Teyi Pharmaceutical Group Co.Ltd(002728) : verification opinions of Dongguan securities on Teyi Pharmaceutical Group Co.Ltd(002728) using idle raised funds of convertible bonds to temporarily supplement working capital

Dongguan Securities Co., Ltd

About Teyi Pharmaceutical Group Co.Ltd(002728)

Verification opinions on temporarily replenishing working capital with idle raised funds of convertible bonds

Dongguan Securities Co., Ltd. (hereinafter referred to as “Dongguan securities” and “sponsor”) as the sponsor of Teyi Pharmaceutical Group Co.Ltd(002728) (hereinafter referred to as ” Teyi Pharmaceutical Group Co.Ltd(002728) ” or “the company”) non-public offering of shares, undertook the continuous supervision responsibilities Guosen Securities Co.Ltd(002736) not completed by the sponsor of Teyi Pharmaceutical Group Co.Ltd(002728) public offering of convertible corporate bonds. In accordance with the measures for the administration of securities issuance and listing recommendation business, the stock listing rules of Shenzhen Stock Exchange (revised in 2022), the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, and the regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies, and other relevant provisions, Dongguan securities conducted a serious and prudent investigation on the company’s use of some idle raised funds of convertible bonds to temporarily supplement working capital. The details of verification are as follows:

1、 Verification work carried out by the recommendation institution

By talking with directors, supervisors, senior managers and other personnel of the company, the sponsor representative of Dongguan securities reviewed the information disclosure documents of the company on the temporary replenishment of working capital with part of the idle raised funds of convertible bonds, the proposals and opinions of the board of directors, the board of supervisors and independent directors on the temporary replenishment of working capital with part of the idle raised funds, and made comments on the rationality and necessity of the use of the raised funds The effectiveness was verified. 2、 Basic information of raised funds

Approved by the reply on approving Teyi Pharmaceutical Group Co.Ltd(002728) public issuance of convertible corporate bonds (zjxk [2017] No. 2004) of China Securities Regulatory Commission, the company publicly issued 3.54 million convertible bonds on December 6, 2017, with a face value of 100 yuan each and a total raised capital of 35400000000 yuan. After deducting Shanghai Pudong Development Bank Co.Ltd(600000) 000 yuan of underwriting recommendation fee and 1277667 yuan of interest income, the amount was 34801277667 yuan. The availability of the above raised funds has been verified and confirmed by Ruihua Certified Public Accountants (special general partnership), who has issued the verification report (Ruihua Yan Zi [2017] No. 48470002). After deducting 165540000 yuan of other issuance expenses directly related to the issuance of equity securities, such as reporting accountant fees, lawyer fees, credit rating fees, information disclosure and roadshow promotion fees, the net amount of funds actually raised by the company this time is 34635737667 yuan.

3、 Use of funds raised by the company

The company’s convertible bond investment project is under construction. According to the schedule of the company’s convertible bond investment project, it is expected that part of the company’s convertible bond will be temporarily idle.

4、 Temporary replenishment of working capital with some idle raised funds of convertible bonds this time

In order to improve the use efficiency of the raised funds, reduce the company’s financial expenses, reduce the company’s operating costs, and safeguard the interests of the company and shareholders, on the premise of ensuring the implementation of the investment project of the funds raised by the company’s public offering of convertible bonds on schedule, the proposal on using some idle raised funds of convertible bonds to temporarily supplement working capital was deliberated and adopted at the 27th meeting of the Fourth Board of directors held on May 4, 2022, It is decided to temporarily use the idle raised funds of convertible bonds to supplement working capital, with a total amount of no more than RMB 100 million (accounting for 28.87% of the actual net raised funds), which shall be withdrawn from the special account for raised funds of the company.

The time limit for the company to temporarily use the idle raised funds of convertible bonds for replenishing working capital is no more than 12 months from the date of handling the temporary replenishment of working capital after the deliberation and approval of the board of directors, and it will be returned to the special account for raised capital after expiration. During this period, if the balance of the special account for raised funds cannot meet the normal payment of the funds required for the raised investment project, the company will return the raised funds that have been supplemented with working capital to the special account for raised funds according to the actual needs.

In order to ensure the timely return of the above-mentioned raised funds and the normal implementation of the raised investment projects, the company promises: (1) the company uses some idle raised funds of convertible bonds to supplement the working capital temporarily, and will not change the purpose of the raised funds in a disguised form, nor will it affect the normal progress of the investment plan of the raised funds; (2) It will be limited to the production and operation related to the main business, and will not be used for the placement and purchase of new shares, or for the trading of stocks and their derivatives, convertible corporate bonds, etc. through direct or indirect arrangements.

The independent directors and the board of supervisors of the company expressed their consent.

5、 Verification opinions of the recommendation institution

After verification, the recommendation institution believes that:

1. The company’s plan to temporarily replenish working capital by using some idle raised funds of convertible bonds has been reviewed and approved by the board of directors of the company, and the independent directors and the board of supervisors have expressed their explicit consent and fulfilled the necessary approval procedures, Comply with the requirements of relevant provisions such as the stock listing rules of Shenzhen Stock Exchange (revised in 2022), the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, and the regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies;

2. The plan of temporarily replenishing working capital by using some idle raised funds of convertible bonds does not conflict with the implementation plan of the original investment project of raised funds, will not affect the normal implementation of the original investment project of raised funds, nor does it change the investment direction of raised funds in a disguised manner and damage the interests of shareholders, Comply with the relevant provisions of the stock listing rules of Shenzhen Stock Exchange (revised in 2022), the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, and the regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies;

3. The temporary replenishment of working capital by using some idle raised funds of convertible bonds this time will help to improve the use efficiency of raised funds, reduce the company’s financial expenses, reduce the company’s operating costs, and safeguard the interests of the company and shareholders. Its use is reasonable and necessary.

The recommendation institution has no objection to the company’s plan to temporarily supplement working capital with some idle raised funds of convertible bonds.

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(there is no text on this page, which is the signature page of the verification opinions of Dongguan Securities Co., Ltd. on Teyi Pharmaceutical Group Co.Ltd(002728) using some idle raised funds of convertible bonds to temporarily supplement working capital)

Sponsor representative:

Guo Wenjun, Zheng Kun

Dongguan Securities Co., Ltd

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