Zhongtai Securities Co., Ltd.
Audit Report on Shandong Boyuan Pharmaceutical Co., Ltd.'s Termination of Initial Public Offering Investment Projects and Reinvestment of Remaining Raised Funds
Zhongtai Securities Co., Ltd. ("Zhongtai Securities" or "Sponsor") is the sponsor for Shandong Boyuan Pharmaceutical Co., Ltd. ("Boyuan Pharmaceutical," "the Company")'s initial public offering of shares and listing on the ChiNext market. In accordance with the "Administrative Measures for Securities Issuance and Listing Sponsorship Business," the "ChiNext Market Stock Listing Rules," the "Supervision Rules for Listed Company Raised Funds," and the "ChiNext Market Listed Company Self-Regulatory Guidelines No. 2 - Standardized Operation of ChiNext Market Listed Companies," among other regulations, Zhongtai Securities has conducted an audit on the termination of certain initial public offering investment projects by Boyuan Pharmaceutical and the reinvestment of the remaining raised funds into new projects. The audit report is as follows:
I. Basic Situation of Raised Funds
With the approval of the China Securities Regulatory Commission's "Approval on the Registration of Shandong Boyuan Pharmaceutical Co., Ltd.'s Initial Public Offering of Shares" (Securities Regulatory License [2024] No. 1415), Boyuan Pharmaceutical issued 25.70 million shares of RMB ordinary shares (A shares) at a par value of RMB 1 per share and an issuance price of RMB 27.76 per share. The total amount of raised funds was RMB 713.432 million. After deducting issuance expenses of RMB 85.2643 million (excluding tax), the net amount of raised funds was RMB 628.1677 million. The raised funds were transferred to the Company's designated account on December 5, 2024. Tianjian Certified Public Accountants (Special General Partnership) audited the receipt of the raised funds and issued the "Capital Verification Report" (Tianjian Verification [2024] No. 494). In accordance with relevant regulations, the Company has managed the raised funds in a special account and signed a "Tripartite Supervision Agreement for Raised Funds" with the sponsor and the commercial banks where the raised funds are deposited.
II. Use of Raised Funds
As of March 31, 2026, the Company's use of raised funds is as follows:
| No. | Project Name | Total Project Investment (RMB million) | Original Raised Funds Committed Investment (RMB million) | Adjusted Raised Funds Committed Investment (RMB million) | Cumulative Raised Funds Invested (RMB million) |
|---|---|---|---|---|---|
| 1 | 100 tons/year Precious Metal Catalyst, | 31,000.00 | 29,143.19 | 14,131.59 | 14,131.59 |
| No. | Project Name | Total Project Investment (RMB million) | Original Raised Funds Committed Investment (RMB million) | Adjusted Raised Funds Committed Investment (RMB million) | Cumulative Raised Funds Invested (RMB million) |
|---|---|---|---|---|---|
| 60 tons/year High-end Luminescent New Materials, 4,100 tons/year High-end Organic Iodine and Bromine New Materials Project (Note 1) | |||||
| 2 | 1,000 tons/year Contrast Agent Intermediate, 5,000 tons/year o-Phenylphenol Project | 35,000.00 | 19,572.04 | 19,572.04 | 9,085.64 |
| 3 | Supplementary Working Capital (Note 2) | 15,000.00 | 14,101.54 | 14,101.54 | 14,107.59 |
| 4 | Innovation and R&D Center Project (Note 1) | 25,000.00 | 0.00 | 15,194.13 | 1,707.92 |
| Total | 106,000.00 | 62,816.77 | 62,999.30 | 39,032.73 |
Note 1: On August 18, 2025, the Company convened the Second Board of Directors' Tenth Meeting and the Second Supervisory Board's Eighth Meeting. The meetings deliberated and approved the "Proposal on Changing and Terminating Initial Public Offering Raised Funds Investment Projects and Reinvesting Surplus Raised Funds into New Projects." It was agreed to adjust the total investment of the initial public offering raised funds investment project "100 tons/year Precious Metal Catalyst, 60 tons/year High-end Luminescent New Materials, 4,100 tons/year High-end Organic Iodine and Bromine New Materials Project" and terminate it. The surplus raised funds will be used for the new project "Shandong Boyuan Pharmaceutical Co., Ltd. Innovation and R&D Center Project."