/Zuoli Pharmaceutical: Demonstration and analysis report on the plan to issue convertible corporate bonds to unspecified objects

NEWS

Zuoli Pharmaceutical: Demonstration and analysis report on the plan to issue convertible corporate bonds to unspecified objects

Shenzhen Stock Exchange

2025/12/03

Securities code: 300181 Securities abbreviation: Zuoli Pharmaceutical

Zhejiang Zuoli Pharmaceutical Co., Ltd.

Demonstration and analysis report on the plan to issue convertible corporate bonds to unspecified objects

December 2025

In order to meet the capital needs for the implementation of the company's business strategy and business development, Zhejiang Zuoli Pharmaceutical Co., Ltd. (hereinafter referred to as "Zuoli Pharmaceutical" or the "Company"), in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), and the According to the provisions of the Municipal Company Securities Issuance Registration and Management Measures (hereinafter referred to as the "Registration Management Measures") and other relevant laws, regulations and normative documents and the Articles of Association of Zhejiang Zuoli Pharmaceutical Co., Ltd. (hereinafter referred to as the "Articles of Association"), the company plans to issue convertible corporate bonds to unspecified objects, and the total amount of funds raised is expected to not exceed 1,556.1203 million yuan (including the original amount), after deducting the issuance expenses, will be used for the following projects: "Intelligent Traditional Chinese Medicine Health Factory (Phase I)", "Wuling+X Product Research and Development Project" and "Supplementary Working Capital".

Unless otherwise specified in this report, relevant terms or abbreviations have the same meaning as in the "Plan of Zhejiang Zuoli Pharmaceutical Co., Ltd. to Issuance of Convertible Corporate Bonds to Unspecified Objects".

1. Types of securities selected for this issuance

The types of securities issued this time are convertible corporate bonds that can be converted into company stocks (hereinafter referred to as "convertible bonds"). The convertible bonds and the company's stocks converted from the convertible bonds in the future will be listed on the Growth Enterprise Market of the Shenzhen Stock Exchange.

2. The necessity of selecting convertible corporate bonds for this issuance

Debt financing methods such as bank loans are relatively simple, and the financing amount is relatively limited. If the funds for this investment project are all obtained through bank loans, on the one hand, it will increase the company's asset-liability ratio and increase financial risks; on the other hand, higher financial expenses will affect the company's profits, reduce the company's flexibility in using funds, and is not conducive to the company's continued operations. The convertible bonds issued this time can be converted into company stocks when conditions are met, which is equivalent to an option attached to the issuance of corporate bonds, so it has both equity and debt characteristics. Convertible corporate bonds usually have lower coupon rates, which can significantly reduce a company's financing costs.

This investment project with funds raised from the issuance of convertible corporate bonds to unspecified objects has been carefully demonstrated by the company. The implementation of the project will help further enhance the company's core competitiveness and enhance the company's sustainable development capabilities. For detailed analysis, please refer to the "Feasibility Analysis Report on the Use of Funds Raised by Zhejiang Zuoli Pharmaceutical Co., Ltd. Issuing Convertible Corporate Bonds to Unspecified Objects".

3. The selection scope, quantity and appropriateness of the standards for this issuance object

(1) Appropriateness of the scope of selection of objects for this issuance

The specific issuance method of this convertible bond will be determined by the company's board of directors or persons authorized by the board of directors authorized by the company's shareholders' meeting to negotiate with the sponsor (lead underwriter). The convertible bonds are issued to natural persons, legal persons, securities investment funds, and other investors in compliance with legal provisions who hold securities accounts of the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. (except those prohibited by national laws and regulations).

The convertible bonds issued this time will be placed preferentially to the company's original shareholders, and the original shareholders have the right to give up the allotment rights. The specific preferential allotment ratio and quantity will be determined by the board of directors authorized by the shareholders' meeting based on market conditions before issuance, and will be disclosed in the issuance announcement of this convertible bond.

