Polynin Explains Reason for Not Recognizing Q2 U.S. Royalty Revenue

1. Date of Event: 115/08/25

2. Company Name: Polynin Far East Biotech Co., Ltd.

3. Relationship to Company (please specify '本公司' or 'subsidiary'):本公司 (the Company)

4. Cross-shareholding Ratio: Not applicable

5. Reason for Occurrence: On August 25, 115 (Republic of China calendar, same below), the Company received the Q2 115 royalty report from its licensing partner, Akebia Therapeutics, Inc. (hereinafter 'Akebia'). The report included only royalty settlement data for the Japan region, differing from previous reports that covered both the U.S. and Japan regions.

This is because Akebia claims that its U.S. licensed patents expired on April 21, 115, and therefore it is no longer obligated to pay royalties for Auryxia (the U.S. brand name of Nephoxil) in the U.S. region. The Company disagrees with this assertion and has requested clarification of facts. As both parties failed to reach a consensus prior to royalty settlement, Akebia delivered only the Japan portion in advance.

6. Response Measures: Both parties are continuing to exchange relevant patent information and negotiating the payment period and method for U.S. region royalties. The Company has consulted legal advisors and reserves all rights to take actions under the valid contract and applicable laws.

7. Other Matters to be Disclosed (If the subject of the event or resolution is a publicly listed company or above, this material information also qualifies as a matter under Article 7, Paragraph 9 of the Enforcement Rules of the Securities and Exchange Act that significantly affects shareholders' rights or securities prices):

(1) The Company has licensed multiple U.S. patents to Akebia. Only a portion of these patents expired on April 21, 115, while other licensed patents remain in effect. The two parties hold differing interpretations regarding the effective period of the U.S. licensed patents, resulting in a discrepancy in defining the royalty payment period. The Company maintains that Akebia's obligation to pay U.S. royalties remains valid as of the date of this announcement and has formally responded, stating disagreement with the other party's claim.

(2) Royalty income related to this matter is settled quarterly, with the previous quarter's revenue recognized in the second month of the following quarter. That is, Q2 115 royalty income was scheduled to be recognized in August 115.

(3) The Company has assessed that it will temporarily refrain from recognizing Q2 115 U.S. region royalty income in August 115. Consequently, this revenue will not be included in the Company's consolidated operating income for August 115.

(4) The disputed amount and final financial impact cannot currently be reasonably estimated. For investor reference, the U.S. region royalty income recognized by the Company in August 114 accounted for approximately 32% of the consolidated operating income for August 114 and about 6% of the consolidated operating income from January to August 114. The aforementioned historical data does not represent the actual financial impact of this event.

(5) Both parties are currently in negotiations and have not yet reached an agreement on a resolution or supplemental terms to the licensing contract. The original licensing contract has not been amended, terminated, or rescinded.

(6) This matter concerns only the end date of the royalty payment period for the U.S. region. Royalty settlement and payment for other licensed regions remain unaffected and will proceed according to the agreed schedule.

(7) Should the parties reach a consensus, sign a supplemental contract, recalculate U.S. region royalties, or if there is a significant change in the financial impact of this matter, the Company will disclose relevant information in accordance with applicable laws.