Audit Report
To Yunnan Yunyuneng New Materials Co., Ltd.:
Tianjian Shen [2026] No. 18
Address: 1366 Qianjiang Road, Hangzhou, China Website: www.pccpa.cn
I. Audit Opinion
We have audited the financial statements of Yunnan Yunyuneng New Materials Co., Ltd. (hereinafter referred to as "Yunyuneng Company"), which comprise the balance sheet as of December 31, 2025, the income statement, the cash flow statement, the statement of changes in owners' equity for the year then ended, and related notes to the financial statements.
In our opinion, the accompanying financial statements are prepared, in all material respects, in accordance with the provisions of the Accounting Standards for Business Enterprises, and fairly present the financial position of Yunyuneng Company as of December 31, 2025, and its operating results and cash flows for the year then ended.
II. Basis for Audit Opinion
We conducted our audit in accordance with the Standards on Auditing for Certified Public Accountants in China. Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of Financial Statements" section of our report. We are independent of Yunyuneng Company in accordance with the Code of Professional Ethics for Certified Public Accountants in China and the Independent Standards No. 1 – Requirements for Independence in Financial Statement Audits and Reviews, and we have fulfilled our other professional ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Emphasis of Matter — Basis of Preparation
We draw the attention of financial statement users to the description of the basis of preparation in Note II to the financial statements. The financial statements of Yunyuneng Company are prepared for the investment needs of Beijing Sifang Materials Technology Co., Ltd. Therefore, the financial statements are not suitable for other purposes. This paragraph does not affect our opinion.
Integrity, Fairness, Pragmatism, Professionalism
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IV. Other Matters — Restrictions on the Distribution and Use of the Audit Report
Our report is intended solely for Beijing Sifang Materials Technology Co., Ltd. for activities related to its investment in Yunyuneng Company and should not be distributed to or used by parties other than Beijing Sifang Materials Technology Co., Ltd. and parties related to this investment.
V. Management's and Those Charged with Governance's Responsibilities for the Financial Statements
Yunyuneng Company's management (hereinafter referred to as "Management") is responsible for the preparation of the financial statements in accordance with the provisions of the Accounting Standards for Business Enterprises so that they fairly present, and for designing, implementing, and maintaining internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing Yunyuneng Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and preparing the financial statements on the going concern basis unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Yunyuneng Company's board of directors (hereinafter referred to as "the Board") is responsible for overseeing Yunyuneng Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.