The balance after the preferential allotment by the original shareholders (including the part that the original shareholders gave up the preferential allotment) will be carried out through a combination of offline sales to institutional investors and/or online pricing and issuance through the Shenzhen Stock Exchange trading system, and the balance will be underwritten by the underwriters. The specific issuance method is proposed to the shareholders' meeting to authorize the company's board of directors and the sponsor (lead underwriter) to negotiate and determine before the issuance.

The selection range of objects for this issuance complies with the relevant provisions of laws, regulations and normative documents such as the "Registration Management Measures", and the selection range is appropriate.

(2) Appropriateness of the number of objects in this issuance

The specific issuance method of this convertible bond will be determined by the board of directors or persons authorized by the board of directors and the sponsor (lead underwriter) authorized by the shareholders' meeting. The convertible bonds are issued to natural persons, legal persons, securities investment funds, and other investors in compliance with legal provisions who hold securities accounts of the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. (except those prohibited by national laws and regulations).

The number of objects issued this time complies with the relevant provisions of laws, regulations and normative documents such as the "Registration Management Measures", and the number of objects issued is appropriate.

(3) Appropriateness of the selection criteria for the objects of this issuance

The objects of this issuance should have certain risk identification and risk-taking capabilities, and have corresponding financial strength. The standards for the objects of this issuance comply with the relevant provisions of laws, regulations and normative documents such as the "Registration Management Measures", and the standards for the objects of the issuance are appropriate.

4. The rationality of the principles, basis, methods and procedures for pricing this issuance

(1) Principles and basis for pricing of this issuance

The company will determine the issuance period after being reviewed and approved by the Shenzhen Stock Exchange and obtaining registration approval for this issuance from the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission"), after negotiating with the sponsor (lead underwriter). The specific pricing principles for this issuance are as follows:

Bond coupon rate

The method of determining the coupon rate of the convertible bonds issued this time and the final interest rate level in each interest calculation year shall be determined by the company's shareholders meeting authorizing the board of directors to negotiate with the sponsor (lead underwriter) before issuance based on national policies, market conditions and the company's specific circumstances.

Basis for determining the initial conversion price

The initial conversion price of the convertible bonds shall not be lower than the average trading price of the company's stock on the 20 trading days before the announcement date of the prospectus (if there is a stock price adjustment due to ex-rights and ex-dividends within the 20 trading days, the average trading price on the trading day before the adjustment will be calculated based on the price adjusted for the corresponding ex-rights and ex-dividends) and the average trading price of the company's stock on the previous trading day, and shall not be revised upward. The specific initial conversion price will be determined by the company's board of directors or persons authorized by the board of directors authorized by the company's shareholders' meeting to negotiate with the sponsor (lead underwriter) based on the market and the company's specific conditions before the issuance.

Among them, the average trading price of the company's stock in the previous 20 trading days = the total trading volume of the company's stock in the previous 20 trading days/the total trading volume of the company's stock in the 20 trading days; the average trading price of the company's stock in the previous trading day = the trading volume of the company's stock in the previous trading day/the trading volume of the company's stock on that day.

Adjustment and calculation formula of stock conversion price

After this issuance, if the company distributes bonus shares, converts into capital stock, issues new shares (excluding the increase in capital stock due to the conversion of convertible bonds in this issuance), allots shares, distributes cash dividends, etc., the conversion price will be adjusted according to the following formula (retaining two decimal places, the last digit is rounded):

Distribute bonus shares or increase share capital: P = P / (1 + n);

1 0

Issuance of new shares or rights issue: P = (P +A×k)/(1+k);

1 0

The above two items are carried out simultaneously: P = (P +A×k)/(1+n+k);

1 0

Distribution of cash dividends: P = P -D;

1 0

The above three items are carried out simultaneously: P = (P -D+A×k)/(1+n+k).

1 0

Among them: P is the conversion price after adjustment, P is the conversion price before adjustment, n is the bonus share rate or the conversion rate to share capital, and A is the additional issuance.

1 0

The new stock price or allotment price, k is the issuance rate of new shares or allotment rate, and D is the cash dividend per share.

When the company encounters the above-mentioned changes in shares and/or shareholders' equity, it will adjust the conversion price in sequence and disclose relevant announcements on the China Securities Regulatory Commission's GEM information disclosure website (www.cninfo.com.cn). The announcement will state the date of adjustment of the conversion price, the adjustment method and the suspension of conversion period (if necessary). When the conversion price adjustment date is on or after the conversion application date of the convertible bond holder but before the conversion share registration date, the holder's conversion application will be executed according to the company's adjusted conversion price.

When the company may undergo a share repurchase, merger, spin-off or any other situation that changes the company's share class, number and/or shareholders' equity, which may affect the creditor's rights or conversion derivative rights of the holders of the convertible bonds issued this time, the company will adjust the conversion price based on the specific circumstances and in accordance with the principles of fairness, justice, fairness and the principle of fully protecting the rights and interests of the holders of the convertible bonds issued this time. The content and operation methods of the adjustment of the share conversion price will be formulated in accordance with the relevant national laws and regulations and the relevant provisions of the securities regulatory authorities at that time.

(2) The rationality of the pricing basis for this issuance

The average trading price of the company's stock in the previous 20 trading days = the total trading volume of the company's stock in the previous 20 trading days/the total trading volume of the company's stock in the 20 trading days; the average trading price of the company's stock in the previous trading day = the trading volume of the company's stock in the previous trading day/the trading volume of the company's stock on that day.

The basis for the pricing of this issuance complies with the relevant provisions of laws, regulations and normative documents such as the "Registration Management Measures", and the basis for the pricing of this issuance is reasonable.

(3) The rationality of the pricing methods and procedures for this issuance

The pricing methods and procedures for the issuance of convertible corporate bonds to unspecified objects are in accordance with the relevant provisions of laws, regulations and normative documents such as the "Registration Management Measures". The company has convened a board of directors to review and approve the relevant announcements in qualified information disclosure media, and will submit them to the company's shareholders' meeting for review. The pricing methods and procedures for this issuance are in compliance with the relevant provisions of laws, regulations and normative documents such as the "Registration Management Measures", and the pricing methods and procedures for this issuance are reasonable.

To sum up, the principles, basis, methods and procedures of this issuance pricing comply with the requirements of relevant laws, regulations and normative documents and are reasonable.

5. Feasibility of this issuance method

(1) This issuance complies with the relevant provisions of the Securities Law

The company has a sound and well-run organizational structure

The company has established and improved its operating organization in strict accordance with the requirements of the Company Law, Securities Law and other relevant laws, regulations and normative documents. The company's organizational structure is clear, with clear responsibilities for each department and position. Special department responsibilities have been established and are running well.

The company complies with the provisions of Article 15, Paragraph 1, Item (1) of the Securities Law, “having a sound and well-functioning organizational structure”.

The company’s average distributable profits in the past three years are sufficient to pay one year’s interest on corporate bonds.

In 2022, 2023 and 2024, the company's net profits attributable to the owners of the parent company were 273,006,700 yuan, 382,936,100 yuan and 507,771,900 yuan respectively. The average annual net profit attributable to the owners of the parent company in the past three years was 387,904,900 yuan. The total amount of the company's convertible bond issuance does not exceed RMB 1,556,120,300 (including RMB 1,556,120,300). With reference to recent issuance interest rates in the bond market and reasonable estimation, the company's average distributable profits in the past three years are sufficient to pay one year's interest on corporate bonds.

The company complies with the requirement in Article 15, Paragraph 1, Item (2) of the Securities Law that “the average distributable profits in the past three years are sufficient to pay one year’s interest on corporate bonds.”

