Securities code: 688029 Securities abbreviation: Nanwei Medical Announcement No.: 2025-004

Nanwei Medical Technology Co., Ltd

Announcement on Capital Increase and Related Party Transaction to Holding Subsidiaries

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or material omissions in the content of this announcement, and assume legal responsibility for the authenticity, accuracy and completeness of its content in accordance with the law.

Important Content Notes:

On January 16, 2025, Nanwei Medical Technology Co., Ltd. (hereinafter referred to as the "Company" or "Nanwei Medicine") held the first meeting of the fourth session of independent directors of the board of directors, the seventh meeting of the fourth board of directors and the sixth meeting of the fourth board of supervisors, respectively, deliberated and passed the "Proposal on Capital Increase and Related Party Transactions to Holding Subsidiaries", and agreed that the company and Nanjing Kangyou Medical Technology Co., Ltd. (hereinafter referred to as "Kangyou Medical") Based on the value of all the equity of Kangyou Medical of 340 million yuan, the core management team jointly increased the capital of Kangyou Medical by 40 million yuan at a price of 15.30 yuan per registered capital, of which the company and the core management team of Kangyou Medical each increased their capital by 20 million yuan, and the new registered capital of this capital increase was 2,614,379.06 yuan, corresponding to 10.53% equity of Kangyou Medical after the completion of all the capital increases, and the difference was included in the capital reserve. After the completion of this transaction, the company's shareholding in Kangyou Medical will be reduced from 54.00% to 53.58%, and the company will still be the controlling shareholder of Kangyou Medical, and Kangyou Medical will still be a holding subsidiary within the scope of the company's consolidated statements.

Mr. Long Long, a member of the core management team of Kangyou Medical, is a close relative of Mr. Long Xiaohui, the chairman of the company, and Nanjing Ruide Medical Partnership (Limited Partnership) (hereinafter referred to as "Nanjing Ruide"), which intends to participate in the capital increase, is an employee stock ownership platform for which Mr. Long Long is the executive partner. The company's capital increase constitutes a joint investment with related parties, but does not constitute a major asset restructuring as stipulated in the "Measures for the Administration of Material Asset Restructuring of Listed Companies". There are no major legal obstacles to the implementation of this transaction.

The company will sign the capital increase agreement and memorandum of understanding with the core management team of Kangyou Medical and other parties on the capital increase and other relevant documents to promote the capital increase of Kangyou Medical.

Beijing Ruizhi Medical Equity Investment Partnership (hereinafter referred to as "Ruizhi Medical") and Nanjing Boles Medical Partnership (Limited Partnership) (hereinafter referred to as "Nanjing Boles") are minority shareholders of Kangyou Medical

1. Overview of related party transactions

(1) The basic situation of Kangyou Medical's previous equity incentive

On July 24, 2024, the 22nd meeting of the 3rd board of directors and the 15th meeting of the 3rd board of supervisors of the company deliberated and approved the "Proposal on the Implementation of Equity Incentives and Related Party Transactions by Holding Subsidiaries", and agreed that Kangyou Medical, a controlling subsidiary, will implement equity incentives at a price of 9.05 yuan per registered capital based on the audited net assets of 181 million yuan as of December 31, 2023, with an incentive amount of no more than 20,111,109 yuan and an additional registered capital 2,222,222 yuan (corresponding to 10% equity of Kangyou Medical after the completion of the equity incentive), and the difference is included in the capital reserve. Mr. Long Long, director and general manager of Kangyou Medical, directly participated in the equity incentive; Some senior executives, core technical personnel, and key employees of Kangyou Medical participated in the equity incentive through the employee shareholding platforms Nanjing Ruide and Nanjing Boles. The Company and Ruizhi Medical, a minority shareholder of Kangyou Medical, gave up the right to increase the priority of additional shares issued by Kangyou Medical.

The corresponding plan and incentive list of the equity incentive have been deliberated and approved by the shareholders' meeting and the board of directors of Kangyou Medical, and the grant of incentive shares to the incentive objects has been completed, and the new registered capital of Kangyou Medical due to the equity incentive has also been registered.

(2) The basic situation of the capital increase and related party transactions

In order to further support the long-term development of Kangyou Medical, after negotiation between the company and all relevant parties of Kangyou Medical, it is proposed that the company and the core management team of Kangyou Medical will jointly increase the capital of Kangyou Medical by 40 million yuan at a price of 15.30 yuan per registered capital based on the full equity value of Kangyou Medical of 340 million yuan, of which the company and the core management team of Kangyou Medical will each increase their capital by 20 million yuan. Nanjing Youyisaion Partnership (Limited Partnership) (not yet established, hereinafter referred to as "Nanjing Youyisaion") indirectly increased its capital, and the new registered capital of this capital increase was 2,614,379.06 yuan, corresponding to 10.53% of the equity of Kangyou Medical after the completion of the capital increase, and the difference was included in the capital reserve.

