Western Superconducting acts on regulatory concerns, rectifies accounting and fund use

Western Superconducting Technologies Co., Ltd. (WST) announced its comprehensive rectification report in response to administrative regulatory measures issued by the Shaanxi Securities Regulatory Bureau on August 26, 2025. The company addressed three primary areas: irregular income accounting, non-standardized use of raised funds, and inaccurate disclosure of top five client details in its 2024 annual report.

For income accounting and top five client disclosure, WST acknowledged instances of untimely revenue recognition and failure to consolidate related parties, leading to inaccurate financial reporting. The company has implemented training on accounting standards, enhanced internal controls, and improved client data management. It also mandated stricter sales document flow and regular review of income data to ensure accuracy and compliance. These rectifications are stated as complete and will be continuously enforced.

Regarding the non-standardized use of raised funds, WST identified an "empty window period" between March 30, 2025, and April 17, 2025, where idle raised funds were managed without prior board approval. The company had approved the use of up to RMB 105,000 million and RMB 95,000 million in idle raised funds for cash management, respectively, but operated without approval for a short period. WST has since strengthened staff training on regulatory rules and internal policies to prevent future occurrences.