The company’s use of raised funds complies with regulations

The company's funds raised this time plan to invest in the "Intelligent Traditional Chinese Medicine Health Factory (Phase I)", "Wuling + The funds raised by the company from the issuance of convertible bonds to unspecified objects will be used in accordance with the purposes of the funds listed in the prospectus; changes in the use of funds must be resolved by a meeting of bondholders; the funds raised by the issuance of convertible bonds to unspecified objects will not be used to make up for losses and non-productive expenses.

This issuance of the company complies with the provisions of Paragraph 2 of Article 15 of the Securities Law: "Funds raised by the public issuance of corporate bonds must be used in accordance with the purposes of funds listed in the corporate bond raising methods; changes in the purpose of funds must be resolved through a meeting of bondholders. Funds raised by the public issuance of corporate bonds shall not be used to make up for losses and non-productive expenses."

The company has the ability to continue operating

The company is a national high-tech pharmaceutical enterprise integrating scientific research, production and sales. It produces modern biological traditional Chinese medicine products based on medicinal fungus biological fermentation technology. It is mainly engaged in the research, development, production and sales of medicinal fungi Wuling and Bailing series products, traditional Chinese medicine pieces and traditional Chinese medicine formula granules. From 2022 to 2024 and January to September 2025, the company achieved operating income of 1,805,155,400 yuan, 1,942,440,400 yuan, 2,577,878,200 yuan and 227,971 yuan respectively. .34 million yuan; the net profits attributable to the owners of the parent company were 273.0067 million yuan, 382.9361 million yuan, 507.7719 million yuan and 509.9745 million yuan respectively, indicating the ability to continue operating.

The company’s current issuance complies with Paragraph 3 of Article 15 of the Securities Law. “A listed company that issues corporate bonds convertible into stocks shall, in addition to meeting the conditions specified in Paragraph 1, also comply with the provisions of Paragraph 2 of Article 12 of this Law.”

The company is not prohibited from issuing corporate bonds to the public again.

As of the date of issuance of this analysis report, the company has not violated Article 17 of the Securities Law, which prohibits the public issuance of corporate bonds again under any of the following circumstances: (1) There is a default or delay in payment of principal and interest on corporate bonds or other debts that have been publicly issued, and the situation is still continuing; (2) In violation of the provisions of this Law, the purpose of the funds raised from the public issuance of corporate bonds is changed.

To sum up, the company’s issuance complies with the relevant provisions of the Securities Law regarding the issuance conditions of convertible corporate bonds issued by listed companies to unspecified objects.

(2) This issuance complies with the relevant provisions of the "Registration Management Measures"

This issuance complies with the provisions of Items (2) to (5) of Article 9 of the "Registration Management Measures"

(1) The current directors and senior managers meet the employment requirements stipulated in laws and administrative regulations

The current directors and senior managers of the company have the qualifications stipulated in the Company Law, the GEM Stock Listing Rules of the Shenzhen Stock Exchange and other laws, administrative regulations and rules, and can perform their duties faithfully and diligently. They have no violations of Articles 147 and 148 of the Company Law, and have not been subject to administrative penalties by the China Securities Regulatory Commission in the past three years, and have not been publicly condemned by the stock exchange in the past year.

The company complies with the provisions of Article 9 of the "Registration Management Measures" "(2) Current directors and senior managers must meet the requirements stipulated in laws and administrative regulations."

(2) It has a complete business system and the ability to operate independently directly facing the market, and there is no situation that has a significant adverse impact on continued operations.

The company's personnel, assets, finance, organization, and business are independent and can operate and manage independently. It has a complete business system and the ability to operate independently directly to the market. There is no situation that has a significant adverse impact on continued operations.

The company complies with the provisions of Article 9 of the "Registration Management Measures" "(3) It has a complete business system and the ability to operate independently directly facing the market, and there is no situation that has a significant adverse impact on continued operations."

(3) The basic accounting work is standardized, the internal control system is sound and effectively implemented, the preparation and disclosure of financial statements comply with the provisions of the Accounting Standards for Business Enterprises and relevant information disclosure rules, and fairly reflect the financial status, operating results and cash flow of the listed company in all major aspects, and the financial accounting reports in the past three years have been issued with unqualified audit reports.

