Haisco: CITIC Securities Co., Ltd.’s verification opinions on Haisco Pharmaceutical Group Co., Ltd.’s non-public issuance of shares in 2020 using its own funds to pay part of the funds for the investment project and replacing it with the raised funds in equal amounts
CITIC Securities Co., Ltd.
About Hisco Pharmaceutical Group Co., Ltd.
Non-public issuance of shares in 2020 will be paid with own funds
Verification opinions on raising part of the funds for investment projects and replacing them with raised funds in equal amounts
CITIC Securities Co., Ltd. (hereinafter referred to as "CITIC Securities" or the "sponsor") is the continuing supervision agency for the non-public issuance of shares of HiSco Pharmaceutical Group Co., Ltd. (hereinafter referred to as the "Company" and "Hisco") in 2020. In June 2025, it took over the original sponsor Huatai United Securities Co., Ltd. to continue to perform continuous supervision responsibilities regarding the use of unused raised funds. In accordance with relevant regulations such as the "Administrative Measures for the Sponsorship Business of Securities Issuance and Listing", "Shenzhen Stock Exchange Stock Listing Rules", "Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 1 - Standardized Operation of Main Board Listed Companies" and other relevant regulations, the matter of HiSilicon's 2020 non-public issuance of shares using its own funds to pay part of the funds for the investment project and replacing it with the raised funds in equal amounts was verified, and the verification opinions were issued as follows:
1. Basic situation of raised funds
Approved by the China Securities Regulatory Commission's "Reply on the Approval of the Non-public Issuance of Stocks by HiSco Pharmaceutical Group Co., Ltd." (CSRC License [2022] No. 869), the company non-publicly issued 40,000,000 RMB ordinary shares (A shares) on February 10, 2023. The issue price was 20.00 yuan/share, and the total funds raised were RMB. 800,000,000.00 yuan. After deducting various issuance expenses of RMB 9,133,782.42 (excluding tax), the actual net amount of funds raised was RMB 790,866,217.58 yuan. The above-mentioned receipt of funds raised has been verified by ShineWing Accounting Firm (Special General Partnership), which issued the "Capital Verification Report on Funds Raised by Non-Public Issuance of Stocks in 2020 of Hisco Pharmaceutical Group Co., Ltd." (XYZH/2022CDAA5B0008) on January 16, 2023. The company opened a special account for raised funds, stored the above-mentioned raised funds in a special account, and signed a raised funds supervision agreement with the sponsor institution and the commercial bank where the raised funds were deposited.
2. Situation of fundraising projects
The company's new drug research and development projects among the investment projects raised by non-public issuance of shares in 2020 have all obtained drug registration certificates/supplementary application approval notices and part of the contract balance to be paid has been paid. The replenishment of working capital and the repayment of bank loans have also been completed.
The company held the 21st meeting of the fifth board of directors and the 11th meeting of the fifth board of supervisors on January 3, 2025, and reviewed and approved the "Proposal on the Overall Closing of Investment Projects with Raised Funds and Follow-up Arrangements for Surplus Funds". The company will use the "Re-evaluation Project of Acetyl L-carnitine Hydrochloride Tablets after its listing in China" to save 1,641.52 million raised funds. Ten thousand yuan will be used to permanently replenish working capital; part of the remaining funds raised from the "China Phase III clinical research and marketing registration project of the new long-acting oral hypoglycemic drug HSK-7653", RMB 53.0175 million, will be used for the "China Phase III clinical research and marketing registration project of the new peripheral neuralgia treatment drug HSK16149 capsules (Chinese common name: krigabalin besylate capsules)". For details, please refer to the company’s announcement No. 2025-006 disclosed on cninfo.com and other media on January 6, 2025. This matter has been reviewed and approved at the 2025 first extraordinary general meeting of shareholders held on January 15, 2025.
The company held the 39th meeting of the fifth board of directors on May 29, 2026, and reviewed and approved the "About 2020 "Proposal to Change the Use of Part of the Funds Raised by the Annual Non-Public Issuance of Stocks, Add a Special Account for Raised Funds, and Authorize the Signing of Fund-raising Supervision Agreements and Providing Borrowings to Wholly-Owned Subsidiaries to Implement Fund-raising Investment Projects". The company will change part of the 21.9257 million yuan raised from the "temporarily deposited funds" of the non-public issuance of stocks in 2020 to be used for the "Injection Production Line Intelligent Expansion and Upgrading Project" of the wholly-owned subsidiary Liaoning Haisike Pharmaceutical Co., Ltd., 2,721.93 The change of RMB 10,000 was used for the “Sterile Preparation Digital Intelligence Green Carbon Workshop Upgrading and Expansion Project” of Shenyang Hisco Pharmaceutical Co., Ltd., a wholly-owned subsidiary. For details, please refer to the company’s announcement No. 2026-058 disclosed on cninfo.com and other media on June 2, 2026. This matter has been reviewed and approved at the 2026 second extraordinary shareholders' meeting held on July 20, 2026.
