China International Capital Corporation Limited

About Hillstone Network Technology Co., Ltd

Issuance of convertible corporate bonds to unspecified targets and listing on the STAR Market

Ongoing supervision of the sponsorship summary report

Approved by the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission") on the approval of the registration of the initial public offering of shares of Hillstone Network Technology Co., Ltd. (Zheng Jian Xu Xu [2019] No. 1614) and approved by the Shanghai Stock Exchange, Hillstone Network Communication Technology Co., Ltd. (hereinafter referred to as "Hillstone Network Technology" and "the Company")

45,056,000 RMB ordinary shares were issued, raising a total of RMB 948,879,400, deducting issuance expenses of 8,940.77

After 10,000 yuan, the net amount of funds raised was 859.4717 million yuan. The Company's initial public offering was commenced on September 30, 2019

Listed on the Shanghai Stock Exchange. China International Capital Corporation Limited (hereinafter referred to as "CICC" or the "Sponsor") assumes the responsibility of continuous supervision of the Company's initial public offering as the sponsor.

Approved by the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission") on the approval of the registration of Shanshi Network Technology Co., Ltd. to issue convertible company bonds to unspecified objects (Zheng Jian Xu Xu [2021] No. 4025) and approved by the Shanghai Stock Exchange, the company was approved to issue a total of 2,674,300 convertible corporate bonds to unspecified objects, raising a total of 267.43 million yuan, deducting the issuance expenses (excluding VAT) of 817.28 After 10,000 yuan, the net amount of funds raised was 259.2572 million yuan. The Company's issuance of convertible corporate bonds to unspecified targets was listed on the Shanghai Stock Exchange on April 21, 2022. As the sponsor of the Company's issuance, CICC continues to assume the responsibility of continuous supervision.

CICC's continuous supervision of Hillstone Network Technology is from September 30, 2019 to December 31, 2024. cut

As of March 31, 2023, the funds raised by the company's initial public offering of shares have been used up, and the special accounts for the raised funds have been cancelled. As of December 31, 2024, the proceeds from the issuance of convertible corporate bonds to unspecified targets in 2022 have not been fully utilized, and CICC will continue to fulfill its responsibility for the management and use of the remaining raised funds. CICC hereby issues this summary report on continuous supervision and sponsorship in accordance with the requirements of relevant laws, regulations and normative documents such as the Administrative Measures for the Sponsorship Business of Securities Issuance and Listing, the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, and the Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation.

1. Commitment of the sponsor institution and the sponsor representative

1. There are no false records, misleading statements or major omissions in the contents of the sponsor summary report, supporting documents and related materials, and the sponsor institution and the sponsor representative shall bear legal responsibility for their authenticity, accuracy and completeness.

2. The institution and I voluntarily accept any inquiries and investigations conducted by the China Securities Regulatory Commission on matters related to the sponsorship summary report.

3. The institution and I voluntarily accept the regulatory measures taken by the China Securities Regulatory Commission in accordance with the relevant provisions of the Administrative Measures for the Sponsorship Business of Securities Issuance and Listing.

2. Basic information of the sponsor institution

Name of Sponsor China International Capital Corporation Limited

Registered address: 27th and 28th floors, Tower 2, International Trade Building, No. 1 Jianguomenwai Street, Chaoyang District, Beijing

Office Address: 27th and 28th Floors, Tower 2, International Trade Building, No. 1 Jianguomenwai Street, Chaoyang District, Beijing

Legal representative: Chen Liang

Sponsor representatives: Jiang Tao and Li Yunfei

Third, the basic situation of listed companies

Stock abbreviation: Shanshi Network Branch

Stock symbol: 688030.SH

Stock listed stock exchange: Shanghai Stock Exchange

The Chinese name of the company is Shanshi Nettech Communication Technology Co., Ltd

Company name in foreign languages: Hillstone Networks Co.,Ltd.

Registered address: No. 181, Jingrun Road, Suzhou High-tech Zone

Office address: No. 181, Jingrun Road, Suzhou High-tech Zone

Company website https://www.hillstonenet.com.cn

E-mail ir@hillstonenet.com

Unified Social Credit Code 91320505578177101Y

R&D, production, sales and after-sales service of information network communication software and hardware products, as well as communications

Business Scope Technology-related program design, technical consulting, self-owned technology transfer and system integration services. (Required by law.)

