Regulatory authorities launch a special action to govern the misappropriation of funds by New Third Board companies in the Shanghai area. Entities involved in fund misappropriation must rectify within a specified period.

In order to effectively enhance the public company awareness of controlling shareholders and actual controllers in Shanghai's jurisdiction, improve the standard operation level of listed companies, prevent major illegal and irregular behaviors such as fund occupation, and safeguard the legitimate rights and interests of investors, the regulatory authorities have initiated a special action to govern fund occupation in listed companies in Shanghai's jurisdiction: 1. We attach great importance to this and promote it solidly. Listed companies should have a profound understanding of the various risks hidden in fund occupation, standardize the review procedures for related party transactions, effectively fulfill the responsibility as the main entity of information disclosure, fully disclose the details of fund occupation, rectification, and repayment; 2. We should investigate the actual situation and clear up the existing problems. Based on the information disclosed in the 2025 annual reports of listed companies and the daily supervision, listed companies and sponsoring securities firms should conduct in-depth self-examination and verification, urge the subjects of fund occupation to rectify within the time limit, and promptly return the funds. Independent directors, supervisors, and audit committee should fully play their supervisory role and promote the timely discovery and reporting of fund occupation matters. Regulatory authorities will strictly crack down on cases with large amounts of occupation, severe negative impacts, and failure to rectify within the time limit; 3. Sponsoring securities firms should urge listed companies to improve their internal control mechanisms, strengthen training and education for "key minorities" such as controlling shareholders and actual controllers, and establish a compliance operating bottom line from the source.