Aoxiang Pharmaceutical Raised Funds Management System (Revised in October 2025)
Zhejiang Aoxiang Pharmaceutical Co., Ltd.
Raised funds management system
Chapter 1 General Provisions
Article 1 In order to regulate the storage, management and use of funds raised by Zhejiang Aoxiang Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), improve the efficiency of the use of raised funds, and protect the legitimate rights and interests of investors, in accordance with the "Company Law of the People's Republic of China", "Securities Law of the People's Republic of China", "Supervisory Rules for Funds Raised by Listed Companies", "Stock Listing Rules of the Shanghai Stock Exchange" and "Self-Discipline Supervision Guidelines for Listed Companies of the Shanghai Stock Exchange" No. 1 - Standardized Operations" and other relevant laws and regulations and the provisions of the "Articles of Association of Zhejiang Aoxiang Pharmaceutical Co., Ltd." (hereinafter referred to as the "Articles of Association"), this system is formulated based on the actual situation of the company.
Article 2 The term “raised funds” as mentioned in this system refers to the funds raised by a company from investors through the issuance of stocks or other equity securities and used for specific purposes, but does not include funds raised by the company for the implementation of equity incentive plans.
The term “over-raised funds” as used in this system refers to the amount of actual net raised funds that exceeds the amount of planned raised funds.
Article 3 The funds raised by the company shall be earmarked for specific purposes. The company's use of raised funds should comply with national industrial policies and relevant laws and regulations, practice the concept of sustainable development, and fulfill social responsibilities. In principle, it should be used for its main business, which is conducive to enhancing the company's competitiveness and innovation capabilities.
Article 4 The company's board of directors shall continue to pay attention to the storage, management and use of raised funds, effectively prevent investment risks, and improve the efficiency of the use of raised funds. The company's directors and senior managers shall be diligent and responsible to ensure the safety of the company's raised funds, and shall not control the company to change the use of raised funds without authorization or in disguised form.
Article 5 The company’s controlling shareholders, actual controllers and other related parties shall not appropriate the company’s raised funds, nor may they use the company’s raised funds to invest in projects (hereinafter referred to as “raised investment projects”) to obtain improper benefits.
Article 6 If a fundraising project is implemented through a company's holding subsidiary or other enterprises controlled by the company, this system shall apply.
Chapter 2 Special Account Storage of Raised Funds
Article 7 The company shall carefully select a commercial bank and open a special account for raised funds (hereinafter referred to as the "special account"). The raised funds shall be deposited in a special account established with the approval of the board of directors for centralized management. The special account shall not store non-raised funds or use them for other purposes.
If a company has raised funds twice or more, it shall set up special accounts for raised funds respectively. The excess raised funds should also be deposited in a special raised funds account for management.
Article 8 The company shall sign a three-party supervision agreement for the special account storage of raised funds with the sponsor or independent financial consultant and the commercial bank where the raised funds are deposited (hereinafter referred to as the "commercial bank") within one month after the raised funds arrive, and make a timely announcement. After the relevant agreement is signed, the company can use the raised funds. The agreement should at least include the following:
(1) The company shall centrally deposit the raised funds in a special account for raised funds;
(2) The account number of the special account for raised funds, the items of raised funds involved in the special account, and the deposit amount;
(3) The commercial bank shall provide the company with a bank statement of the special account for raised funds every month, and send a copy to the sponsor or independent financial consultant;
(4) If the company’s cumulative withdrawals from the special account for raised funds exceed 50 million yuan at one time or within 12 months and reach 20% of the net amount of the total raised funds after deducting issuance expenses (hereinafter referred to as the “net raised funds”), the company shall promptly notify the sponsor or independent financial advisor;
(5) The sponsor or independent financial consultant can go to a commercial bank to inquire about the special account information for raised funds at any time;
(6) The supervisory responsibilities of the sponsor or independent financial advisor, the notification and cooperation responsibilities of the commercial bank, and the supervision methods of the sponsor or independent financial advisor and the commercial bank on the use of funds raised by the company;
(7) Liability for breach of contract by the company, commercial bank, sponsor or independent financial consultant;
(8) If the commercial bank fails to issue statements to the sponsor or independent financial consultant in a timely manner three times, or fails to cooperate with the sponsor or independent financial consultant in inquiring and investigating the special account information, the company may terminate the agreement and cancel the special account for raised funds.
