Announcement on the Progress of Non-Operational Fund Occupation and Illegal Guarantees by the Controlling Shareholder

The company and all members of the board guarantee that the content of this information disclosure is true, accurate, and complete, without false records, misleading statements, or significant omissions.

Special Reminder:

1. Due to the existence of non-operational fund occupation and illegal guarantees, and the issuance of a negative internal control audit report for the year 2023, according to Article 9.8.1 (1), (2), and (4) of the Shenzhen Stock Exchange Listing Rules (Revised August 2023), the company's stock will be subject to special treatment of "other risk warnings" starting from May 6, 2024.
2. According to Article 9.8.4 of the Shenzhen Stock Exchange Listing Rules (Revised August 2023), if a listed company triggers the conditions in Article 9.8.1 (1) and (2), its stock trading will be subject to other risk warnings. During the risk warning period, the company must disclose progress announcements at least once a month regarding the resolution of fund occupation or illegal guarantees until the relevant circumstances are eliminated.
3. According to Section 4 of Chapter 9 of the Shenzhen Stock Exchange Listing Rules (Revised 2024), if the company fails to recover the occupied funds of 348,541.48 million yuan within six months as required, the Shenzhen Stock Exchange will suspend the company's stock trading. If the rectification is not completed within two months after the suspension, the Shenzhen Stock Exchange will implement delisting risk warnings, and if not completed within another two months, it will decide to terminate the company's stock listing.
4. According to Article 9.4.4 (6) of the Shenzhen Stock Exchange Listing Rules (Revised 2024), after disclosing risk warning announcements, the company must disclose relevant progress and risk warning announcements at least every ten trading days until the relevant circumstances are eliminated or the company's stock trading is subject to delisting risk warnings.
5. The company received a "Pre-Notice" from the Shenzhen Stock Exchange on July 3, 2024, indicating that due to the stock closing price being below 1 yuan for twenty consecutive trading days from June 3 to July 1, 2024, it may decide to terminate the company's stock listing.

I. Non-Operational Fund Occupation and Illegal Guarantees by the Controlling Shareholder and Related Parties

Changjiang Runfa Health Industry Co., Ltd. (hereinafter referred to as "the Company") discovered during its review that Changjiang Runfa Group Co., Ltd. (hereinafter referred to as "the Controlling Shareholder" or "Changjiang Runfa Group") and related parties occupied company funds. The accounting firm hired by the company, Hexin Certified Public Accountants (Special General Partnership), issued a qualified opinion on the company's 2023 financial statements and provided a special explanation regarding the fund occupation situation (Document No. Hexin Special [2024] No. 000245). The specific situation is as follows: