China Oral Industry Group Holdings Limited Places New Shares at an 11% Discount, Reallocates HKD 20 Million from Acquisition Reserve to Working Capital.

Source: China Oral Industry Group, "Change in Use of Proceeds and Subscription of New Shares under General Mandate"

DentalGoodNews｜China Oral Industry Group Holdings Limited (HK GEM, Stock Code: 8406) issued an announcement on July 27, 2026: reallocating approximately HKD 20 million (approximately RMB 17.6 million) of previously unutilized funds from the originally intended use for potential acquisitions or investments to general working capital. On the same day, the company entered into a Subscription Agreement with seven independent third-party individual investors, collectively subscribing for 328,200,000 new shares at a subscription price of HKD 0.056 per share, representing a discount of approximately 11.11% from the closing price on the date of the Subscription Agreement. The net proceeds to be raised are approximately HKD 18.29 million (approximately RMB 16.1 million).

Among the subscription proceeds, approximately 60% (about HKD 10.97 million, approximately RMB 9.65 million) will be used to strengthen financial resources to meet the daily operations and business development of the group's existing main businesses, including marketing, procurement of inventory and equipment, expansion of sales channels and customer networks, and recruitment of employees. Approximately 40% (about HKD 7.32 million, approximately RMB 6.44 million) will be used as general working capital, including employee salaries, rent, legal and professional fees, and daily expenses.

Source: China Oral Industry Group, "Change in Use of Proceeds and Subscription of New Shares under General Mandate"

The reallocated HKD 20 million (approximately RMB 17.6 million) originated from the net proceeds of a subscription completed by the company in January 2025 (with a total net amount of approximately HKD 31.72 million at that time, of which approximately 63.05%, or HKD 20 million, was originally planned for potential acquisition or investment opportunities). As of July 27, 2026, the group had not entered into any binding agreement regarding the relevant potential acquisition or investment opportunities. The board decided to reallocate this portion of funds as general working capital, with approximately HKD 6 million (approximately RMB 5.28 million) for general corporate, administrative, and ongoing compliance expenses; approximately HKD 5 million (approximately RMB 4.4 million) for the daily operations of the inflatable products and related accessories business; approximately HKD 5 million (approximately RMB 4.4 million) for working capital and integration of the yarn and polyester business following a recent acquisition; and approximately HKD 4 million (approximately RMB 3.52 million) for the daily working capital of the dental clinic services and dental-related products business. It is expected that all funds will be fully utilized by December 31, 2026.

Source: China Oral Industry Group, "Change in Use of Proceeds and Subscription of New Shares under General Mandate"

The announcement noted that the subscription price represents a discount of approximately 18.84% from the average closing price of HKD 0.069 over the last five consecutive trading days prior to the date of the Subscription Agreement. The subscription shares represent approximately 20% of the total issued shares as of the announcement date. Upon completion, the company's total share capital will increase from approximately 1.641 billion shares to approximately 1.970 billion shares. The shareholding ratio of Ms. Yan Ping, Chairperson and Executive Director of the company, held through Risen Thrive Limited, will decrease from 25.87% to 21.56%; Mr. Wu Motan's shareholding ratio will decrease from 16.66% to 13.88%; and the shareholding ratio of King Tower Global Absolute Return Fund will decrease from 13.89% to 11.58%. None of the subscribers will become a substantial shareholder upon completion.

In the announcement, the company stated that its existing available financial resources are tight, and it needs to obtain additional financial resources to cope with the volatile business environment and support sustainable business growth. The group is currently primarily engaged in the manufacturing and sale of inflatable products and related accessories, providing dental services and selling dental-related products, as well as the sale of yarn and polyester business. The completion of the subscription is subject to the fulfillment (or waiver, if applicable) of relevant conditions precedent, with the final deadline on or before August 17, 2026. The subscription may or may not proceed.