If the above-mentioned agreement is terminated early before the expiration of the validity period, the company shall sign a new agreement with the relevant parties within two weeks from the date of termination of the agreement and make a timely announcement.
Chapter 3 Management of Use of Raised Funds
Article 9 The company shall use the raised funds prudently and in accordance with the purposes listed in the public offering documents, and shall not change the purposes without authorization. Companies should truly, accurately and completely disclose the actual use of raised funds. When any situation occurs that seriously affects the normal progress of the investment plan of raised funds, the company shall promptly report to the stock exchange and make an announcement.
Article 10 In principle, funds raised by a company should be used for its main business. Raised funds may not be used to hold financial investments, and may not be invested directly or indirectly in companies whose main business is the purchase and sale of securities. A company shall not engage in the following conduct when using raised funds:
(1) Change the purpose of raised funds in disguised form through pledge, entrusted loan or other means;
(2) Providing the raised funds directly or indirectly to controlling shareholders, actual controllers and other related parties to facilitate related parties’ use of raised investment projects to obtain improper benefits;
(3) Other behaviors that violate regulations on the management of raised funds.
The understanding and application of financial investments referred to in the preceding paragraph shall be governed by the relevant provisions of the "Opinions on the Application of the Relevant Provisions of Articles 9, 10, 11, 13, 40, 57 and 60 of the Measures for the Administration of Securities Issuance and Registration of Listed Companies - Opinions on the Application of Securities and Futures Laws No. 18".
If the company discovers that the controlling shareholders, actual controllers and other related parties have appropriated the raised funds, it shall promptly request the return and disclose the reasons for the occupation, the impact on the company, the repayment and rectification plan and the progress of rectification.
Article 11 If any of the following situations occurs in a fundraising project, the company shall promptly re-evaluate the feasibility, expected income, etc. of the fundraising project and decide whether to continue to implement the project:
(1) The market environment involved in the investment project has undergone major changes;
(2) After the raised funds are received, the investment project is put on hold for more than one year;
(3) The completion period of the investment plan of raised funds is exceeded and the investment amount of raised funds does not reach 50% of the relevant plan amount;
(4) Other abnormal circumstances occur in the investment project.
If the company has the circumstances specified in the preceding paragraph, it shall disclose it in a timely manner. If it is necessary to adjust the investment plan of raised funds, the adjusted investment plan of raised funds shall be disclosed at the same time; if it involves changing the raised investment project, the relevant review procedures for changing the use of raised funds shall apply.
The company shall disclose in its annual report and semi-annual report the details of the re-examination of the company's investment projects during the reporting period.
Article 12 If a fundraising project is not expected to be completed within the original time limit and the company plans to postpone its implementation, it shall be reviewed and approved by the board of directors in a timely manner, and the sponsor or independent financial advisor shall issue a clear opinion. The company should promptly disclose the specific reasons for failure to complete the project on schedule, explain the current deposit and account status of the raised funds, whether there are any circumstances that affect the normal progress of the plan to use the raised funds, the expected completion time and phased investment plan, measures to ensure on-schedule completion after extension, etc.
Article 13 When a company uses raised funds for the following matters, it shall be reviewed and approved by the board of directors, and shall be disclosed in a timely manner after the sponsor or independent financial adviser issues clear opinions:
(1) Use raised funds to replace self-raised funds that have been invested in raised investment projects;
(2) Use temporarily idle raised funds for cash management;
(3) Use temporarily idle raised funds to temporarily supplement working capital;
(4) Change the use of raised funds;
(5) The excess raised funds will be used for projects under construction and new projects, to repurchase the company's shares and cancel them in accordance with the law. If the company has the circumstances specified in items (4) and (5) of the preceding paragraph, it shall also be reviewed and approved by the shareholders' meeting.
If relevant matters involve related transactions, asset purchases, external investments, etc., review procedures and information disclosure obligations must also be performed in accordance with the "Shanghai Stock Exchange Stock Listing Rules" and other relevant regulations.
