Zhongnongfa Seed Industry Group updates on share issuance inquiry

Zhongnongfa Seed Industry Group Co. has issued a reply to the Shanghai Stock Exchange's audit inquiry letter regarding its application for a private placement of shares. The company received the inquiry on October 30, 2025, and, with its intermediaries, reviewed the questions. The company confirmed that funding for the issuance, from its actual controller China National Agricultural Development Group Co. and its wholly-owned subsidiary Huanong Asset Management Co., will come from proprietary or self-raised funds, ensuring compliance. The issuance has already secured approval from the company's board, independent directors, shareholders, and China National Agricultural Development Group Co.

The company’s board of directors, in its 50th meeting of the seventh session on August 15, 2025, approved the share issuance. This was followed by the second extraordinary general meeting of shareholders on September 29, 2025, which also passed the relevant resolutions. After the issuance, China National Agricultural Development Group Co., Huanong Asset Management Co., and Zhongken Company will collectively hold 43.89% of the company's total share capital. The lock-up period for these shares is set at 36 months, in line with regulatory requirements.

The company also clarified that there are no significant financial investments (including quasi-financial businesses) up to September 30, 2025, that would require a reduction in the capital raised. The issuance proceeds will primarily be used to repay special government appropriations and supplement working capital, without being allocated to financial investments.