The company strictly complies with the requirements of the "Company Law", "Securities Law" and other relevant laws, regulations and normative documents, establishes, improves and effectively implements internal control systems, reasonably ensures legal compliance of operation and management, asset security, financial reports and related information are true and complete, improves operating efficiency and effectiveness, and promotes the realization of development strategies. The company has established and improved its corporate governance structure, formed a scientific and effective division of responsibilities and checks and balances, and ensured standardized and efficient operation of the governance structure. The company's organizational structure is clear, with clear responsibilities for each department and position. The company has established a special financial management system, which strictly stipulates and controls the organizational structure, work responsibilities, financial approval and other aspects of the finance department. The company implements an internal audit system and establishes an audit department with full-time auditors to conduct internal audit supervision of the company's financial revenue and expenditure and economic activities. The company has maintained effective internal controls related to the preparation of financial statements in all material aspects in accordance with the corporate internal control standard system.

Zhonghui Accounting Firm (Special General Partnership) audited the company's financial reports for 2022, 2023 and 2024, and issued a standard unqualified audit report.

To sum up, the company complies with the provisions of Article 9 of the "Registration Management Measures" "(4) Basic accounting work standards, the internal control system is sound and effectively implemented, the preparation and disclosure of financial statements complies with the provisions of the accounting standards for enterprises and relevant information disclosure rules, fairly reflects the financial status, operating results and cash flow of the listed company in all material aspects, and the financial accounting reports for the past three years have been issued with unqualified audit reports".

(4) Except for financial enterprises, there are no large financial investments at the end of the latest period.

As of September 30, 2025, the company did not hold any large financial investments. The company complies with the provisions of Article 9 of the "Registration Management Measures" "(5) Except for financial enterprises, there is no large financial investment at the end of the latest period".

This issuance complies with the provisions of Article 10 of the "Registration Management Measures"

This issuance complies with the provisions of Article 10 of the "Registration Management Measures", that is, the company does not have the following circumstances stipulated in the "Registration Management Measures" that prohibit the issuance of convertible bonds to unspecified objects:

(1) Changing the use of funds raised previously without making corrections or without approval from the shareholders’ meeting;

(2) The listed company or its current directors and senior managers have been subject to administrative penalties by the China Securities Regulatory Commission in the past three years, or have been publicly condemned by the stock exchange in the past year, or are being investigated by judicial authorities for suspected crimes or are being investigated by the China Securities Regulatory Commission for suspected violations of laws and regulations;

(3) The listed company or its controlling shareholder or actual controller has failed to fulfill the public commitments made to investors in the past year;

(4) The listed company or its controlling shareholder or actual controller has committed criminal crimes of corruption, bribery, misappropriation of property, misappropriation of property or undermining the order of the socialist market economy in the past three years, or has committed major illegal acts that seriously damage the interests of the listed company, the legitimate rights and interests of investors, and the public interests of society.

The company is not prohibited from issuing convertible bonds to unspecified objects as stipulated in Article 10 of the "Registration and Management Measures".

This issuance complies with the provisions of Articles 12 and 15 of the "Registration Management Measures"

The total amount of funds raised by the company from this issuance is expected to not exceed 1,556.1203 million yuan (including the original amount). After deducting the issuance expenses, it will be used for the following projects: "Intelligent Traditional Chinese Medicine Health Factory (Phase I)", "Wuling+X Product Research and Development Project" and "Supplementary Working Capital".

The use of funds raised by the company in this issuance complies with the provisions of Article 12 of the "Registration Management Measures": (1) It complies with national industrial policies and relevant laws and administrative regulations on environmental protection, land management, etc.; (2) Except for financial enterprises, the use of funds raised in this issue shall not be used to hold financial investments, and shall not be directly used Or invest indirectly in a company whose main business is buying and selling securities; (3) After the implementation of the raised funds project, there will be no new horizontal competition or unfair related transactions that have a significant adverse impact on the controlling shareholder, actual controller and other companies controlled by it, or seriously affect the independence of the company's production and operations.