For approved projects, business activities can only be carried out after approval by relevant departments)

4. Overview of sponsorship work

During the period of continuous supervision, the sponsor institution and the sponsor representative will continue to supervise the company to fulfill its obligations such as standardized operation, keeping commitments and information disclosure in strict accordance with the Administrative Measures for the Sponsorship Business of Securities Issuance and Listing, the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, and the Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation, including but not limited to:

1. Supervise the company and its directors, supervisors and senior managers to comply with laws, regulations, departmental rules, business rules and other normative documents issued by the Shanghai Stock Exchange, and earnestly fulfill the commitments they have made;

2. Supervise the convening procedures of the company's general meeting of shareholders, board of directors and board of supervisors and related information disclosure;

3. Supervise the company's standardized operation, pay attention to the construction of the company's internal control system and the operation of internal control;

4. Supervise the company to fulfill its information disclosure obligations, review the information disclosure documents and other documents submitted to the China Securities Regulatory Commission and the Shanghai Stock Exchange, and have sufficient reasons to believe that the documents submitted by the company do not contain false records, misleading statements or major omissions;

5. Supervise the use of the company's raised funds;

6. Supervise the company to effectively implement and improve the system to ensure the fairness and compliance of related party transactions; Continue to pay attention to matters such as the provision of guarantees by listed companies to others;

7. Conduct on-site inspections of the company on a regular or irregular basis, and submit relevant documents such as continuous supervision on-site inspection reports and continuous supervision and tracking reports to the Shanghai Stock Exchange in a timely manner.

5. Major matters that occur during the performance of sponsorship duties and their handling

(1) During the period of continuous supervision, the Shanghai Stock Exchange and the Jiangsu Securities Regulatory Bureau have taken regulatory measures against the company and their rectification

On December 13, 2019, the company disclosed an announcement on the receipt of government subsidies

The cumulative revenue-related government subsidies received by the company have met the disclosure standards, but the company has not fulfilled its information disclosure obligations in a timely manner. In accordance with the relevant provisions of Article 5.1.2, Article 9.3.4, Item 8 and Article 4.2.8 of the Rules Governing the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the Shanghai Stock Exchange gave a verbal warning to Shang Xihe, the then secretary of the board of directors of the company.

After receiving the verbal warning, the company attaches great importance to it, and organizes relevant departments and personnel to carefully study and continue to pay attention to the relevant regulations on information disclosure of listed companies; Strengthened internal information management and further implemented the company's "Information Disclosure Management System".

Ensure timely feedback of material information. In the future, the company will continue to strengthen the study of securities laws and regulations of relevant personnel, continuously improve compliance awareness, conscientiously fulfill information disclosure obligations, ensure the timeliness of information disclosure, and prevent the occurrence of similar situations

According to Article 6.2.1 of the Rules Governing the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange (SSE Fa [2020] No. 101), the company shall make a performance forecast within one month from the date of the end of the accounting year. The company disclosed the "2022 Annual Results Forecast" as late as February 10, 2023, and the information disclosure was not timely, which violated the "Administrative Measures for Information Disclosure of Listed Companies"

(Decree No. 182 of the CSRC) stipulates in Article 3, Paragraph 1 and Article 17. In May 2023, Hillstone Network Technology and the company high

Shang Xihe, a senior manager, received the "Decision of Jiangsu Securities Regulatory Bureau on Issuing Warning Letters to Shanshi Network Technology Co., Ltd. and Shang Xihe" issued by the Jiangsu Supervision Bureau of the China Securities Regulatory Commission due to the company's failure to make a performance forecast within one month from the date of the end of the accounting year, resulting in untimely information disclosure. In August 2023, the company received the "Decision on Giving Regulatory Warnings to the Relevant Responsible Persons of Hillstone Network Technology Co., Ltd." and the "Decision on Circulating Criticism of Hillstone Network Technology Communication Technology Co., Ltd. and Relevant Responsible Persons" issued by the Shanghai Stock Exchange, which gave a regulatory warning to Tang Yan, the then secretary of the board of directors of the company, and notified and criticized Luo Dongping, the then chairman and general manager of the company, Shang Xihe, the then chief financial officer, and Chen Wei, the then independent director and convener of the audit committee.