Article 14 If a company invests in a raised investment project with self-raised funds in advance, and then replaces self-raised funds with raised funds after the raised funds are in place, it shall be implemented within six months after the raised funds are transferred into the special account.
During the implementation of a raised investment project, in principle, payment should be made directly with raised funds. 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.
Article 15 A company may conduct cash management of temporarily idle raised funds, and cash management shall be implemented through a special account for raised funds or a publicly disclosed special settlement account for products. If cash management is implemented through a product-specific settlement account, the account shall not store non-raised funds or be used for other purposes. The implementation of cash management shall not affect the normal progress of the investment plan of raised funds. Cash management products should meet the following conditions:
(1) Products with high security such as structured deposits and certificates of deposit must not be non-principal guaranteed;
(2) Good liquidity, and the product term does not exceed twelve months;
(3) Cash management products are not allowed to be pledged.
Only after the funds raised by the cash management products stipulated in the first paragraph are returned and recovered on schedule and announced, can the company carry out cash management again within the authorized period and quota.
When a company opens or cancels a special settlement account for investment products, it shall make a timely announcement.
Article 16 If a company uses temporarily idle raised funds for cash management, it shall promptly disclose the following content after deliberation by the board of directors:
(1) Basic information on the funds raised this time, including the time of raising, amount of funds raised, net amount of funds raised, investment plan, etc.;
(2) Usage of raised funds;
(3) The amount and period of cash management, whether there is any disguised change in the use of raised funds, and measures to ensure that the normal progress of the raised investment projects will not be affected;
(4) The income distribution method, investment scope and safety of cash management products;
(5) Opinions issued by the sponsor or independent financial consultant.
Companies should promptly disclose risk warning announcements and explain the risk control measures taken by the company to ensure the safety of funds when the financial status of the product issuer deteriorates, the invested products face losses, or other situations that may harm the interests of the company and investors.
Article 17 The company shall temporarily use temporarily idle raised funds to supplement working capital, which shall be implemented through a special account for raised funds and shall meet the following requirements:
(1) The purpose of the raised funds shall not be changed in any disguised manner, nor shall it affect the normal progress of the investment plan of the raised funds;
(2) It is limited to production and operation use related to the main business;
(3) The time for a single temporary replenishment of working capital shall not exceed 12 months;
(4) The expired raised funds used to temporarily replenish working capital have been returned (if applicable). Before the expiration date of supplementary working capital, the company shall return this part of the funds to the special account for raised funds and make a timely announcement on the return of raised funds.
Article 18 The company shall properly arrange the use plan of excess raised funds based on the company’s development plan and actual production and operation needs. The excess raised funds should be used for projects under construction and new projects, repurchasing the company's shares and canceling them in accordance with the law. The company shall clarify the specific use plan of the excess raised funds at the latest when the entire raised investment project of the same batch is completed, and put it into use according to the plan. The use of over-raised funds shall be resolved by the board of directors in accordance with the law. The sponsor or independent financial advisor shall express clear opinions and submit them to the shareholders' meeting for review. The company shall promptly and fully disclose the necessity and rationality of the use of over-raised funds and other relevant information. If a company uses super-raised funds to invest in projects under construction or new projects, it should also fully disclose the construction plan, investment cycle, rate of return and other information of the relevant projects.
If it is indeed necessary to use temporarily idle over-raised funds for cash management or temporary supplement of working capital, the necessity and rationality should be explained. If a company uses temporarily idle over-raised funds for cash management or temporarily replenishes working capital, the amount, time limit and other matters shall be reviewed and approved by the board of directors, the sponsor shall issue clear opinions, and the company shall disclose relevant information in a timely manner.
Article 19 After the completion of a single fundraising project, if the company uses the remaining raised funds (including interest income) from the project for other fundraising projects, it must be reviewed and approved by the board of directors, and it can only be used after the sponsor or independent financial consultant has issued a clear opinion. The company shall make a timely announcement after the board meeting.
If the remaining raised funds (including interest income) are less than 1 million or less than 5% of the committed investment amount of the raised funds for the project, they may be exempted from the procedures in the preceding paragraph, and their use shall be disclosed in the annual report.
