Baide (Suzhou) Medical, an enterprise with an important position in the field of minimally invasive tumors, has recently ushered in an important turning point in its development path. The company's overseas issuance and listing filing materials were recently issued by the China Securities Regulatory Commission (Guo He Han 2024 No. 14), which marks a key step in its listing in the United States. However, the IPO process was anything but smooth sailing, as the company had planned an initial public offering (IPO) in Hong Kong, which was ultimately cancelled. What is even more interesting is that, according to sources, the company has been defaulting on intermediary fees incurred in the process of listing in Hong Kong on the grounds that the account is not well funded. This behavior not only raises questions about the company's financial soundness, but also raises serious questions about the integrity of its business commitments.
Financial soundness is in doubt
Before going public in the United States, Baide Medical had experienced a tortuous road to listing on the Hong Kong stock market. The company passed the hearing of the Hong Kong Stock Exchange on September 15, 2022, and was originally scheduled to be listed on the main board of the Hong Kong Stock Exchange on October 5, when the total amount of funds raised was about 3HK$4.7 billion. However, on the eve of the listing, on October 3, 2022, the company announced that in response to the regulator's inquiry, it decided to postpone the offering and postpone the IPO after consulting with the joint global coordinators, and the grey market trading on October 3 was also considered invalid.
According to what the reporter learned from different channels, Baide Medical still owes many intermediary fees, and has officially received recovery letters from multiple contracting parties through law firms. Interestingly, during this period of time, Paterk Medical has been actively seeking to change its listing in the United States, but on the other hand, it has been defaulting on listing intermediary fees in Hong Kong for a long time on the grounds that its accounts are not well funded, which has raised questions about its financial soundness. This financial opacity can hide deeper problems, such as strained capital chains, operational inefficiencies, or worse, financial crises.
A test of integrity in business commitment
In the business world, integrity is golden. The cancellation of the planned listing in Hong Kong and the long-standing arrears of listing intermediary fees reflect the company's problems in meeting its commercial commitments. Although the company admits the existence of arrears, it has been unable to repay the loan in time on the grounds that there are insufficient funds on the books. Such behavior not only damages the company's credibility, but may also affect its foothold in the financial markets.
spacNew trends in U.S. listings and their risks
Baide Medical's choice to list on NASDAQ through SPAC is in line with the current trend of Chinese private enterprises going public in the United States. However, SPAC listings typically involve less review than traditional IPOs, which can lead to greater uncertainty and risk for investors. Especially for companies like Paterk Medical that have questions about their financial and commercial commitments, this approach to listing could further erode market confidence.
The legal disputes faced by Paterk Medical and the successive letters received by the recovery lawyer should be fully disclosed in its listing file. This transparency is a key part of the company's responsibility to investors and market regulators. Failure to adequately disclose this information may further damage the company's reputation and affect its performance in the capital markets.
Paterk Medical faced serious challenges in terms of financial soundness and meeting its commercial commitments. The company's current financial condition and creditworthiness, coupled with the new risks associated with going public through the SPAC, deserve in-depth attention from market participants. This will not only affect the company's own prospects, but may also have an impact on the overall image of Chinese enterprises in the international capital market. How Patek responds to these challenges will be key to determining its future destiny.