The company and related personnel attach great importance to the above problems and conduct deep reflection on the problems. The company and relevant personnel have submitted a written report to the Jiangsu Regulatory Bureau of the China Securities Regulatory Commission and a rectification report to the Shanghai Stock Exchange within the specified time, and in strict accordance with the laws, administrative regulations and relevant provisions of the China Securities Regulatory Commission, improve the internal control system, improve the level of corporate governance, strengthen the management of information disclosure, and conscientiously fulfill the obligation of information disclosure. The sponsor institution and the sponsor representative have urged the company and relevant personnel to strengthen the study of the laws, regulations and normative documents of the listed company to prevent the recurrence of such incidents.

(2) The advance investment and replacement of the fund-raising project

1. Use the funds raised from the initial public offering to replace the self-raised funds that have been invested in the fundraising project in advance and the issuance costs have been paid

On January 7, 2020, the company held the fifteenth meeting of the first board of directors and the eighth meeting of the first board of supervisors, and deliberated and approved the "Proposal on Using Raised Funds to Replace the Self-raised Funds Invested in Advance in Fund-raising Projects and Paid Issuance Costs", and agreed that the Company will replace the self-raised funds invested in the fund-raising projects and paid issuance costs in advance with raised funds, with a replacement amount of 104.1354 million yuan.

The independent directors of the Company have issued an independent opinion with which they are expressly agreed. Grant Thornton Certified Public Accountants (Special General Partnership) issued the "Information on the Investment Project of Hillstone Network Technology Co., Ltd. with Self-raised Funds in Advance

Assurance Report (Grant Thornton (2020) No. 110ZA0031). The sponsor has verified the above situation and believes that the matter has not been more than 6 months from the arrival of the raised funds, and the matter has been deliberated and approved by the board of directors and the board of supervisors of the company, the independent directors have issued a clear consent opinion, and Grant Thornton Certified Public Accountants (Special General Partnership) has conducted a special verification and issued an assurance report, and has fulfilled the necessary procedures; The replacement of the raised funds complies with relevant laws and regulations; The use of the raised funds does not conflict with the implementation plan of the raised funds investment project, does not affect the normal progress of the raised funds investment project, and does not change or disguise the investment direction of the raised funds and damage the interests of shareholders. The sponsor issued a no-objection verification opinion on the above matters.

2. Use the funds raised by convertible bonds to replace the self-raised funds that have paid the issuance costs

On June 7, 2022, the company held the sixth meeting of the second board of directors and the fourth meeting of the second board of supervisors.

The "Proposal on Using Convertible Bonds to Raise Funds to Replace the Self-Raised Funds with Paid Issuance Costs" was deliberated and approved, and it was agreed that the company would use the funds raised by convertible bonds to replace the self-raised funds that had paid the issuance costs, with a total replacement fund of 2.6308 million yuan.

The independent directors of the company issued an independent opinion with clear consent, and Grant Thornton Certified Public Accountants (Special General Partnership) issued the "Assurance Report on the Special Explanation of the Use of Convertible Bonds to Raise Funds to Replace the Self-Raised Funds Paid for the Issuance Costs by Hillstone Network Technology Co., Ltd." (Grant Thornton (2022) No. 110A012337). The sponsor has verified the above situation and believes that the matter has not been more than 6 months from the arrival of the raised funds, and the matter has been deliberated and approved by the board of directors and the board of supervisors of the company, the independent directors have issued a clear consent opinion, and Grant Thornton Certified Public Accountants (Special General Partnership) has conducted a special verification and issued an assurance report, and has fulfilled the necessary procedures; The replacement of the raised funds complies with relevant laws and regulations; The use of the raised funds does not conflict with the implementation plan of the raised funds investment project, does not affect the normal progress of the raised funds investment project, and does not change or disguise the investment direction of the raised funds and damage the interests of shareholders. The sponsor issued a no-objection verification opinion on the above matters.

(3) The increase in the number of entities involved in the implementation of the investment project with raised funds

1. New implementation entities for IPO fundraising projects

On November 21, 2019, the Company held the 14th meeting of the first board of directors and the 7th meeting of the first board of supervisors

It was agreed to add new wholly-owned subsidiaries Hillstone Networks Corp. (hereinafter referred to as "Hillstone") and Beijing Hillstone Network Technology Information Technology Co., Ltd. (hereinafter referred to as "Hillstone") as the implementation entities of the "Network Security Product Line Expansion and Upgrading Project", "High-performance Cloud Computing Security Product R&D Project" and "Marketing Network and Service System Construction Project", and use the raised funds to increase the capital of Hillstone by US$5 million and Beijing Hillstone by 20,000 10,000 yuan to implement fundraising projects.