The use of funds raised in this issuance is not used to make up for losses and non-productive expenditures, and is in compliance with the provisions of Article 15 of the "Registration Management Measures" "When a listed company issues convertible bonds, the use of raised funds shall comply with the provisions of Article 12 of these Measures, and shall not be used to make up for losses and non-productive expenses."

This issuance complies with the provisions of Article 13 of the "Registration Management Measures"

(1) Have a sound and well-functioning organizational structure

The company has established a sound company operating organizational structure in strict accordance with the requirements of the Company Law, Securities Law and other relevant laws, regulations and normative documents. The company's organizational structure is clear, with clear responsibilities for each department and position. Special department responsibilities have been established and are running well.

In summary, the company complies with the provisions of Article 13 of the "Registration Management Measures" "(1) Having a sound and well-functioning organizational structure".

(2) The average distributable profits in the past three years are sufficient to pay one year’s interest on corporate bonds

In 2022, 2023 and 2024, the company's net profits attributable to the owners of the parent company were 273.0067 million yuan, 382.9361 million yuan and 507.7719 million yuan respectively. The average distributable profit in the past three years was 387.9049 million yuan. The issuance of convertible bonds to unspecified objects is calculated based on the raised funds of 1,556,120,300 yuan. With reference to the recent issuance interest rate levels in the convertible corporate bond market and reasonable estimation, the company's average distributable profits in the past three years are sufficient to pay one year's interest on the convertible corporate bonds.

In summary, the company complies with the provisions of Article 13 of the "Registration Management Measures" "(2) The average distributable profits in the past three years are sufficient to pay one year's interest on corporate bonds."

(3) Have a reasonable asset-liability structure and normal cash flow

As of the end of 2022, the end of 2023, the end of 2024 and the end of September 2025, the company's consolidated asset-liability ratios are 24.24%, 23.52%, 29.37% and 31.46% respectively, and the asset-liability structure is reasonable. In 2022, 2023, 2024 and January-September 2025, the company's net cash flows generated from operating activities were 318.5911 million yuan, 288.4610 million yuan, 297.0472 million yuan and 266.0014 million yuan respectively. The company's cash flows are normal and in line with the actual operating conditions.

As of the end of September 2025, the company's net assets were 3,182,698,600 yuan. The convertible corporate bonds proposed to be issued this time will not exceed 1,556.1203 million yuan (including the principal amount). Assuming that the convertible corporate bonds are calculated at the maximum amount of 1,556.1203 million yuan, after the issuance is completed, the company's cumulative bond balance will account for 48.89% of the company's net assets as of the end of September 2025, which will not exceed 50% of the net assets at the end of the most recent period.

In summary, the company complies with the provisions of Article 13 of the "Registration Management Measures" "(3) Having a reasonable asset and liability structure and normal cash flow".

This issuance complies with the provisions of Article 14 of the "Registration Management Measures"

The company does not have the following circumstances stipulated in Article 14 of the "Registration and Management Measures" that prohibit the issuance of convertible bonds: (1) The fact that it has defaulted on publicly issued corporate bonds or other debts or delayed the payment of principal and interest is still continuing; (2) Violates the provisions of the Securities Law and changes the use of funds raised from the public issuance of corporate bonds.

This issuance complies with the provisions of Article 40 of the "Registration Management Measures"

The company is issuing convertible bonds to unspecified objects, and the funds raised will not exceed 1,556,120,300 yuan (including the principal amount). After deducting the issuance expenses, it will be used for the following projects: "Intelligent Traditional Chinese Medicine Health Factory (Phase I)", "Wuling+X Product Research and Development Project" and "Supplementary Working Capital". The investment projects with raised funds revolve around the company's main business. They are designed by the company based on actual production and operation needs, and the financing scale is determined through rigorous calculations.

