The China Securities Regulatory Commission began in April last year and lasted 9 months of investigation. On January 29, 2021, it made preliminary investigation conclusions on Yihua Life' s suspected violation of information disclosure:

There are serious false records in Yihua Life' s regular reports from 2016 to 2019.

The first is to inflated profits by more than 2 billion yuan through fictitious sales operations and inflated sales;

The second is to inflate bank deposits by more than 8 billion yuan through forged bank documents;

Thirdly, it failed to disclose more than 30 billion yuan of capital transactions with related parties as required.

At present, the case has entered into the administrative penalty trial procedure, and the China Securities Regulatory Commission will strictly investigate the relevant entities for violations of the law.

On January 29, Yihua Life responded to the investigation conclusion of the China Securities Regulatory Commission as follows:

Yihua Life Technology Co., Ltd. is concerned that the China Securities Regulatory Commission notified the investigation of the company's illegal information disclosure case on January 29, 2021. These include inflated profits, inflated bank deposits, and failure to disclose large amounts of funds with related parties as required.

As of January 29, the company has not received the relevant written documents from the China Securities Regulatory Commission on the above-mentioned investigation matters, and the relevant matters are subject to the conclusive investigation opinions or decisions of the China Securities Regulatory Commission.

If the company is subject to administrative penalties by the China Securities Regulatory Commission for the above-mentioned investigation matters, and the facts determined in accordance with the administrative penalty decision touch upon the major violations of mandatory delisting under the Shanghai Stock Exchange' s Stock Listing Rules, the company' s stocks will face major violations of the law risk of forced delisting.