If the company's surplus raised funds (including interest income) from a single raised investment project are used for non-raised investment projects (including supplementing working capital), the relevant procedures and disclosure obligations shall be fulfilled with reference to changing the use of raised funds.
Article 20 After all fundraising projects are completed, the company's use of surplus raised funds (including interest income) shall be reviewed and approved by the board of directors, and the sponsor or independent financial consultant shall issue clear opinions. The company shall make a timely announcement after deliberation by the board of directors. If the surplus raised funds (including interest income) account for more than 10% of the net raised funds, it must also be reviewed and approved by the shareholders' meeting.
If the remaining raised funds (including interest income) are less than 5 million yuan or less than 5% of the net raised funds, they may be exempted from the procedures in the preceding paragraph, and their use shall be disclosed in the latest periodic report.
Chapter 4 Change of Use of Raised Funds
Article 21 If the company has any of the following circumstances, it is a change of purpose of raised funds, and the board of directors shall make a resolution in accordance with the law, and the sponsor or independent financial adviser shall issue a clear opinion and submit it to the shareholders' meeting for review. The company shall disclose relevant information in a timely manner:
(1) Cancel or terminate the original investment project, implement new projects or permanently replenish working capital;
(2) Change the entity implementing the investment project;
(3) Change the implementation method of investment projects;
(4) Other circumstances determined by the China Securities Regulatory Commission and the stock exchange to change the use of raised funds.
If the company has the circumstances specified in Item (1) of the preceding paragraph, the sponsor or independent financial consultant shall, based on the relevant documents on raised funds disclosed in the previous period, explain in detail the main reasons for the changes in the raised investment project and the rationality of the previous intermediary agency’s opinions.
If the company uses the raised funds in accordance with the provisions of Article 15, Article 17 and Article 18 Paragraph 2 of this system and exceeds the amount, time limit and other matters determined by the board of directors' review process, if the circumstances are serious, it will be deemed to have changed the purpose of the raised funds without authorization.
If the implementation entity of the raised investment project changes between the company and its wholly-owned subsidiary, or if it only involves a change in the implementation location of the raised investment project, it will not be regarded as a change in the purpose of the raised funds, and the board of directors will make a resolution without completing the shareholders' meeting review procedures. The sponsor or independent financial adviser should express clear opinions on this, and the company should disclose relevant information in a timely manner.
Article 22 If the company plans to change the investment project, it shall promptly announce the following content after submitting it to the board of directors for review:
(1) The basic situation of the original investment project and the specific reasons for the change;
(2) Basic information, feasibility analysis and risk warnings of newly raised investment projects;
(3) Investment plans for newly raised investment projects;
(4) An explanation that the newly raised investment project has been obtained or is yet to be approved by the relevant departments (if applicable);
(5) Opinions of the sponsor or independent financial advisor on changes to the investment project;
(6) An explanation that changes in the investment projects need to be submitted to the shareholders’ meeting for review;
(7) Other contents required by the stock exchange.
If a newly raised investment project involves related transactions, asset purchase, or external investment, the review procedures and information disclosure obligations shall also be performed with reference to the relevant provisions of the relevant rules.
Article 23 The changed investment projects should be invested in the main business. Companies should scientifically and prudently conduct feasibility analysis of new investment projects, and be convinced that investment projects will help enhance the company's competitiveness and innovation capabilities, effectively prevent investment risks, and improve the efficiency of the use of raised funds.
Article 24 If a company changes its investment project to acquire the assets (including equity) of the controlling shareholder or actual controller, it shall ensure that it can effectively avoid horizontal competition and reduce related transactions after the acquisition.
Article 25 Except for the situation where all the investment projects have been transferred or replaced externally during the company's major asset reorganization, if the company intends to transfer or replace the investment projects externally, it shall promptly announce the following content after submitting it to the board of directors for review:
(1) The specific reasons for the external transfer or replacement of the investment project;
(2) The amount of raised funds used to invest in the project;
(3) The degree of completion and realized benefits of the project;
(4) The basic situation, feasibility analysis and risk warning of the swap-in project (if applicable);
(5) Pricing basis for transfer or replacement and related income;
(6) Opinions of the sponsor or independent financial advisor on the transfer or replacement of the investment project;
(7) An explanation that the transfer or replacement of the investment project still needs to be submitted to the shareholders’ meeting for review.