On January 16, 2025, the first meeting of the special meeting of independent directors of the fourth board of directors of the company, the seventh meeting of the fourth board of directors and the sixth meeting of the fourth board of supervisors respectively deliberated and approved the "Proposal on Capital Increase and Related Party Transaction to the Holding Subsidiary", and agreed that the company and the core management team of Kangyou Medical jointly increased the capital of 40 million yuan to Kangyou Medical, of which the company and the core management team of Kangyou Medical increased their capital by 20 million yuan each.

It also authorizes the company's management to specifically promote the implementation of the capital increase plan, including signing the "Memorandum" of capital increase with relevant parties of Kangyou Medical, relevant capital increase agreements, and payment of capital increase.

Mr. Longlong, the object of Kangyou Medical's previous equity incentive capital increase and the object of this joint capital increase, is an affiliated natural person of the company, and Nanjing Ruide, the company with this joint capital increase, is an employee shareholding platform for which Mr. Longlong is the executive partner, and this transaction constitutes a connected transaction in accordance with the provisions of the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange.

As of this related party transaction, the amount of related party transactions between the company and the same related person in the past 12 months (including this transaction) has not reached more than 1% of the company's latest audited total assets or market value. The company's capital increase does not need to be submitted to the company's general meeting of shareholders for deliberation.

2. Basic information of related persons

(1) Explanation of the affiliation

Mr. Longlong is a close relative of Mr. Long Xiaohui, the chairman of the Company, and Nanjing Ruide is the shareholding platform for Mr. Longlong as the executive partner, and the two are related persons of the Company. According to the relevant provisions of the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the company's capital increase constitutes a connected transaction.

(2) The basic information of the related persons

1. Long Long, male, Chinese nationality, has served as the director and general manager of Kangyou Medical in the past three years. In addition to the aforesaid related relationships, there are no other related relationships between Mr. Longlong and the Company in terms of property rights, business, assets, creditor's rights and debts.

2. Nanjing Ruide Medical Partnership (Limited Partnership)

Business Type: Limited Partnership

Managing Partner: Long Long

Capital contribution: 6,355,1091 yuan

Date of Establishment: December 10, 2024

Main business place: Room 401, Building 1, No. 11, Yaogu Avenue, Jiangbei New District, Nanjing City, Jiangsu Province

Business Scope: General Items: Sales of Class II Medical Devices; equity investment; Engage in investment activities with its own funds (except for projects subject to approval in accordance with the law, independently carry out business activities with a business license in accordance with the law)

Nanjing Ruide is the shareholding platform for Mr. Longlong as the executive partner. In addition to the foregoing affiliation,

There is no other relationship between Nanjing Ruide and the company in terms of property rights, business, assets, creditor's rights and debts.

3. Basic information on the subject matter of related party transactions

(1) The name and category of the subject of the transaction

The subject of this related party transaction is Kangyou Medical, a holding subsidiary of the company. The type of transaction is a joint investment with a related party and a partial waiver of the company's preferential capital increase right under the Rules Governing the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange.

(2) The basic information of the subject matter of the transaction

Name: Nanjing Kangyou Medical Technology Co., Ltd

Unified social credit code: 91320113134962555F

Legal representative: Long Long

Date of establishment: March 7, 1994

Registered capital: 22,222,222 RMB

Business type: Limited liability company (investment or holding by natural persons)

Period of operation: March 7, 1994 until indefinite

Registered address: Building 03, Accelerator Phase II, No. 11, Yaogu Avenue, Jiangbei New District, Nanjing

Business Scope: Licensed Items: Class II Medical Device Production; Class III medical device production; Class III medical device operation; production of medical masks; import and export agency; import and export of goods; Technology import and export (projects subject to approval in accordance with the law, business activities can only be carried out after approval by relevant departments, and specific business projects are subject to the approval results) General projects: Class I medical device production; Class I medical device sales; Class II medical device sales; wholesale of medical masks; sales of daily masks (non-medical); production of daily masks (non-medical); domestic trade agency; technical services, technology development, technical consultation, technology exchange, technology transfer, technology promotion; leasing of medical equipment; Repair of special equipment (except for projects subject to approval in accordance with the law, independently carry out business activities with a business license in accordance with the law)

Kangyou Medical's property rights are clear, there is no mortgage, pledge and any other restrictions on transfer, no litigation, arbitration matters or judicial measures such as seizure and freezing, and there are no other circumstances that hinder the transfer of ownership. Other shareholders who have the right of priority to increase capital in this capital increase will waive their right of priority to increase capital.

Before and after the completion of this capital increase, the shareholding of Kangyou Medical shareholders is as follows:

Unit: Yuan

Name of shareholder Before this capital increase After this capital increase

Registered Capital Shareholding Ratio Registered Capital Shareholding Ratio

Nanwei Medical 12,000,000.00 54.00% 13,307,189.53 53.58%

Ruizhi Medical 8,000,000.00 36.00% 8,000,000.00 32.21%

Longlong 566,000.00 2.55% 566,000.00 2.28%

Nanjing Ruide 702,222.00 3.16% 702,222.00 2.83%

Nanjing Boles 954,000.00 4.29% 954,000.00 3.84%

Longlong, Nanjing Ruide,

Nanjing Youyisaion 0 0 1,307,189.53 5.26%

The joint capital increased by 20 million

Yuan

Total 22,222,222.00 100.00% 24,836,601.06 100.00%

Note: The respective capital increase amounts of Longlong, Nanjing Ruide and Nanjing Youyi Saion have not yet been finalized, and the final results of industrial and commercial registration shall prevail.