According to the "Company's 2020 Non-public Issuance of A-Share Stock Plan", "Announcement on the Overall Closing of Investment Projects with Raised Funds and Follow-up Arrangements for Surplus Funds" (Announcement Number: 2025-006) and "Announcement on Changing the Use of Part of the Funds Raised by the Non-Public Issuance of Stocks in 2020, Adding a Special Account for Raised Funds and Providing Borrowings to Wholly-Owned Subsidiaries to Implement Fund Raised Investment Projects" (Announcement Number: 2026-058), the arrangements for the use of raised funds are as follows:
Unit: Ten Thousand Yuan Pre-funding Commitment Post-funding Commitment Ending July 2026
Commitment investment projects Actual investment projects
No. Investment Amount Investment Amount Investment Amount on the 31st
New long-acting oral hypoglycemic drug HSK-7653
China Phase III clinical research and marketing registration 16,517.15 16,517.15 projects
New drugs for treating peripheral nerve pain
Long-acting oral hypoglycemic
HSK16149 capsule (Chinese common name: 39,512.00
New drug HSK-7653 5,301.75 1,428.79
Cligabalin besylate capsules) in China
1 Phase III clinical research in China
Phase III clinical research and marketing registration project
Research and listing registration items
Digital and intelligent capacity expansion and upgrade of injection production line
Head 2,192.57 0.00 construction project
Sterile preparation digital green carbon workshop upgrade and expansion
2,721.93 0.00 items
Temporarily deposit funds 12,778.60 - New type of peripheral neuralgia
treatment drugs
New drugs for treating peripheral nerve pain
HSK-16149 capsule
2 Phase II/III clinical trial of HSK-16149 capsule in China 12,406.66 12,406.66 12,406.66 Phase II/III clinical trial in China
Clinical research and marketing registration projects
Research and listing registration
Project
Acetyl-Levocarnitine Hydrochloride and Acetyl-Levocarnitine Hydrochloride Tablets are launched in China
4,013.53 4,013.53 3 Post-marketing re-evaluation project of Tingpien in China 5,655.05
Then re-evaluate the project. The remaining funds of the project will permanently supplement working capital 1,641.52 1,641.52 to supplement working capital and
4 Supplement working capital and repay bank loans 24,500.00 21,512.91 21,512.91 Repay bank loans
- Basic situation of using self-owned funds to pay part of the amount of the raised investment project and replacing it with the raised funds in equal amounts
According to the second paragraph of Article 15 of the "Supervisory Rules for Raised Funds of Listed Companies": "During the implementation of investment projects with raised funds, in principle, direct payment with raised funds should be made. If it is really difficult to pay directly with raised funds in matters such as paying personnel salaries, purchasing overseas products and equipment, etc., replacement can be implemented within six months after payment with self-raised funds." During the implementation of the raised investment project, the company has the above situations where it is really difficult to pay directly with raised funds, mainly as follows:
(1) The company held the 39th meeting of the fifth session of the Board of Directors on May 29, 2026, and reviewed and approved the "Proposal on changing the use of part of the proceeds from the non-public issuance of stocks in 2020, adding a special account for proceeds, authorizing the signing of a fund-raising supervision agreement, and providing loans to wholly-owned subsidiaries to implement fundraising projects." This matter has been reviewed and approved by the 2026 second extraordinary shareholders' meeting held on July 20, 2026. The investment project will be implemented after review and approval by the board of directors, and the approval process of the shareholders' meeting will be completed on July 20, 2026. Therefore, the expenses related to the raised investment projects from May 29, 2026 to July 20, 2026 will be advanced in advance from the company’s own funds.
(2) In order to speed up the company's bill turnover, improve the efficiency of fund use, and reduce financial costs during the implementation of the investment project, the company may pay the funds involved in the investment project in advance by means of bank acceptance bills (or endorsement transfer payments) according to actual needs.
In order to further strengthen the management of the use of raised funds, the company plans to use its own funds in the company's basic deposit account or general deposit account to pay part of the funds for the raised investment project in advance according to actual needs and subject to relevant approvals during the implementation of the raised funds, and then regularly replace the funds with raised funds in equal amounts, transfer the funds from the special account of raised funds to the company's basic deposit account or general deposit account, and this part of the replacement funds in equal amounts will be regarded as funds used for the raised investment projects. The company uses its own funds to prepay part of the funds for the investment project, and should complete the equal exchange of the raised funds within six months.
