Special Verification Report on the Storage, Management, and Use of Funds Raised by Liaoning Xinde New Materials Technology (Group) Co., Ltd. for 2025
CITIC Securities Co., Ltd. (hereinafter referred to as "CITIC Securities" or "the Sponsor") has acted as the sponsor and ongoing supervisory institution for Liaoning Xinde New Materials Technology (Group) Co., Ltd. (hereinafter referred to as "Xinde New Materials" or "the Company"). In accordance with relevant regulations including the "Administrative Measures for Sponsorship of Securities Issuance and Listing," "Regulations on the Supervision of Funds Raised by Listed Companies," "Shenzhen Stock Exchange GEM Listing Rules," and "Self-Regulatory Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 2 - Standardized Operations of GEM Listed Companies," CITIC Securities has performed its ongoing supervisory duties and conducted a verification of the storage, management, and use of the funds raised by Xinde New Materials for the year 2025. The specific circumstances of the verification are as follows:
1. Basic Information on the Raised Funds
(1) Amount of Funds Raised and Receipt Date
According to the approval from the China Securities Regulatory Commission (CSRC) [2022] No. 1124 regarding the initial public offering of shares by Liaoning Xinde New Materials Technology Co., Ltd., the Company publicly issued 17 million shares of RMB ordinary shares, with an actual issuance of 17 million shares at a price of RMB 138.88 per share. The total amount raised was RMB 236,096,000. After deducting the sponsor underwriting fees, audit fees, legal fees, information disclosure fees, and other issuance expenses totaling RMB 19,513,620, the actual amount raised was RMB 216,582,380. The funds were in place on September 1, 2022, and verified by the audit report No. ZC10338 issued by Lixin Certified Public Accountants (Special General Partnership) on September 2, 2022.
(2) Status of Fund Use and Balance as of the End of 2025
| Project | Amount |
|---|---|
| Beginning Balance | 172.49 |
| Plus: Beginning Balance for Cash Management | 126,048.00 |
| Plus: Investment Income from Financial Products Purchased with Raised Funds | 3,503.90 |
| Minus: Amount Invested in Projects this Period | 1,046.00 |
| Minus: Permanent Supplement to Working Capital from Excess Funds | 45,000.00 |
| Minus: Year-End Balance for Cash Management | 82,200.00 |
| Plus: Interest Income Less Fees | -0.38 |
| Minus: Funds in Financial Accounts that Have Matured but Not Transferred Back (including principal and income) | 1,385.04 |
| Balance as of December 31, 2025 | 92.97 |
2. 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 use, and protect the legitimate rights and interests of investors, the Company has established a "Fund Management System" in accordance with the "Company Law of the People's Republic of China," "Securities Law of the People's Republic of China," "Shenzhen Stock Exchange GEM Listing Rules," and the provisions of the "Articles of Association." According to the "Fund Management System," the Company implements special account storage for the raised funds, establishing special accounts at banks. On September 1, 2022, the Company, along with CITIC Securities, signed a "Tripartite Supervision Agreement for Special Fund Accounts" with China Construction Bank Co., Ltd. Dalian Changxing Island Branch, China Merchants Bank Co., Ltd. Dalian Branch, CITIC Bank Co., Ltd. Dalian Branch, and Bank of China Co., Ltd. Liaoyang Liaohua Branch. On October 14, 2022, the Company signed a "Quadripartite Supervision Agreement for Special Fund Accounts" with its wholly-owned subsidiary Dalian Xinde Carbon Materials Technology Co., Ltd., CITIC Bank Co., Ltd. Dalian Branch, and CITIC Securities, clarifying the rights and obligations of all parties. The tripartite and quadripartite supervision agreements do not have significant differences from the model agreements of the Shenzhen Stock Exchange. The Company has strictly complied with these agreements in the use of raised funds.