In August 2026, we received a notice of a legal proceeding (the “Litigation”) before the Dongguan First People’s Court of Guangdong Province by a plaintiff (the “Plaintiff”) against our Company, Mr. Chen Yiding, our Chairman and executive Director, Mr. Miao Jingyun and Ms. Qu Wenting, each being an executive Director, as well as certain other individuals (collectively, the “Defendants”) in relation to a dispute over liability for infringement of shareholders’ interests.
Business · p. 170
Based on the discussion with the Litigation Counsel, our PRC Legal Advisor is of the view that the Litigation is not expected to have a material adverse impact on our business, financial condition or results of operations.
As of the Latest Practicable Date, we have also been involved in an ongoing shareholders dispute at Wuxi Lertech, which involves Wuxi Lertech, Dr. Wang and Ningbo Sinomags.
During the Track Record Period, we commenced four legal proceedings involving an aggregate amount of approximately RMB78.6 million, all of which had been concluded.
In July 2021, a lawsuit was filed against us by a contractor concerning payment obligations under a construction contract.
Risk Factors · p. 53
Our PRC Legal Advisors are of the view that this dispute has been fully resolved and will have no material adverse impact on our business and operations.
One of our subsidiaries is a co-defendant in a contract dispute lawsuit filed by a third party who claims that our subsidiary and one of its customers (the other co-defendant) are liable to pay software license fees of approximately RMB3.2 million to it.
Business · p. 174
On August 24, 2026, the appellate court issued its final judgment, which upheld the dismissal of all claims against our subsidiary and ordered the other co-defendant to pay the claimed software license fees to the third party.
Business · p. 174
Our PRC Legal Advisor is of the view that the above litigation would not have a material adverse impact on our business operations, because both the court of first instance and the appellate court dismissed all claims against our subsidiary.
In 2019, the Relevant Customer purchased turnkey appliances from us and subsequently failed to settle the outstanding balance.
Business · p. 186
After multiple unsuccessful attempts to collect payment, we initiated litigation and obtained a court order freezing the Relevant Customer’s bank account.
Business · p. 186
We reached a settlement during litigation proceedings, as reflected in a court-approved mediation decision (the “Settlement”) in 2025, under which the Relevant Customer was obligated to pay us RMB1.3 million.
As of May 31, 2026, we were involved in 10 litigations that arose in our ordinary course of business, of which two had been concluded and eight remained pending at the first-instance or appellate stage.
Business · p. 180
According to our PRC Legal Advisors, such litigations arose from our ordinary course of operations, do not involve our core technology, core patents or principal assets, and will not have a material adverse effect on our future operations.