2025 Internal Control Evaluation Report

Company code: 688765 Company abbreviation: Heyuan Biotechnology

Wuhan Heyuan Biotechnology Co., Ltd.

All shareholders of Wuhan Heyuan Biotechnology Co., Ltd.:

In accordance with the provisions of the "Basic Standards for Enterprise Internal Control" and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the Enterprise Internal Control Standard System), combined with the company's (hereinafter referred to as the company's) internal control system and evaluation methods, and on the basis of daily supervision and special supervision of internal control, we evaluated the effectiveness of the company's internal control on December 31, 2025 (the base date of the internal control evaluation report).

1. Important statement

In accordance with the provisions of the enterprise's internal control normative system, it is the responsibility of the company's board of directors to establish, improve and effectively implement internal control, evaluate its effectiveness, and truthfully disclose the internal control evaluation report. The Audit Committee oversees the company's establishment and implementation of internal controls. Managers are responsible for organizing and leading the daily operation of the enterprise's internal controls. The company's board of directors, directors and senior managers guarantee that there are no false records, misleading statements or major omissions in this report, and bear individual and joint legal liability for the authenticity, accuracy and completeness of the report content.

The goal of the company's internal control is to reasonably ensure legal compliance of operation and management, asset safety, authenticity and completeness of financial reports and related information, improve operating efficiency and effectiveness, and promote the realization of development strategies. Due to the inherent limitations of internal control, it can only provide reasonable assurance for achieving the above objectives. In addition, since changes in circumstances may cause internal controls to become inappropriate, or the degree of compliance with control policies and procedures to be reduced, there is a certain risk in inferring the effectiveness of future internal controls based on the results of internal control evaluations.

2. Conclusion of internal control evaluation

1. Whether the company has any major deficiencies in the internal control of financial reporting on the base date of the internal control evaluation report

□Yes √No

2. Conclusion of the evaluation of internal control over financial reporting

√Valid □Invalid

According to the identification of major deficiencies in the company's internal control over financial reporting, there were no major deficiencies in internal control over financial reporting on the base date of the internal control evaluation report. The board of directors believes that the company has maintained effective internal control over financial reporting in all major aspects in accordance with the requirements of the corporate internal control standard system and relevant regulations.

3. Whether significant deficiencies in internal control over non-financial reporting have been discovered

□Yes √No

According to the identification of major deficiencies in the company's internal control over non-financial reporting, the company found no major deficiencies in internal control over non-financial reporting on the base date of the internal control evaluation report.

4. Factors that affect the conclusion of the internal control effectiveness evaluation from the base date of the internal control evaluation report to the issuance date of the internal control evaluation report

□Applicable√Not applicable

There are no factors that affect the conclusion of the internal control effectiveness evaluation between the base date of the internal control evaluation report and the issuance date of the internal control evaluation report.

5. Whether the internal control audit opinion is consistent with the company’s evaluation conclusion on the effectiveness of internal control over financial reporting

√Yes □No

6. Whether the disclosure of major deficiencies in non-financial reporting internal control in the internal control audit report is consistent with the disclosure in the company’s internal control evaluation report

√Yes□No

3. Internal control evaluation work

(1). Scope of internal control evaluation

The company determines the main units, businesses and matters as well as high-risk areas included in the evaluation scope in accordance with the risk-oriented principle.

1. The main units included in the evaluation scope include: the company and all its holding subsidiaries

2. Proportion of units included in the evaluation scope:

Indicator Proportion (%) Ratio of the total assets of the units included in the evaluation scope to the total assets of the company's consolidated financial statements 100 Ratio of the total operating income of the units included in the evaluation scope to the total operating income of the company's consolidated financial statements 100

3. The main businesses and matters included in the evaluation scope include:

The matters included in the evaluation scope of the company include internal environment, risk assessment, control activities, information and communication, internal supervision, and internal control evaluation. The main businesses included in the evaluation scope include: sales and collection, procurement and payment, research and development activities, clinical research activities, fund management, asset management, financial reporting, information systems, related party transactions, etc.

4. High-risk areas of focus include:

R&D activities, clinical research activities, financial reporting, etc.

5. The above-mentioned units, businesses, matters and high-risk areas included in the evaluation scope cover the main aspects of the company’s operation and management. Are there any major omissions?

□Yes√No

6. Whether statutory exemptions exist

□Yes √No

7. Other instructions

None.

(2). Basis for internal control evaluation and identification standards for internal control deficiencies

The company organizes and carries out internal control evaluation work based on the corporate internal control normative system and the company's internal control system and evaluation methods.

1. Whether the specific identification standards for internal control deficiencies have been adjusted from previous years

□Yes√No

The company's board of directors determines major defects, important defects and general defects in accordance with the company's internal control standard system and in conjunction with the company's regulations.

Based on factors such as model, industry characteristics, risk preference and risk tolerance, we distinguish between financial reporting internal control and non-financial reporting internal control, and study and determine the specific identification standards for internal control deficiencies applicable to the company, which are consistent with previous years.