Chapter 5 Management and Supervision of Raised Funds
Article 26 The company's finance department shall set up a ledger for the use of raised funds and record in detail the expenditure of raised funds and the investment in raised funds projects.
The company's internal audit department should inspect the storage and use of raised funds at least once every quarter, and report the inspection results to the audit committee in a timely manner.
If the company's audit committee believes that there are irregularities or major risks in the company's management of raised funds or that the internal audit department fails to submit an inspection result report as specified in the preceding paragraph, it shall report to the board of directors in a timely manner, and the board of directors shall report to the stock exchange and make an announcement in a timely manner after receiving the report.
Article 27 The company's board of directors shall continue to pay attention to the actual management and use of raised funds and excess raised funds (if any), comprehensively check the progress of raised investment projects every half year, and prepare, review and disclose a "Special Report on Raised Funds". Relevant special reports shall include the basic situation of raised funds and excess raised funds, as well as the storage, management and use of funds stipulated in this system. If there is a discrepancy between the actual investment progress of a raised investment project and the investment plan, the company shall explain the specific reasons in the "Special Report on Raised Funds".
During the annual audit, the company should hire an accounting firm to issue an assurance report on the storage, management and use of raised funds, and disclose it together with the annual report.
Article 28 The sponsor or independent financial advisor shall, in accordance with the provisions of the "Measures for the Administration of the Sponsorship Business of Securities Issuance and Listing", conduct continuous supervision over the storage, management and use of the company's raised funds. If any abnormality is discovered during the continuous supervision, on-site verification shall be carried out in a timely manner. The company's sponsor or independent financial advisor shall conduct on-site inspections of the storage, management and use of the company's raised funds at least once every six months. If the sponsor institution or independent financial consultant discovers any abnormality during continuous supervision and on-site inspection, it shall urge the company to make timely rectifications and report to the stock exchange and relevant regulatory authorities in a timely manner.
After the end of each fiscal year, the company's sponsor or independent financial advisor shall issue a special verification report on the deposit, management and use of the company's annual raised funds in accordance with the regulations of the stock exchange, and disclose it together with the company's annual report. The verification report should include the following contents:
(1) The storage, management and use of raised funds and the balance of the special account;
(2) The progress of the raised funds project, including the difference from the progress of the raised funds investment plan;
(3) The use of raised funds to replace self-raised funds invested in investment projects with raised funds (if applicable);
(4) The situation and effect of using idle raised funds to supplement working capital (if applicable);
(5) Cash management of idle raised funds (if applicable);
(6) Usage of excess raised funds (if applicable);
(7) Changes in the investment direction of raised funds (if applicable);
(8) Usage of surplus raised funds (if applicable);
(9) Conclusive opinions on whether the deposit, management and use of the company’s raised funds are in compliance with regulations;
(10) Other contents required by the stock exchange.
After the end of each fiscal year, the company's board of directors shall disclose the concluding opinions of the sponsor's or independent financial consultant's special verification report and the accounting firm's assurance report in the "Special Report on Raised Funds." The company shall cooperate with the sponsor's continuous supervision, on-site inspection, and the audit work of the accounting firm, and promptly provide or apply to the bank for the necessary information related to the storage, management and use of raised funds. If the sponsor or independent financial consultant discovers that the company or commercial bank has not fulfilled the three-party supervision agreement for the deposit of raised funds in a special account as agreed, it shall urge the company to make timely rectifications and report to the stock exchange in a timely manner.
Chapter 6 Supplementary Provisions
Article 29 Matters not covered by this system shall be implemented in accordance with the relevant national laws, regulations, normative documents and the Articles of Association.
Article 30 This system will be implemented after approval by the company's shareholders' meeting. When this system is revised, the board of directors shall propose a revision plan and submit it to the shareholders' meeting for review and approval. It will not take effect until approved by the shareholders' meeting.
Article 31 The Board of Directors is responsible for interpreting this system.
Zhejiang Aoxiang Pharmaceutical Co., Ltd.
October 30, 2025