Securities Code: 002370 Securities Abbreviation: Asia-Pacific Pharmaceutical Announcement No.: 2026-030 Zhejiang Asia-Pacific Pharmaceutical Co., Ltd. Announcement on Uncovered Losses Reaching One-Third of Paid-in Capital The Company and all members of the Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed, without false records, misleading statements, or significant omissions. Zhejiang Asia-Pacific Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company") held its 8th Board of Directors' 12th Meeting on April 23, 2026, and approved the "Proposal on Uncovered Losses Reaching One-Third of Paid-in Capital." The relevant situation is hereby announced as follows: I. Overview According to the audit report issued by Zhengdazhiyuan (Shenzhen) Certified Public Accountants (Special General Partnership), as of December 31, 2025, the Company's consolidated financial statements showed undistributed profits of -1,690,956,707.64 yuan, and the Company's paid-in capital was 745,667,530 yuan. The amount of uncovered losses has exceeded one-third of the total paid-in capital. In accordance with the "Company Law" and the "Articles of Association," this matter needs to be submitted for review by the Company's shareholders' meeting. II. Main Reasons for Losses
- In 2019, the Company recognized an investment loss of RMB 1.24 billion in Shanghai Xinfenggao Investment according to accounting standards. Concurrently, the Company terminated the investment and construction of the "Wuhan Optics Valley Asia-Pacific Pharmaceutical R&D Public Service Platform Project" by its subsidiary, Wuhan Optics Valley Asia-Pacific Pharmaceutical Co., Ltd., resulting in an impairment provision of RMB 319 million for related construction in progress and fixed assets. An impairment provision of RMB 218 million was made for equity projects introduced by the former Shanghai Xinfenggao management, leading to a significant operating loss for the Company in 2019.
- In 2025, the Company's net profit attributable to shareholders of the listed company was RMB 96,307,827.65, an increase of 181.27% compared to the same period last year. This was mainly due to the sale of its wholly-owned subsidiary, Shaoxing Xingya Pharmaceutical Co., Ltd., which increased the Company's total profit by approximately RMB 149 million in 2025. The net profit attributable to shareholders of the listed company after deducting non-recurring items was -64,687,770.15 yuan, a decrease of 129.94% compared to the same period last year. Due to significant historical losses and the accrual of interest on convertible bonds, the amount of uncovered losses remains substantial. III. Mitigation Measures
- The Company will continue to deepen the reform of its marketing system, strengthen the professional development of its marketing team, and gradually enhance the overall capabilities of the marketing team and the execution of marketing strategies. It will actively explore new marketing channels and business models, and strategically position itself in the pharmaceutical sales sector. The Company will systematically carry out the introduction, development, and market promotion of high-quality pharmaceutical products, further optimize its business structure and product portfolio, broaden profit channels, and cultivate new profit growth points. The controlling shareholder's related parties will empower the Company in the pharmaceutical distribution and supply chain sectors, facilitating the sale of the Company's products through online and offline channels to help expand marketing channels. The Company will continue to focus on introducing CMO/CDMO projects and promote their rapid implementation. It will actively expand into overseas markets and advance international registration efforts. The Company will closely monitor industry policies and market changes, actively participate in national and provincial bidding and procurement, and strive to gain market access for centralized procurement items.
- The Company will continue to adhere to the development strategy of "combination of imitation and innovation, driven by innovation." It will increase investment in technological innovation, implement a strategy combining independent research and development with cooperative research and development, and deeply integrate industry, academia, and research. The Company will conduct long-term and in-depth cooperation with leading R&D companies and universities in the industry, precisely targeting projects with high input-output ratios. It will actively and prudently explore the development of improved new drugs and innovative drugs, enriching the Company's product pipeline. The Company will strengthen the development of its R&D team, accelerate talent introduction and training, and effectively improve the professional skills of R&D personnel to provide talent support for project development. The Company will continuously enhance its innovation capabilities, improve its technological R&D level, and strengthen its core competitiveness.
- The Company will continue to promote lean manufacturing, optimize supply chain management, and implement multiple measures to reduce costs and increase efficiency. It will achieve precise alignment of production plans with market demand and continue to promote energy conservation and consumption reduction. The Company will strictly control all expenses, strengthen budget management, and improve fund management to enhance fund utilization efficiency.
- The Company will proceed with the issuance of shares to specific targets as planned. Through this fundraising, the Company will gradually transition towards the research and development of improved new drugs and Class 1 innovative drugs, laying the foundation for future strategic layout and providing capital support. The Company will focus on strategic development directions, adapt to the trends of the pharmaceutical industry, and continuously deepen its presence in the pharmaceutical field through a combination of organic growth and external expansion. It will closely monitor and research investment opportunities in the healthcare industry, proactively seek external growth opportunities to enhance its core competitiveness, and increase its integration of capital, market, and technology resources. This will enrich its product pipeline, improve its industrial chain layout, and drive the Company's overall competitiveness and sustainable profitability through the dual-wheel drive of industry and capital. Hereby announced. Zhejiang Asia-Pacific Pharmaceutical Co., Ltd. Board of Directors 2026 April 25