The independent directors of the Company have issued an independent opinion with which they are expressly agreed. The sponsor has verified the above situation and believes that:

The above matters have fulfilled the necessary legal procedures and complied with the relevant regulations of the China Securities Regulatory Commission and the stock exchange on the use of funds raised by listed companies. The source of funds for the capital increase is the funds raised by the company's initial public offering of shares, and the implementation of the fund-raising project by adding the implementation of the fund-raising project and increasing the capital of the wholly-owned subsidiary is conducive to enhancing the capital strength of the implementation of the fund-raising project, ensuring the smooth implementation of the fund-raising investment project, and improving the efficiency of the use of the raised funds, which is in line with the needs of the company's development strategy and the interests of the company and all shareholders. The company does not change the investment direction of the raised funds in disguise and damage the interests of the company's shareholders. The sponsor issued a no-objection verification opinion on the above matters.

2. New implementation entities for convertible bond fundraising and investment projects

On April 26, 2022, the company held the fourth meeting of the second board of directors and the third meeting of the second board of supervisors.

Agreed to add a wholly-owned subsidiary, Beijing Shanshi, as the implementation entity of the "Suzhou Security Operation Center Construction Project" and the "Industrial Internet-based Security R&D Project", and use the raised funds to increase its capital by RMB 60 million to implement the fundraising project.

The independent directors of the Company have issued an independent opinion with which they are expressly agreed. The sponsor conducted a verification and found that the above matters had fulfilled the necessary legal procedures and complied with the relevant regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange on the use of funds raised by listed companies. The source of funds for the company's capital increase is the funds raised by the company through the issuance of convertible corporate bonds to unspecified objects, and the implementation of the fund-raising project by adding the implementation of the main body of the fund-raising project and increasing the capital of the wholly-owned subsidiary is conducive to improving the efficiency of the use of raised funds, in line with the company's development strategy needs, and in line with the interests of the company and all shareholders. The company does not change the investment direction of the raised funds in disguise and damage the interests of the company's shareholders. The sponsor issued a no-objection verification opinion on the above matters.

(4) Use idle raised funds for cash management

1. Use the funds raised from the temporarily idle initial public offering of shares for cash management

On October 16, 2019, the company held the 11th meeting of the first board of directors and the 5th meeting of the first board of supervisors

It was agreed that the company should use the temporarily idle raised funds of no more than RMB 78,000.00 (inclusive) for cash management under the condition of ensuring that the progress of the investment projects of the raised funds is not affected, the normal production and operation of the company is not affected, and the safety of the funds is ensured, and is used to purchase investment products with high security, good liquidity and guaranteed principal (including but not limited to agreement deposits, structured deposits, time deposits, etc.) Certificates of deposit, etc.), within the above limit, the funds can be used on a rolling basis, and the use period is valid for 12 months from the date of approval by the board of directors of the company.

On November 3, 2020, the company held the 21st meeting of the first board of directors and the 13th meeting of the first board of supervisors

At the meeting, the "Proposal on the Use of Temporarily Idle Raised Funds for Cash Management" was deliberated and approved, and the company's use was agreed

The temporarily idle raised funds of no more than RMB 48,000.00 (inclusive) shall be used for cash management under the condition of ensuring that the progress of the investment project of the raised funds is not affected, the normal production and operation of the company is not affected, and the safety of funds is ensured, and is used to purchase investment products with high security and good liquidity (including but not limited to agreement deposits, structured deposits, time deposits, call deposits, large-amount certificates of deposit, etc.), and the funds can be used on a rolling basis within the above quota. The term of use is valid for 12 months from the date of approval by the board of directors of the company.

