SANAI HEALTH GP (01889.HK) announced that the lawsuit case has been sent back to the Beijing High People's Court for a second appeal. The company has received the civil judgment issued by the Beijing High People's Court regarding the second appeal.

According to the final judgment, the ruling of the Beijing Fourth Intermediate People's Court has been revoked; the payment obligation owed by Fujian SANAI to the plaintiff has been confirmed, and the plaintiff must legally declare the above-mentioned creditor's rights in the liquidation process of Fujian SANAI, but cannot be individually repaid; the company, Lin Ouwen, and Lin Min shall bear joint liability for the litigation amount, and after fulfilling the above joint liability, they have the right to seek reimbursement from Fujian SANAI in the liquidation process; any other claims made by the plaintiff have been dismissed; and the rulings contained in the final judgment are final.

Based on the final judgment, it is expected that the litigation amount will reduce the company's cash and cash equivalents as well as net assets. The company currently has sufficient cash to settle the litigation amount. Prior to the date of the final judgment, the company did not make any provisions for estimated liabilities related to lawsuits for past years for which the company's auditors expressed a qualified opinion, as the auditors were unable to obtain sufficient appropriate audit evidence to assess whether any provision should be made.

The company is evaluating the impact of the litigation on the consolidated financial statements for the year ending December 31 of this year. After fulfilling the joint liability of the litigation, the company has the right to seek reimbursement from other defendants and related parties in accordance with the law and may take other remedial measures to minimize the company's losses