Grand Pharmaceutical (China) Co., Ltd. entered into the Equity Transfer Agreement to acquire remaining 24.65% stake in Tianjin Tanabe Seiyaku Co, Ltd. from Tianjin Lisheng Pharmaceutical Co.,Ltd. for CNY 120 million on June 28, 2024. A cash consideration of CNY 120.29 million will be paid by Grand Pharmaceutical (China) Co., Ltd. As part of consideration, CNY 120.29 million is paid towards common equity of Tianjin Tanabe Seiyaku Co, Ltd. Under the terms of agreement, the total consideration for the Disposal is CNY 120,292,000 (equivalent to approximately HKD 130,610,206), being the final bidding price offered by Grand Pharma (China), which shall be paid in the following manners: (1) a deposit of CNY 36,000,000 (equivalent to approximately HKD 39,087,948) had been remitted by Grand Pharma (China) to the designated account of the Tianjin Property Rights Exchange Centre before the signing of the Equity Transfer Agreement and shall be credited as part of full consideration for the Disposal; (2) the balance of the consideration in the amount of CNY 84,292,000 (equivalent to approximately HKD 91,522,258) shall be remitted to the designated account of the Tianjin Property Rights Exchange Centre within 2 working days after the signing of the Equity Transfer Agreement; and (3) when the business registration of the ownership transfer of 24.65% equity interest in Tianjin Tanabe has been completed, Tianjin Property Rights Exchange Centre will transfer the entire amount of the consideration to Lisheng Pharmaceutical. Consideration being paid is subject to the terms and conditions of the Equity Transfer Agreement. The consideration of the Disposal was the final bidding price offered by the successful bidder in the public listing-for-sale process. The initial bidding price for the Disposal was determined with reference to the relevant requirements governing the transfer of state-owned assets of enterprise in the PRC and the appraised value of Tianjin Tanabe according to the Valuation Report. Upon completion of the Disposal, the Group will cease to have any interest in Tianjin Tanabe. The Directors consider that, although the Disposal is not in the ordinary and usual course of business of the Group, the terms of the Equity Transfer Agreement are fair and reasonable and the transactions contemplated under the Equity Transfer Agreement are on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

The Group intends to apply the proceeds from the Disposal as general working capital of the Group. The Board considers that the Disposal will enhance the operational efficiency of assets of the Group, optimize allocation of the Group?s resources and strengthen the cash flow of the Group. None of the Directors has a material interest in the Equity Transfer Agreement and the transactions contemplated thereunder.