On October 29, 2021, the company held the 29th meeting of the first board of directors and the 20th meeting of the first board of supervisors

At the meeting, the "Proposal on the Use of Temporarily Idle Raised Funds for Cash Management" was deliberated and approved, and it was agreed that the company and its wholly-owned subsidiaries should use the temporarily idle raised funds with a quota of no more than RMB 20,000.00 (inclusive) for cash management under the condition of ensuring that the progress of the fund-raising project is not affected, the normal production and operation of the company is not affected, and the safety of funds is ensured, which is used to purchase investment products with high security and good liquidity (including but not limited to agreement deposits, structured deposits, time deposits, Call deposits, large certificates of deposit, etc.), within the above limits, the funds can be used on a rolling basis

The term of use is 12 from the expiration date of the last delegation term (November 3, 2021) after the Board's deliberation and approval

Valid for one month.

On October 25, 2022, the company held the 11th meeting of the second board of directors and the 7th meeting of the second board of supervisors

The company and its wholly-owned subsidiaries are approved to use the funds raised from the temporarily idle initial public offering of shares with a limit of no more than RMB 40 million (inclusive) to carry out cash management under the condition of ensuring that the progress of the fundraising project, the normal production and operation of the company and the safety of funds are not affected, and the investment products with high security and good liquidity (including but not limited to agreement deposits, Structured deposits, time deposits, call deposits, large-amount certificates of deposit, etc.), within the scope of the above quota, the funds can be used on a rolling basis, and the use period is after the board of directors deliberates and approves, from the expiration date of the last authorization period

Valid for 12 months from November 3, 2022.

The independent directors of the Company have issued an independent opinion with which they are expressly agreed. The sponsor has verified the above-mentioned use of funds raised from temporarily idle initial public offerings for cash management, and believes that the above-mentioned circumstances have fulfilled the necessary approval procedures and complied with the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the Regulatory Guidelines for Listed Companies No. 2 - Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies, the Guidelines for the Application of the Self-Regulatory Rules for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation, and other laws and regulations. Hillstone Network Technology Co., Ltd. Raised Funds Management System" and other relevant regulations, the raised funds have been stored in a special account and used in a special way, and the relevant information disclosure obligations have been fulfilled in a timely manner, and there is no disguised change in the use of raised funds and damage to the interests of shareholders, and there is no illegal use of raised funds. The sponsor issued a no-objection verification opinion on the above matters.

2. The use of temporarily idle convertible bonds to raise funds for cash management

On April 26, 2022, the company held the fourth meeting of the second board of directors and the third meeting of the second board of supervisors.

The "Proposal on Using the Funds Raised by Temporarily Idle Convertible Bonds for Cash Management" was deliberated and approved, and it was agreed that the Company and its wholly-owned subsidiaries should use the funds raised by temporarily idle convertible bonds with a quota of no more than RMB 20,000.00 (inclusive) for cash management under the condition of ensuring that the progress of the fundraising and investment projects is not affected, the normal production and operation of the Company is not affected, and the safety of funds is ensured, which is used to purchase investment products with high security and good liquidity (including but not limited to contractual deposits, structured deposits, and time deposits). , call deposits, certificates of deposit, etc.), within the above limit, the funds can be used on a rolling basis, and the use period is valid for 12 months from the date of approval by the board of directors. The independent directors expressed their unequivocal concurring opinions.

On April 27, 2023, the Company held the 15th meeting of the second session of the Board of Directors and the 8th meeting of the second session of the Board of Supervisors

It was agreed that the company and its wholly-owned subsidiaries should use the funds raised by temporarily idle convertible bonds with a quota of no more than RMB 20,000.00 (inclusive) for cash management under the condition of ensuring that the progress of the fundraising and investment projects is not affected, the normal production and operation of the company is not affected, and the safety of funds is ensured, which is used to purchase high-security and well-liquid principal-guaranteed investment products (including but not limited to agreement deposits, structured deposits, Time deposits, call deposits, certificates of deposit, etc.), within the above limits, the funds can be used on a rolling basis, and the use period is valid for 12 months from the date of approval by the board of directors. The independent directors expressed their unequivocal concurring opinions.

On March 27, 2024, the Company held the 24th meeting of the second session of the Board of Directors and the 13th meeting of the second session of the Board of Supervisors

At the meeting, the "Proposal on the Use of Temporarily Idle Convertible Bonds to Raise Funds for Cash Management" was deliberated and approved, and it was agreed that the company and its wholly-owned subsidiaries should use the funds raised by temporarily idle convertible bonds with a quota of no more than RMB 12,000.00 (including the principal amount) for cash management under the condition of ensuring that the progress of the fundraising and investment projects is not affected, the normal production and operation of the company is not affected, and the safety of funds is ensured, so as to purchase principal-guaranteed investment products with high security and good liquidity (including but not limited to agreement deposits and structured deposits). , time deposits, call deposits, large-amount certificates of deposit, etc.), within the scope of the above quota, the funds can be used on a rolling basis, and the period of use is after the deliberation and approval of the 24th meeting of the second board of directors, since the last authorization

Valid for 12 months from the expiration date of the term (April 26, 2024).

On March 27, 2025, the Company held the second meeting of the third board of directors and the second meeting of the third board of supervisors.

The "Proposal on Using the Funds Raised by Temporarily Idle Convertible Bonds for Cash Management" was deliberated and approved, and it was agreed that the Company and its wholly-owned subsidiaries should use the funds raised by the temporarily idle convertible bonds with a quota of no more than RMB 30 million (inclusive) for cash management under the condition of ensuring that the progress of the investment projects of the raised funds will not be affected, the normal production and operation of the Company will not be affected, and the safety of funds will be used to purchase principal-guaranteed investment products with high security and good liquidity (including but not limited to cooperatives).

Qualitative deposits, structured deposits, time deposits, call deposits, large-amount certificates of deposit, etc.), within the scope of the above quota, the funds can be used on a rolling basis, and the use period is after the second meeting of the third board of directors is deliberated and approved, since the last authorization period

Valid for 12 months after the expiration date (April 25, 2025).

The sponsor has verified the above matters and believes that the above matters have fulfilled the necessary approval procedures and complied with the relevant laws and regulations such as the Regulatory Guidelines for Listed Companies No. 2 - Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies, the Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation, and the Management System for Raised Funds of Hillstone Network Communication Technology Co., Ltd. and other relevant regulations. The sponsor issued a no-objection verification opinion on the above matters.

(5) Raise funds to temporarily supplement liquidity

On March 27, 2025, the company held the second meeting of the third board of directors and the second meeting of the third board of supervisors.

Reviewed and approved the "Proposal on Using Part of the Idle Convertible Bonds to Raise Funds to Temporarily Replenish Liquidity", and agreed that on the premise of ensuring that the construction progress of the fund-raising project is not affected, in order to improve the efficiency of the use of the raised funds and reduce the company's financial costs, the company and its wholly-owned subsidiaries plan to use part of the idle raised funds not more than RMB 40 million (inclusive) to temporarily supplement the working capital for business development, daily operation and other production and operation related to the main business. The term of use shall not exceed 12 months from the date of approval by the Board.

The sponsor has verified the above situation and believes that the above-mentioned matters have been deliberated and approved by the board of directors and the board of supervisors of the company, and the necessary decision-making procedures have been performed, in line with relevant laws and regulations and the provisions of the company's fund-raising management system. The company and its wholly-owned subsidiaries use part of the idle convertible bonds to temporarily replenish the working capital is conducive to improving the efficiency of the use of the raised funds, reducing the company's financial costs, will not affect the normal development of the company's raised funds investment projects, and there is no disguised change in the use of the raised funds. The sponsor issued a no-objection verification opinion on the above matters.

(6) Some fundraising projects have been postponed

1. Some IPO fundraising projects have been postponed

On April 26, 2022, the company held the fourth meeting of the second board of directors and the third meeting of the second board of supervisors.

The "Proposal on the Postponement of Part of the Initial Public Offering of Shares" was deliberated and approved, and it was agreed that the "Network Security Product Line Expansion and Upgrading Project" and the "High-performance Cloud Computing Security Product R&D Project" would reach the scheduled state of use

Adjusted to March 31, 2023. The postponement of the IPO fundraising project has not changed the content of the fundraising project, the purpose of investment,

The total amount of investment and the subject of implementation.

The independent directors of the Company have expressed their independent opinions on this matter, which are clearly agreed. The sponsor has verified the above situation and believes that the postponement of part of the IPO has been deliberated and approved by the board of directors and the board of supervisors of the company, and the independent directors have issued independent opinions that they agree with, fulfilled the necessary decision-making procedures, and met the requirements of relevant laws, regulations and normative documents. The postponement of the IPO will not have a significant adverse impact on the normal operation of the company, and there is no disguised change in the use of the raised funds, no change or disguised change in the investment direction of the raised funds and damage to the interests of shareholders. The sponsor issued a no-objection verification opinion on the above matters.

