Announcement on the Progress of Non-Operating Fund Occupation and Irregular 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 non-operating fund occupation and irregular guarantees, the company received a negative internal control audit report for 2023. According to Article 9.8.1 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. Under Article 9.8.4 of the Shenzhen Stock Exchange Listing Rules (revised August 2023), companies whose stocks are subject to other risk warnings must disclose progress at least once a month during the warning period until the situation is resolved.
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 trading of the company's stock. If the rectification is not completed within two months after suspension, the Exchange will issue a delisting risk warning, and if not completed within another two months, the Exchange will decide to terminate the company's stock listing.
4. After disclosing the risk warning announcement according to Article 9.4.4 of the Shenzhen Stock Exchange Listing Rules (revised 2024), the company must disclose relevant progress and risk warning announcements at least every ten trading days until the situation is resolved or the 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 the company's stock price had been below 1 yuan for twenty consecutive trading days from June 3 to July 1, 2024, which may lead to termination of the stock listing.

I. Non-Operating Fund Occupation and Irregular 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 Accounting Firm (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: