Special Report on the Storage and Actual Use of Raised Funds for 2025

Special Report on the Storage and Actual Use of Raised Funds for 2025

Hendi Pharmaceutical Co., Ltd. and all members of the board guarantee that the content of this announcement is true, accurate, and complete, with no false records, misleading statements, or significant omissions.

According to the "Regulations on the Supervision of Raised Funds by Listed Companies" (CSRC Announcement [2025] No. 10) issued by the China Securities Regulatory Commission and the "Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 2 - Standardized Operations of GEM Listed Companies (2025 Revision)" (Shenzhen Stock Exchange Announcement [2025] No. 481), the company provides the following special explanation regarding the storage and usage of raised funds for the year 2025.

I. Basic Situation of Raised Funds

(1) Situation of Funds Raised from Initial Public Offering

Approved by the China Securities Regulatory Commission (CSRC) document [2021] No. 3639, Hendi Pharmaceutical publicly issued 60 million shares of ordinary shares (A shares) at an issue price of RMB 25.80 per share, raising a total of RMB 1,548,000,000.00. After deducting issuance expenses, the net amount raised was RMB 1,400,732,340.85. The raised funds were transferred to the company's designated account on December 16, 2021. Da Xin Accounting Firm (Special General Partnership) verified the funds' arrival on December 16, 2021, and issued verification report No. [2021] No. 2-10059. After the funds arrived, the company stored the raised funds in a special account and signed a supervision agreement for the special account storage of raised funds with the sponsor and the bank where the funds are stored.

(2) Usage and Balance of Raised Funds in 2025

As of December 31, 2025, the company had cumulatively used RMB 60,630,840.00 of the raised funds, with RMB 7,940,360.00 used in the current year, all invested in projects funded by the raised funds. The remaining balance of raised funds at year-end was RMB 91,455,090.00 (of which net interest income after deducting fees was RMB 12,012,710.00), with RMB 89,926,340.00 used for cash management and RMB 1,528,750.00 stored in the special account for raised funds.

II. Storage and Management of Raised Funds

(1) Management of Raised Funds

To standardize the management and use of raised funds and protect investors' rights, the company has formulated the "Management System for Raised Funds" (hereinafter referred to as the "Management System") in accordance with the relevant regulations of the CSRC. The company has also signed a "Tripartite Supervision Agreement" with Hankou Bank Co., Ltd. Jingmen Branch and Hubei Bank Co., Ltd. Jingmen Branch, and a "Quadripartite Supervision Agreement" with its subsidiary Wuhan Hendi Drug Development Co., Ltd., the sponsor, and Hubei Bank Co., Ltd. Jingmen Branch, to implement strict approval for the use of raised funds to ensure that the funds are used for their intended purpose. As of December 31, 2025, the company has stored and used the raised funds in accordance with the regulations of the supervision agreement.

(2) Balance of Special Accounts for Raised Funds

As of December 31, 2025, the balance of the special accounts for raised funds is as follows:

III. Actual Use of Raised Funds in the Current Year