2. Some convertible bond fundraising projects have been postponed

On March 27, 2025, the company held the second meeting of the third board of directors and the second meeting of the third board of supervisors.

The "Proposal on the Extension of the Issuance of Convertible Corporate Bonds to Unspecified Objects" was deliberated and approved, and it was agreed to adjust the time for the "Suzhou Security Operation Center Construction Project" and the "Industrial Internet-based Security R&D Project" to reach the scheduled usable state to September 30, 2026.

The sponsor has verified the above situation and believes that the postponement of some convertible bond fundraising projects of Hillstone Network Technology has been deliberated and approved by the board of directors and the board of supervisors of the company, and the necessary decision-making procedures have been performed, which meets the requirements of laws and regulations such as the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the Regulatory Guidelines for Listed Companies No. 2 - Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies, and the Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation. The postponement of some convertible bond fundraising projects will not have a significant adverse impact on the normal operation of the company, and there is no disguised change in the use of the raised funds, no change or disguised change in the investment direction of the raised funds and damage to the interests of shareholders. The sponsor issued a no-objection verification opinion on the above matters.

6. Explanation and evaluation of the listed company's cooperation with the sponsorship

During the period of continuous supervision, the company can standardize its operation in accordance with the requirements of relevant laws, regulations and rules, and disclose information in a timely and accurate manner in accordance with the requirements of relevant laws, regulations and rules; Important mattersThe company can notify and communicate with the sponsor in a timely manner, provide relevant documents at the request of the sponsor, and actively cooperate with the sponsor's on-site inspection and other supervision work.

7. Explanation and evaluation of the work related to the participation of securities service institutions in the issuance and listing of securities

In the continuous supervision stage, other securities service providers engaged by the company can carry out the relevant securities issuance and listing with due diligence

work, in accordance with relevant laws and regulations to issue relevant reports in a timely manner, provide professional and independent opinions and suggestions, and actively cooperate with the sponsor to coordinate, verify and continue to supervise the relevant work.

8. Concluding opinions on the review of information disclosure of listed companies

After verification, the sponsor believes that during the continuous supervision of Hillstone Network Technology, it received a verbal warning from the Shanghai Stock Exchange in December 2019 due to its failure to timely disclose the government subsidies related to the income, resulting in untimely information disclosure; The company failed to make a performance forecast within one month from the end of the fiscal year in a timely manner, resulting in untimely information disclosure, and received warning letters and regulatory warnings issued by the Jiangsu Regulatory Bureau of the China Securities Regulatory Commission and the Shanghai Stock Exchange in May 2023 and August 2023. The sponsor institution and the sponsor representative have urged the company and relevant personnel to strengthen the study of the laws, regulations and normative documents of the listed company to prevent the recurrence of such incidents.

In addition to the above matters, during the period of continuous supervision, the company strictly follows the "Administrative Measures for Information Disclosure of Listed Companies", "Shanghai Stock Exchange Science and Technology Innovation Board Listing Rules" and other relevant provisions of information disclosure, and publicly releases various periodic reports and temporary announcements in accordance with the law to ensure that the disclosure of material information is timely, accurate, true and complete, and there are no false records, misleading statements or major omissions, so as to ensure that all shareholders, including small and medium-sized shareholders, have equal access to information and that the information disclosure dossier is kept complete.

9. Concluding opinions on the review of the use of funds raised by listed companies

After verification, the sponsor believes that the deposit and use of the raised funds during the continuous supervision period of the company comply with the "Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange", "Regulatory Guidelines for Listed Companies No. 2 - Regulatory Requirements for the Management and Use of Raised Funds by Listed Companies", and "Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Regulations".

and other laws and regulations, and timely fulfilled the obligation of relevant information disclosure. As of December 31, 2024,

The company does not change the use of raised funds in disguise and damage the interests of shareholders, and there is no illegal use of raised funds.

As of December 31, 2024, the company still has some of the funds raised by the convertible bonds that have not been used, and the sponsor will agree

The use of the proceeds continues to fulfill its responsibility of continuous supervision.

10. Other matters required by the China Securities Regulatory Commission and the Shanghai Stock Exchange

Not.

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