In summary, this issuance complies with the provisions of Article 40 of the "Registration Management Measures" that "listed companies should raise funds rationally and reasonably determine the scale of financing, and the funds raised this time will mainly be invested in the main business."

This issuance complies with the relevant provisions of Articles 61, 62 and 64 of the "Registration Management Measures"

(1) This issuance complies with the provisions of Article 61 of the "Registration Management Measures"

The issuance terms of this convertible bond include terms such as term, face value, interest rate, rating, bondholder rights, conversion price and adjustment principles, redemption and sell-back, downward revision of the conversion price, etc.; the interest rate of the convertible bond is determined by legal negotiation between the listed company and the sponsor (lead underwriter).

In summary, this issuance complies with the relevant provisions of Article 61 of the "Registration Management Measures".

(2) This issuance complies with the provisions of Article 62 of the "Registration Management Measures"

The conversion period of the convertible bonds issued this time starts from the first trading day six months after the completion of the issuance of the convertible bonds and ends on the maturity date of the convertible bonds. (If there is a legal holiday or rest day, it will be postponed to the first working day after that; no additional interest will be accrued on the interest payment during the postponement period). Holders of convertible bonds have the option to convert or not convert shares and become shareholders of the company on the next day of conversion.

In summary, this issuance complies with the relevant provisions of Article 62 of the "Registration Management Measures".

(3) This issuance complies with the provisions of Article 64 of the "Registration Management Measures"

The initial conversion price of the convertible corporate bonds issued this time shall not be lower than the average trading price of the company's stock on the twenty trading days before the announcement date of the prospectus (if there is a stock price adjustment due to ex-rights and ex-dividends within the twenty trading days, the average trading price on the trading day before the adjustment shall be calculated based on the price adjusted for the corresponding ex-rights and ex-dividends) and the average trading price of the company's stock on the previous trading day, and shall not be revised upward. The specific initial conversion price shall be determined by the board of directors (or person authorized by the board of directors) authorized by the company's shareholders' meeting and negotiated with the sponsor (lead underwriter) based on market conditions before the issuance. At the same time, the initial conversion price shall not be lower than the latest audited net assets per share and face value of the stock.

In summary, this issuance complies with the relevant provisions of Article 64 of the "Registration Management Measures".

(3) This issuance complies with the relevant provisions of the "Opinion No. 18 on the Application of Securities and Futures Laws"

The company did not have any large financial investments at the end of the latest period.

As of September 30, 2025, the company did not hold any large financial investments. The company complies with the provisions of "Opinion No. 18 on the Application of Securities and Futures Laws" "1. Regarding the understanding and application of Article 9, "There is no financial investment with a large amount at the end of the latest period".

After the issuance is completed, the company’s cumulative bond balance shall not exceed 50% of the net assets at the end of the latest period.

As of September 30, 2025, the company's net assets were 3.1826986 million yuan, and the cumulative bond balance was 0.00 million yuan. The planned issuance of convertible corporate bonds is RMB 1,556,120,300. Assuming that the face value of RMB 1,556,120,300 is fully included in the bonds payable account, after the issuance is completed, the company's cumulative bond balance will be RMB 1,556,120,300, which does not exceed 50% of the net assets at the end of the latest period; the company's issuance will further optimize the capital structure, and the company will have sufficient cash flow to pay the principal and interest of the corporate bonds.

The company complies with the provisions of "3. Understanding and Application of Article 13 of 'Reasonable Asset and Liability Structure and Normal Cash Flow'" in the "Opinion No. 18 on the Application of Securities and Futures Laws".

The funds raised from this issuance shall be used to supplement working capital, not exceeding 30% of the total funds raised.

The company intends to replenish working capital by raising funds of RMB 250 million. The funds raised this time (including the part deemed to be replenishment) do not exceed 30% of the total raised funds, which is in compliance with the provisions of "Opinion No. 18 on the Application of Securities and Futures Laws" "5. How to apply the understanding and application of Article 40 of Article 40 "Mainly invested in the main business" regarding the use of raised funds to replenish current and repay loans".