2. Standards for identifying deficiencies in internal control over financial reporting

The quantitative standards for the evaluation of internal control deficiencies over financial reporting determined by the company are as follows:

Indicator name Quantitative standard for major defects Quantitative standard for important defects Quantitative standard for general defects Operating income More than 5% of operating income More than 3% of operating income but less than less than 3% of operating income

5%

Total assets Exceed 1% of total assets Exceed 0.5% of total assets, less than 1% Less than 0.5% of total assets Explanation:

None.

The qualitative standards for the evaluation of internal control deficiencies over financial reporting determined by the company are as follows:

Nature of defects Qualitative standards

Major deficiencies (1) Fraudulent conduct by the company’s directors and senior managers;

(2) Material misstatements in the current financial report discovered by certified public accountants but not identified by the company’s internal controls;

(3) The audit committee and audit department are ineffective in supervising the company’s external financial reporting and internal control of financial reporting. Important defects (1) Failure to select and apply accounting policies in accordance with generally accepted accounting principles;

(2) Failure to establish anti-fraud procedures and control measures;

(3) No corresponding control mechanism has been established or implemented and there are no corresponding compensatory controls for the financial processing of irregular or special transactions;

(4) There are one or more deficiencies in the control of the period-end financial reporting process and the prepared financial reports cannot be reasonably guaranteed.

financial statements to achieve true and complete goals.

General defects include other control defects other than the above-mentioned major defects and important defects.

Description:

None.

3. Standards for identifying deficiencies in internal control over non-financial reporting

The quantitative standards for the evaluation of non-financial reporting internal control deficiencies determined by the company are as follows:

Indicator name Quantitative standard for major defects Quantitative standard for important defects Quantitative standard for general defects Operating income More than 5% of operating income More than 3% of operating income but less than less than 3% of operating income

5%

Total assets Exceed 1% of total assets Exceed 0.5% of total assets, less than 1% Less than 0.5% of total assets Note:

None.

The qualitative standards for the evaluation of non-financial reporting internal control deficiencies determined by the company are as follows:

Nature of defects Qualitative standards

Major defects: Defects have a high probability of occurrence and will seriously reduce work efficiency or effectiveness, or seriously increase the uncertainty of effectiveness.

or cause it to seriously deviate from the intended goal.

Important defects: Defects are more likely to occur and will significantly reduce work efficiency or effectiveness, or significantly increase the uncertainty of the effectiveness.

or cause it to deviate significantly from the intended goal. General defects: Defects are less likely to occur and will reduce work efficiency or effectiveness, or increase the uncertainty of the effectiveness, or make it

deviation from the expected goal.

Description:

None.

(3). Identification and rectification of internal control deficiencies

1. Identification and rectification of internal control deficiencies over financial reporting

1.1. Major defects

Did the company have any major deficiencies in internal control over financial reporting during the reporting period? Yes √ No

1.2. Important defects

Does the company have any important deficiencies in internal control over financial reporting during the reporting period? Yes √ No

1.3. General defects

None.

1.4. After the above rectifications, as of the base date of the internal control evaluation report, does the company have any significant internal control issues over financial reporting that have not been rectified?

Defects

□Yes√No

1.5. After the above rectifications, as of the base date of the internal control evaluation report, does the company have any important internal control issues over financial reporting that have not been rectified?

Defects

□Yes√No

2. Identification and rectification of internal control deficiencies over non-financial reporting 2.1. Major deficiencies

Did the company discover any major deficiencies in non-financial reporting internal control during the reporting period? Yes √ No

2.2. Important flaws

Did the company discover any important deficiencies in non-financial reporting internal control during the reporting period Yes √ No

2.3. General defects

During the reporting period, the Company identified general deficiencies in internal control over non-financial reporting. In response to the problems discovered, the company has promptly formulated detailed rectification plans and strictly implemented the rectifications.

2.4. After the above rectifications, on the base date of the internal control evaluation report, has the company discovered any major deficiencies in the internal control of non-financial reporting that have not yet been rectified?

□Yes√No

2.5. After the above rectifications, on the base date of the internal control evaluation report, has the company discovered any important deficiencies in the internal control of non-financial reporting that have not yet been rectified?

□Yes√No

4. Description of other major matters related to internal control

1. Rectification of internal control deficiencies in the previous year

□Applicable √Not applicable

2. Internal control operation status this year and improvement directions for the next year

√Applicable □Not applicable

In 2025, the company continued to promote the improvement and optimization of the internal control system. The relevant systems were operating effectively, and no major or important internal control deficiencies were found in the financial and non-financial reporting areas. Looking forward to 2026, the company will be based on the actual operation and management, further build up the internal control awareness of all employees, continue to carry out the evaluation, optimization and deepening of the internal control system, and strive to comprehensively improve the internal control efficiency to effectively protect the rights and interests of all shareholders and safeguard the long-term and stable development of the company.

3. Description of other significant matters

□Applicable √Not applicable

Chairman (authorized by the board of directors): Yang Daichang Wuhan Heyuan Biotechnology Co., Ltd.

April 28, 2026