**I. Pre-Reorganization in Progress**
Huawen Media Group received a decision document from Haikou Intermediate Court in October 2024, with the court deciding to initiate pre-reorganization proceedings for the company and appointing the Huawen Group liquidation team as the company's interim administrator. On August 2nd, the company announced that it had not yet received a formal ruling from Haikou Intermediate Court accepting the reorganization. Whether the court will accept the company's reorganization and whether the company can enter the reorganization process remains uncertain. Currently, the company's pre-reorganization is still awaiting further progress.
Recently, the company also released its first-half performance report, achieving operating revenue of 135 million yuan, down 22.53% year-over-year, with net profit attributable to shareholders of the listed company at -76.41 million yuan. Previously, the company was investigated and penalized by the CSRC for suspected information disclosure violations, which triggered investor compensation claims. On April 22, 2025, the company received an "Administrative Penalty Decision" issued by the Hainan Securities Regulatory Bureau, with the main violation being false records in related financial reports.
**II. Investor Compensation Requirements**
Looking back at this case, as determined by the Hainan Securities Regulatory Bureau, the company used the gross method to recognize revenue from internet advertising prepaid services conducted by subsidiaries, causing inflated operating revenue and operating costs, which led to false records in the company's disclosed 2021 annual report, 2022 interim report, and 2022 annual report. Overall, during 2021-2022, the company accumulated inflated revenue of 422 million yuan by misusing the gross method for accounting internet advertising prepaid services. It was not until April 30, 2024, that the company issued an announcement correcting the related accounting error matters.
Regarding investor compensation requirements, investors who purchased shares between April 27, 2022, and April 19, 2024 (inclusive), and sold after April 20, 2024, or still hold shares with losses, are eligible to participate in the compensation claim. It is noteworthy that investor lawsuits against Huawen Group for securities false statement cases have been submitted to the court for filing and trial, and rights protection registration is still ongoing.
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