China CBM Group Company Limited (China CBM) issued a supplemental announcement detailing the latest developments in the longstanding litigation involving its wholly owned subsidiary, Nuoxin (Xian County) Engineering Materials Company Limited (the Defendant).

Incident Overview • In April 2015, an individual lender alleged that the Defendant had guaranteed a loan contract without board authorisation. The contract was concealed during the 2015 acquisition of the Defendant. • Legal proceedings were initiated in 2016 at the Cangzhou Intermediate People’s Court. The Supreme People’s Procuratorate is currently reviewing the civil judgment; the case remains unresolved.

Financial Impact • A provision of RMB18.80 million has been recognised in the Group’s profit or loss for the year ended 31 December 2025. • On 15 April 2026, the court enforced transfer of an industrial land parcel and buildings in Xian County valued at RMB25.00 million to offset the debt. The applicant remitted the RMB6.20 million difference to the court-designated account.

Chairman’s Undertaking • Chairman and controlling shareholder Mr. Wang Zhong Sheng has undertaken to reimburse any losses suffered by the Group on a dollar-for-dollar basis, subject to the final outcome of the Supreme People’s Procuratorate review.

Internal Control & Remedial Actions • The unauthorised guarantee was executed by a former supervisor acting without authority; the individual is independent of Mr. Wang and other connected persons. • Upon discovery in 2016, the Group suspended the wrongdoer, engaged external legal counsel, and has continued to seek professional advice while updating relevant authorities. • The Board stated that due diligence conducted during the 2015 acquisition complied with GEM Listing Rules and that no internal control deficiencies within the Group have been identified.

Operational Outlook • The Defendant has not generated revenue in recent years due to strategy shifts and reduced market demand. • The Board believes the litigation will not have a material impact on the Group’s financial position or daily operations, citing Mr. Wang’s reimbursement commitment and his assessed asset sufficiency.

China CBM will issue further announcements under GEM Listing Rules upon any material developments in the case.