Special Verification Report
UBS Securities Co., Ltd. (hereinafter referred to as "UBS Securities" or "the Sponsor") is the sponsor and ongoing supervisory institution for the initial public offering of Entropy Technology Co., Ltd. (hereinafter referred to as "Entropy Technology" or "the Company"). In accordance with the relevant laws, regulations, and normative documents, including the "Regulations on the Management of Securities Issuance and Listing Sponsorship," "Regulations on the Supervision of Funds Raised by Listed Companies," "Shenzhen Stock Exchange GEM Listing Rules," and "Self-Regulatory Guidelines No. 2 for Listed Companies on the Shenzhen Stock Exchange - Standardized Operations of GEM Listed Companies," UBS Securities conducted a verification of the storage, management, and use of the funds raised by Entropy Technology for the year 2025 through regular on-site inspections, document reviews, and interviews. The specific circumstances are as follows:
1. Basic Information on the Raised Funds
(1) Actual Amount Raised and Timing of Fund Arrival
With the approval of the China Securities Regulatory Commission regarding the registration of Entropy Technology's initial public offering (CSRC Permit [2022] No. 926), Entropy Technology issued 37,123,013 shares of ordinary shares (A shares) with a par value of RMB 1.00 per share at an issuance price of RMB 43.32 per share, raising a total of RMB 1,608.17 million. After deducting issuance expenses (excluding VAT) of RMB 150.87 million, the actual net amount raised was RMB 1,457.30 million. As of August 12, 2022, all funds raised had been received, confirmed by the verification report from Tianzhi International Accounting Firm (Special General Partnership) "Tian Zhi Ye Zi [2022] No. 38658."
(2) Usage and Balance of Raised Funds
As of December 31, 2025, the balance of unutilized raised funds (including interest income and net income from financial products, after deducting bank fees) was RMB 755,767,657.13.
| Item | Amount |
|---|---|
| Net amount raised | 1,457,298,377.70 |
| Less: Cumulative funds used | 780,694,354.32 |
| Among them: Amount used for fundraising projects as of December 31, 2025 | 742,019,389.93 |
| Bank account management fees | 4,809.48 |
| Used to permanently supplement working capital | 38,670,154.91 |
| Used for external investment from oversubscription | - |
| Add: Cumulative interest and income from financial products | 79,163,633.75 |
| Balance of unutilized raised funds | 755,767,657.13 |
2. Storage and Management of Raised Funds
(1) Management of Raised Funds
To standardize the management and use of raised funds, improve the efficiency and effectiveness of fund utilization, and protect investors' interests, the Company formulated the "Management System for Raised Funds of Entropy Technology Co., Ltd." (hereinafter referred to as "the Management System") in accordance with the "Company Law of the People's Republic of China," "Securities Law of the People's Republic of China," "Regulations on the Supervision of Funds Raised by Listed Companies," "Shenzhen Stock Exchange GEM Listing Rules," and other relevant laws and regulations. This Management System was approved at the Company's first extraordinary general meeting in 2022 and was revised at the 21st meeting of the third board of directors on October 9, 2025, and at the second extraordinary general meeting of 2025 on October 27, 2025, to regulate the storage, use, project implementation management, changes in investment projects, and supervision of usage of raised funds.
(2) Tripartite and Quadripartite Supervision Agreement
In accordance with the requirements of the Shenzhen Stock Exchange and relevant regulations, and considering the Company's operational needs, the Company and UBS Securities signed a "Tripartite Supervision Agreement" with several banks on September 8, 2022. The banks included the Dongguan Tangxia Branch of China Merchants Bank, Dongguan Tangxia Branch of Agricultural Bank of China, Dongguan Tangxia Branch of Dongguan Bank, Dongguan Zhangmutou Branch of Industrial and Commercial Bank of China, and Dongguan Tangxia Branch of Industrial Bank. The Company also signed a "Quadripartite Supervision Agreement" with its wholly-owned subsidiary ZKTECO Investment Inc., its wholly-owned subsidiary Entropy Technology (Guangdong) Co., Ltd. (hereinafter referred to as "Guangdong Entropy"), and the aforementioned banks.