Q&M Dental seeks $13m from Aoxin CEO after profit guarantee shortfall

The shortfall remains unpaid as of 31 December 2024.

Q&M Dental Group is seeking repayment of $13m (RMB72.3m) from Dr. Shao Yongxin, CEO and Executive Director of Aoxin Q&M Dental Group Limited, over a shortfall under a Profit Guarantee arrangement.

The letter of demand was issued on 17 April.

The Profit Guarantee was part of a 2016 restructuring related to the spin-off and listing of Aoxin, during which Dr. Shao committed to guarantee certain profits tied to an acquisition.

The arrangement was secured by an escrow account funded by Dr. Shao and a share pledge over Aoxin shares held by Health Field Enterprises Limited, a company ultimately controlled by him.

Despite repeated reminders, the shortfall remains unpaid as of 31 December 2024.

The Board said it is now seeking legal advice on enforcement options, including the potential seizure of pledged shares under the Share Security Agreement.

The company stated that the issuance of the letter of demand is not expected to have a material impact on its financial position but advised shareholders and investors to exercise caution pending further developments.