- The operating process of using own funds to pay part of the funds for a raised investment project and replacing it with an equal amount of raised funds
The operation process of the company using its own funds to pay part of the funds raised for the investment project and replacing it with the raised funds in equal amounts is as follows:
(1) Based on the implementation of the investment projects and the expenditure content of the investment projects, the company's financial department will regularly prepare a detailed list of payments for the investment projects with its own funds, which will be reviewed and approved by the project leader and financial director.
(2) After the company's financial department has approved the company's payment process, it will regularly transfer the raised investment project funds paid in advance with its own funds from the raised funds account to the company's own funds account.
(3) The financial department of the entity that implements the raised investment project shall establish a ledger for the replacement of self-owned funds by raised funds, record the time, amount, account, etc. of the transfer of raised funds from the special account to the basic deposit account or general deposit account in the ledger, and regularly notify the sponsor institution and the sponsor representative in summary.
(4) The sponsor shall continue to supervise the replacement of equal amounts of raised funds, and may exercise supervisory power by regularly or irregularly conducting on-site inspections, written inquiries, etc. on the implementing entities. The implementing entities and the banks where the raised funds are deposited shall cooperate with the sponsor's verification and inquiries.
5. Impact on the company’s daily operations
The company uses its own funds to pay part of the funds raised for investment projects and replaces them with raised funds in equal amounts. This is an operation based on relevant regulations and actual business conditions. It does not change the investment direction of the raised funds and will not have a substantial impact on the implementation of the investment projects. There is no harm to the interests of the company and investors. The company will strictly abide by relevant laws, regulations, rules and normative documents, strengthen supervision over the use of raised funds, and ensure the legal and effective use of raised funds.
6. Relevant review procedures
(1) Review status of the Audit Committee of the Board of Directors
After review, the Audit Committee believes that: the company's use of its own funds to pay part of the funds for the investment project and subsequent replacement with an equal amount of the raised funds is in line with the company's actual situation, and there is no disguised change in the investment direction of the raised funds. It is in compliance with the "Regulations on the Supervision of Funds Raised by Listed Companies", "Self-Discipline Supervision Guidelines for Listed Companies No. 1 of the Shenzhen Stock Exchange - Standardized Operation of Main Board Listed Companies" and other relevant laws and regulations. It agrees that the company will use its own funds to pay part of the funds for the investment project and replace it with an equal amount of raised funds.
(2) Review status of the board of directors
The company reviewed and approved the "About 2020" at the 44th meeting of the fifth board of directors held on August 18, 2026. "Proposal on Annual Non-Public Issuance of Stocks to Use Own Funds to Pay Part of the Funds for Raised Investment Projects and Replace It with Raised Funds in Equal Parts", it is agreed that during the implementation of the raised investment projects, the company will first use its own funds to pay part of the funds raised and invested projects, and then periodically replace the funds with raised funds in equal amounts, and transfer equal amounts of funds from the raised funds special account to the company's own capital account, and this part of the replacement funds in equal amounts will be regarded as the funds used for the raised investment projects.
7. Verification Opinions of the Sponsor
After verification, the sponsor believes that:
The company's non-public issuance of stocks in 2020 using its own funds to pay part of the funds raised for investment projects and replacing it with raised funds in equal amounts has been reviewed and approved by the Audit Committee and the Board of Directors, and the necessary approval procedures have been performed. There is no disguised change in the use of raised funds, and it will not affect the normal progress of the investment plan of raised funds and damage the interests of shareholders; the relevant matters are in compliance with the "Supervision Rules for Funds Raised by Listed Companies", "Shenzhen Stock Exchange Stock Listing Rules" and "Shenzhen Stock Exchange Self-Discipline Supervision Guidelines for Listed Companies No. 1" No. - Standardized Operation of Main Board Listed Companies" and other relevant laws, regulations and normative documents. The sponsor has no objection to the company's non-public issuance of shares in 2020 using its own funds to pay part of the funds for the investment project and replacing it with the raised funds in equal amounts.
(This page has no text, but is the signature page of "CITIC Securities Co., Ltd.'s Verification Opinions on Haisco Pharmaceutical Group Co., Ltd.'s Non-public Issuance of Stocks in 2020 Using Own Funds to Pay Part of the Funds for Raised Investment Projects and Replacement with Raised Funds in Equal Balance")
Sponsor representative:
Shen Ziquan Shao Caijie
CITIC Securities Co., Ltd.
August 20, 2026