LANCANG TEA has announced that on June 30, 2026, the company and Guangzhou Kangrui received a Civil Judgment from the court. According to this initial ruling, the court's primary judgments are as follows: 1. Guangzhou Minghui Technology Co., Ltd. and Guangzhou Kangrui are to return a payment of RMB 30 million to Hebei Huaen Trading Co., Ltd.; 2. Guangzhou Minghui Technology Co., Ltd. and Guangzhou Kangrui must pay a penalty of RMB 1 million and related interest to Hebei Huaen Trading Co., Ltd.; 3. Ms. Wang Juan, Mr. Zhang Muheng, Guangzhou Tiansu Information Technology Co., Ltd., and LANCANG TEA (ASX: 06911) are to bear joint and several liability for the above debts; and 4. LANCANG TEA, Guangzhou Kangrui, Guangzhou Minghui Technology Co., Ltd., Ms. Wang Juan, Mr. Zhang Muheng, and Guangzhou Tiansu Information Technology Co., Ltd. are to bear the court acceptance fees and litigation preservation fees.

This initial judgment is a first-instance ruling. The company and Guangzhou Kangrui intend to appoint legal representatives to file an appeal in accordance with legal procedures. Following an investigation, the actions of Ms. Wang Juan and Mr. Zhang Muheng in improperly issuing letters of authorization and personal guarantees or sureties have harmed the group's interests. The board of directors has required the two individuals to be responsible for settling the debts involved in the lawsuit. The two individuals have irrevocably undertaken and guaranteed that they will bear all losses incurred by the company and Guangzhou Kangrui as a result of the lawsuit.

Subsequently, based on the final judgment of the lawsuit and the actual economic losses caused to the group, the board of directors will take all necessary measures, including but not limited to initiating civil litigation and other legal proceedings, to pursue corresponding accountability in order to protect the legitimate rights and interests of the group and the company's shareholders. As the initial judgment is not final and the company and Guangzhou Kangrui plan to appeal according to the law, the ultimate outcome of the lawsuit and its actual impact on the group's financial condition and operating results remain uncertain.

Should the initial judgment ultimately be upheld or if the related liabilities ultimately fall on the company and/or Guangzhou Kangrui, the group's potential liabilities may include the RMB 30 million payment, the RMB 1 million penalty, related interest, court acceptance fees, and litigation preservation fees as stated in the initial ruling. The specific amounts will depend on the final judgment, interest calculations, actual enforcement circumstances, and the results of the company's recovery efforts from the relevant responsible parties.