Article 1  To prevent corruption in the process of production and operation management, effectively combat commercial bribery and corruption, strengthen internal control mechanisms, enhance institutional supervision and institutional anti-corruption, and strengthen the supervision and management of people in key positions, these regulations (the "Regulations") are formulated to ensure the establishment of a long-term mechanism to manage commercial bribery and prevent various misconduct.

Article 2  The Regulations applies to Livzon Pharmaceutical Group Inc. (the “Company”), all its subsidiaries (collectively referred to as the “Group”), and all employees. All activities related to the production and operation management, or external contact of the Group shall strictly comply with the Regulations. These activities include but are not limited to interactions with government departments, negotiations with customer representatives for orders, procurement of raw materials, project construction, product sales, equipment procurement and maintenance, and other economic activities.

All clients, suppliers, service providers, contractors, and other partners (hereinafter collectively referred to as “interested parties”) who have business relationship with the Group are subject to the Regulations.

Article 3  The audit and integrity department of the Company (the “audit and integrity department”) is the supervisory and management department responsible for anti-corruption, anti-commercial bribery, and other matters related to business ethics within the Group. It reports to the Audit Committee under the Company’s Board of Directors (hereinafter referred to as the “Audit Committee”). Its main responsibilities include:

(I) Manage, supervise, and audit anti-commercial bribery, anti-corruption, and other business ethics related work within the Group in accordance with relevant national policies, laws, regulations, and the Group’s rules and regulations;

(II) Strengthen the supervision and management of the integrity of staff who are in important positions and important links. Prevent and manage at the source, treat both the root causes and the symptoms, improve institutional development, and keep true records of the integrity of staff in important positions and important links;

(III) For staff in important positions and important links, ensure the signing of the Staff Commitment for Anti-Corruption and Anti-Commercial Bribery (see Appendix 1), and follow up and inspect its implementation.

Article 4  The corruption and commercial bribery specified in the Regulations refer to:

(I) Any act of unfair competition in violation of laws and regulations, by giving or receiving cash, in-kind and other benefits directly or indirectly in the name of kickbacks, promotion fees, publicity fees, labor fees, or reimbursement of expenses, or offering of domestic and overseas travel, beyond normal transactions for the purpose of obtaining business opportunities or improper benefits;

(II) Embezzlement of the Group’s property for personal use or misappropriation of the Group’s assets for personal or other individual’s use by taking advantage of one’s position.

Article 5  In all activities related to the production and operation management of the Group, it is prohibited to:

(I) give or receive anything in cash or in kind to/from any counterparty and its personnel in violation of regulations;

(II) give money or property to obtain transaction, service opportunities, preferential conditions, or other economic benefits under the pretext of charitable contribution and sponsorship;

(III) for any unit or individual of the Group, use any funds or assets of the Group or use personal funds or assets in the name of the Group to directly or indirectly make political contributions, whether in cash or in kind, and whether to a political organization, a political party, or an individual politician. Any requirement for political donations from any internal unit or individual of the Group should be reported to the audit and integrity department for approval;

(IV) give or receive commercial sponsorships, travel, and other activities that violate the principle of fair competition;

(V) give or receive various membership cards, consumption cards (coupons), shopping cards (coupons), and other negotiable securities;

(VI) provide valuable items, such as houses or cars, for the other party to use, or accept the use of valuable items, such as houses or cars, provided by the other party;

(VII) give or receive gratuitously transferred shares or dividends;

(VIII) give or receive money or property or other benefits under the pretext of gambling or promotion fees, publicity fees, advertising fees, training fees, consultant fees, consultation fees, technical service fees, scientific research fees, clinical fees, etc.;

(IX) engage in sales and marketing activities through commercial bribery or other illegal means;

(X) embezzle the Group’s property for personal use by taking advantage of one’s position;

(XI) misappropriate the Group’s funds for personal or other individual’s use by taking advantage of one’s position;

(XII) other behaviors that violate laws, regulations, and the Group’s rules and regulations.

Article 6  Specific measures for anti-corruption and anti-commercial bribery:

(I) A system of commitment to preventing commercial bribery shall be implemented among staff in key positions and key links. Management personnel and staff in important positions shall sign the Staff Commitment for Anti-Corruption and Anti-Commercial Bribery with the Group;

(II) Interested parties (including suppliers, service providers, contractors, and clients) that have business relationship with the Group shall be required to comply with the Regulations and sign the Supplier Commitment for Operating with Integrity (see Appendix 2) in the contracts signed with or tenders submitted to the Group;

(III) A leadership organization shall be created to govern commercial bribery and engage in long-term anti-commercial bribery efforts;

(IV) The audit and integrity department shall often conduct investigations and research to understand the characteristics and patterns of corrupt practices and commercial bribery, study and propose specific solutions and measures for effective prevention in education, systems, supervision, etc., to promptly address incipient and emerging issues;

(V) Any violations of discipline and regulations discovered by departments in the course of preventing corruption and commercial bribery shall be promptly stopped or addressed, and reported to the audit and integrity department. Those whose actions are suspected of constituting a crime shall be transferred to judicial organs for handling;

(VI) All departments and enterprises of the Group shall strengthen the management of staff in important positions and consider their performance of the Staff Commitment for Anti-Corruption and Anti-Commercial Bribery as a key indicator of examination and appraisal and an important basis for appointment and dismissal.

Article 7  Whistleblowing and Acceptance

The Company encourages employees and interested parties to report various corrupt practices. At different stages of accepting and investigating whistleblowing cases, the Group shall keep the information of whistleblowers, including their name, department, company name, etc., strictly confidential without disclosure of their personal information and the handling of whistleblowing to the person or department being reported.

Upon receiving whistleblowing and complaints, the audit and integrity department shall register the cases immediately and investigate within the jurisdiction defined by the Regulations.

Whistleblowing and complaint hotline: the audit and integrity department 0756—8135383, 0756—8135948.

Article 8  For verified cases of corruption and commercial bribery, penalties shall be imposed depending on the seriousness of the circumstances in accordance with the Group’s Labor Employment Management System. If the circumstances are serious, the labor relationship shall be terminated, and the loss caused to the Group shall be recovered in accordance with the law. Those whose actions are suspected of constituting a crime shall be transferred to judicial organs for handling.

If interested parties that have business relationship with the Group and their employees fail to comply with the commitments in the Regulations, those suppliers, service providers, agents and distributors shall be disqualified, and their bidding qualification shall be canceled. Any suspected criminal offense shall be transferred to judicial authorities.

For whistleblowing and complaints proved to be true, the whistleblower shall be given certain material reward in accordance with regulations of Labor Employment Management System of the Group, and such whistleblowing and complaints will be regarded as a basis for promotion and salary raise.

Article 9  For matters not covered in the Regulations, relevant laws, administrative regulations, normative documents, and the Company’s articles of association shall apply.

Article 10  The Audit Committee is fully responsible for the implementation, oversight, and periodic review of the Regulations. The Audit Committee is responsible for the interpretation and revision of the Regulations. Appointed by the Audit Committee as its executive body, the audit and integrity department is responsible for the day-to-day implementation and execution of the Regulations and for reporting to the Audit Committee.

Article 11  The Regulations shall take effect from the date of issuance.

Livzon Pharmaceutical Group Inc.