Reference is made to the announcement of Hyfusin Group Holdings Limited dated 18 December 2023 (the "Claim Announcement") regarding a claim (the "Claim") of about USD 6.8 million (equivalent to approximately HKD 53.0 million) from the Customer to compensate for its commercial losses due to the recall of the Affected Products. Unless otherwise specified, capitalised terms used in this announcement shall have the same meanings as defined in the Claim Announcement. On 28 March 2024, the Company has finalised an agreement with the Customer for a settlement with a compensation amount of USD 3.0 million (equivalent to approximately HKD 23.3 million), payable by the Group to the Customer in four instalments, and that the Company shall be discharged from any further liability to the Customer in respect of the Claim (the "Settlement").

Due to the uncertainty of the timing and amount of the final settlement for the Claim at the time the audited consolidated financial statements of the Company for the year ended 31 December 2023 (the "FY2023 Financial Results") were prepared, full amount of the Claim of USD 6.8 million (equivalent to approximately HKD 53.0 million) was provided for in the FY2023 Financial Results. Following the agreement for the Settlement, it is expected that the Group will record a gain on reversal of provision for the Claim of USD 3.8 million (equivalent to approximately HKD 29.7 million) for the year ending 31 December 2024. Shareholders and potential investors of the Company should note that the aforesaid financial impact of the Settlement is for illustrative purpose only and prepared based on the information currently available only, which will have to be ascertained at the time of preparation of the Company's consolidated financial statements, and is subject to audit.