendment to the stock purchase agreement (the “Amendment”) that had been initially signed on April 9, 2021. In order to acquire Wuzhou Qiangsheng Hospital Co., Ltd., Suzhou Eurasia Hospital Co., Ltd., and Yunan Yuxi Minkang Hospital Co., Ltd. (collectively the “Hospitals”), BIMI International entered into an agreement.
According to the Amendment, the Hospitals’ acquisition price will drop to RMB 80,000,000 from RMB 162,000,000. The amendment also includes a reduction of the closing stock settlement from 800,000 shares of BIMI ordinary shares to 164,000 shares of BIMI common stock and a reduction of the concluding cash payment from RMB 20,000,000 to NIL.
The modification required the Hospitals’ sellers to give up RMB 20,000,000.00 in cash and 636,000 shares of BIMI common stock right now. The sellers concurred that the April 2021 agreement’s performance goals for 2021 and 2022 were not attained, and as a result, they are not eligible for either of the variable payments specified therein.
A new 2023 efficiency benchmark of RMB 5,500,000 in operating profit and a related performance payment in the amount of RMB 64,000,000 were added in the Amendment, along with certain post-closing agreements that grant BIMI International (BIMI) the right to sell the Healthcare facilities back to their original owners upon the occurrence of certain events, in light of the given away performance payments due to the Hospitals’ failure to achieve the performance targets for 2021 and 2022.
A BIMI equity move
The sale of a $2 million promissory note (the “Note”) to the company’s chairman of the board, Mr. Fnu Oudom, was recently disclosed by BIMI International (BIMI). One year following the date of issue, the principal and 6% annual interest on the Note is due and payable. The holder has the option to exercise a conversion right seven business days prior to the note’s maturity date to have the total amount of the principal and accrued interest returned in shares at a specified rate of $0.40 per share of BIMI common stock (in lieu of a cash payment).