(3) The main financial data of the subject of the transaction

Project December 31, 2023 September 30, 2024

(January-December 2023) (January-September 2024)

Total assets (10,000 yuan) 23,946.05 30,710.64

Total liabilities (10,000 yuan) 5,853.71 8,445.54

Net assets (10,000 yuan) 18,092.33 22,265.10

Operating income (10,000 yuan) 21,289.35 20,351.54

Net profit (10,000 yuan) 3,600.05 4,172.77

Net 3,052.95 4,168.84 net after non-recurring gains and losses

Profit (10,000 yuan)

Note: The above data as of December 31, 2023 (January-December 2023) and September 30, 2024 (January-September 2024) have been audited by Notarization Tianye Certified Public Accountants (Special General Partnership).

4. Pricing of related party transactions

According to the Asset Appraisal Report of Kangyou Medical issued by Jiangsu Fuhua Asset Appraisal Co., Ltd., as of December 31, 2023, the book value of Kangyou Medical's total assets was 239.4605 million yuan, the book value of total liabilities was 58.5371 million yuan, and the book value of all shareholders' equity was 180.9233 million yuan. After the appraisal, the value of all shareholders' equity of the enterprise is 38,003.00 million yuan. According to the appraisal value, after friendly negotiation among the shareholders of Kangyou Medical, it was determined that the transaction price of the capital increase was RMB 340 million before investment, and the pricing basis was fair, and there was no damage to the interests of the company and the company's shareholders.

5. The main content of the documents related to the capital increase

(1) Signatories:

Nanwei Medicine; Ruizhi Medical; Longlong; Nanjing Ruide; Nanjing Youyisaion; Nanjing Boles; Kangyou Medical (the "Target Company")

(2) Main Provisions:

1. Transaction consideration: Nanwei Medical increased its capital by 20 million yuan to Kangyou Medical, with an additional registered capital of 1,307,189.53 million yuan, and the difference was included in the capital reserve, while Longlong, Nanjing Ruide and Nanjing Youyisaion increased their capital by a total of 20 million yuan, with an additional registered capital of 1,307,189.53 million yuan, and the difference was included in the capital reserve.

2. Ruizhi Medical and Nanjing Boles waived their right of first refusal to increase capital in this capital increase.

3. Payment of capital increase: Each party shall remit the capital increase to the target company's collection account in accordance with the notice of the target company.

4. Delivery date: Within 15 working days after the signing of the agreement, all parties will cooperate to complete the industrial and commercial change registration procedures related to this transaction.

5. Corporate governance arrangement: After the completion of the transaction, the existing articles of association of the target company will continue to be used.

6. The impact of this capital increase on the company

1. This capital increase is conducive to Kangyou Medical to increase its capital scale, optimize its capital structure, replenish working capital, fully mobilize the enthusiasm of core personnel, effectively promote the formation of a closer combination of interests between Kangyou Medical and core personnel, and improve the comprehensive competitiveness of Kangyou Medical.

2. The source of funds for the company's participation in the capital increase is its own funds, which account for a low proportion of the company's financial indicators in the same period, and will not adversely affect the company's financial and operating conditions.

3. After the completion of this capital increase, Kangyou Medical is still a holding subsidiary of the company, which will not affect the scope of the company's consolidated statements, nor will it have a significant impact on the company's financial and operating results, and there is no damage to the interests of the company and shareholders.

VII. Procedures for Deliberation of Related Party Transactions

(1) Deliberations at the special meeting of independent directors

At the first meeting of the fourth special meeting of independent directors of the board of directors held on January 16, 2025, the company deliberated and passed the "Proposal on Capital Increase to Holding Subsidiaries and Related Party Transactions" with 3 votes in favor, 0 votes against and 0 abstentions

Competitiveness. There is no harm to the interests of the company and its shareholders, especially small and medium-sized shareholders, in this capital increase. The independent directors agreed to submit the above proposal to the board of directors of the company for deliberation.

(2) Deliberations of the board of directors and the board of supervisors

On January 16, 2025, the company held the seventh meeting of the fourth board of directors and the sixth meeting of the fourth board of supervisors, and deliberated and passed the "Proposal on Capital Increase to Holding Subsidiaries and Related Party Transactions" respectively.

(3) Opinions of the Board of Supervisors

The Board of Supervisors believes that the company's capital increase and related party transactions to Kangyou Medical, a holding subsidiary, are in line with the actual business and development needs of Kangyou Medical, and meet the requirements of laws, regulations and normative documents, which is conducive to Kangyou Medical's increase of capital scale, optimization of capital structure, replenishment of working capital, and conducive to promoting the sustainable development of Kangyou Medical and improving its long-term competitiveness. Agreed to the capital increase and related party transaction to Kangyou Medical.

The announcement is hereby made.

Board of Directors of Nanwei Medical Technology Co., Ltd

January 17, 2025