(4) This issuance complies with the provisions of the "Memorandum of Cooperation on the Implementation of Joint Punishments on Dishonest Persons Subject to Enforcement" and the "Memorandum of Cooperation on the Implementation of Joint Punishments on Untrustworthy Customs Enterprises"

After self-examination, the company does not fall within the scope of enterprises that need to be punished as stipulated in the "Memorandum of Cooperation on Joint Punishment of Persons Defaulted to Enforcement" and the "Memorandum of Cooperation on the Implementation of Joint Punishment of Untrustworthy Customs Enterprises", and does not belong to general untrustworthy enterprises and customs untrustworthy enterprises.

6. Fairness and rationality of this issuance plan

This issuance plan fully takes into account the company's current industry status, future development trends and the needs of the company's overall strategic layout. It was approved by the board of directors after careful study. The implementation of the issuance plan will help the company accelerate the realization of its development strategic goals, improve the company's sustainable profitability and comprehensive strength, and is conducive to increasing the rights and interests of all shareholders and in line with the interests of all shareholders.

This plan to issue convertible corporate bonds to unspecified objects and related documents will be disclosed on qualified information disclosure media, ensuring the right to know of all shareholders. The company will convene a shareholders' meeting to review the issuance plan. Shareholders will vote fairly on the company's issuance of convertible corporate bonds to unspecified objects on the basis of the same shares with the same rights. Resolutions made by the shareholders' meeting on matters related to the issuance of convertible corporate bonds to unspecified objects must be passed by more than two-thirds of the voting rights held by shareholders attending the meeting. The votes of small and medium investors must be counted separately. At the same time, the company's shareholders can exercise their shareholder rights through on-site or online voting.

To sum up, the plan to issue convertible corporate bonds to unspecified objects has been carefully studied by the board of directors and is believed to be in the interests of all shareholders. The issuance plan and related documents have fulfilled relevant disclosure procedures to protect shareholders’ right to know. Furthermore, the plan to issue convertible corporate bonds to unspecified objects will receive a fair vote from participating shareholders at the shareholders’ meeting, and is fair and reasonable.

The impact of this issuance on the dilution of original shareholders’ equity or current returns and the specific measures to compensate for it

After a company issues convertible corporate bonds to unspecified objects, there is a risk that the company's current returns will be diluted. The company plans to prevent the risk of immediate returns being diluted through a variety of measures to supplement shareholder returns, achieve the company's sustainable development, and enhance the company's ability to sustain returns. The company plans to take the following filling measures: strengthen the implementation of the company's development strategy and improve profitability; continue to improve the corporate governance structure to provide institutional guarantees for the company's development; actively promote the construction of fundraising projects and improve the efficiency of the use of raised funds; strengthen the management of raised funds to ensure the reasonable and standardized use of raised funds; improve the profit distribution system and strengthen the investor return mechanism.

The company's board of directors carefully analyzed and reviewed the impact of this issuance on the original shareholders' equity or dilution of immediate returns and the specific measures to make up for it. In order to ensure that the filling measures are effectively implemented, the company's controlling shareholders, directors and senior managers issued relevant commitments. For details, please refer to the "Announcement of Zhejiang Zuoli Pharmaceutical Co., Ltd. on the Dilution of Current Returns and Filling Measures for the Issuance of Convertible Corporate Bonds to Unspecified Objects and the Commitments of Relevant Entities".

8. Conclusion

To sum up, it is necessary and feasible for the company to issue convertible corporate bonds to unspecified objects. The issuance plan is fair and reasonable. The implementation of the issuance plan will be conducive to further enhancing the company's sustainable profitability and comprehensive strength. It is in line with the company's development strategy and in line with the interests of the company and all shareholders.

Board of Directors of Zhejiang Zuoli Pharmaceutical Co., Ltd.

December 2, 2025