CR MEDICAL (01515) has released an update regarding the legal proceedings tied to the Yanhua IOT agreement, following a first-instance judgment delivered by the Beijing Second Intermediate People's Court.

The company filed a new lawsuit in June 2025, seeking a court ruling to dissolve the Yanhua IOT agreement and demanding that Yanhua Fenghuang and/or Yanhua Hospital pay relevant damages for breach of contract, as well as return funds paid under the agreement. The company has now received the first-instance judgment dated August 26, 2026.

The court's ruling confirms that the Yanhua IOT agreement was terminated on July 2, 2025. Additionally, Yanhua Fenghuang is ordered to return RMB 45.5998 million in transfer consideration for operation and management rights, plus accrued interest. Yanhua Hospital is required to return RMB 127.2868 million in outstanding interest-free loans, while the Yanhua parties must pay RMB 41.3019 million in hospital management fee losses and late fees, along with RMB 133.5581 million in losses from the cessation of comprehensive service transactions, all with applicable interest.

Neither party lodged an appeal within the designated window, meaning the judgment officially took effect on September 11, 2026. CR MEDICAL has stated it will make every effort and take all appropriate legal actions to recover the amounts awarded under the judgment, safeguarding the interests of the company and its shareholders. The timeline and outcome of enforcing the court decision will depend on practical circumstances.