Arrail Group Revises Loan Agreement with Zou Qifang's Wholly-Owned Company: Principal Reduced to $6.49 Million, Repayment Period Extended by Three Years

Image source: Rier Group's announcement on connected transactions regarding the amendment of the loan agreement.

# DENTALGOODNEWS (Leading Dental Industry Media, DGN) | April 10, 2026, Arrail Group Limited (hereinafter referred to as "Arrail Group" or "the Company") announced that the Company (as the lender) has entered into a fourth amended loan agreement with Beier Holdings Limited (hereinafter referred to as "the Borrower"), a company wholly owned by Zou Qifang, the controlling shareholder and executive director of the Company. According to the agreement, both parties agreed to reduce the principal amount of the loan from USD 7.5 million to USD 6.4875 million and extend the loan term by an additional three years on top of the original 42 months, resulting in a total extended term of 78 months.

According to the announcement, this loan was primarily used to fund the Borrower's acquisition cost of approximately 9,920,675 shares during the D-3 Series pre-IPO investment in December 2017. Pursuant to the fourth amended agreement, the loan interest rate remains unchanged at an annual rate of 5.5%. The announcement stated that prior to signing the amendment agreement, the Borrower had repaid USD 800,000 on April 10, 2026, which included USD 498,640 in principal, USD 288,440 in accrued interest, and USD 12,920 in default interest.

The announcement disclosed that the original loan maturity date was March 31, 2026. A brief delay of 9 days in repayment occurred because the Borrower's anticipated third-party financing arrangement failed to materialize as planned. The Borrower has paid default interest for the aforementioned delayed period at an annual rate of 7.5% (a 2.0% premium over the contractual rate). As of the announcement date, the Borrower has cumulatively repaid approximately USD 4.51 million in principal to Arrail Group.

In light of the reduction in the outstanding loan principal, both parties agreed to release 18,000,000 pledged shares (held by Rise Day Holdings Limited). After the release, 33,337,150 shares (held by the Borrower, Zou Qifang, and Mingda International Limited) remain pledged to the Company as security, representing approximately 5.93% of the Company's total issued share capital (excluding treasury shares). Based on the closing price of HKD 1.83 per share on November 28, 2025, the total value of the remaining pledged shares is approximately HKD 61 million (approximately USD 7.79 million), which is sufficient to cover the outstanding loan amount of approximately USD 6.49 million.

Arrail Group remains in a continuous trading suspension status. According to previous reports by DGN, this is related to an independent investigation concerning payments to the founder and connected parties. As this independent investigation has not been completed as scheduled, the Company has announced the postponement of the release of its interim results for the fiscal year 2025 until the end of April 2026. The amendment to this connected loan agreement with the controlling shareholder and the payment of default interest reflect, to some extent, the Company's transparent handling of financial arrangements for connected transactions during the independent investigation period.

The Board of Directors of Arrail Group stated that, given that the value of the remaining pledged shares exceeds the outstanding loan amount and the interest rate is higher than the prevailing market time deposit rates offered by Chinese commercial banks, this loan extension is in the overall interests of the Company and its shareholders.