与受限制清单实体交易

Our transactions with the customers on the Entity List had no material impact on our results of operations or financial positions during the Track Record Period and up to the Latest Practicable Date.

We have no ongoing business with the Entity List Designees as of the Latest Practicable Date.

Hence, our products are not subject to the U.S. export restrictions, and our past or current transactions with the customers on the Entity List will not trigger U.S. or other regional sanctions issues.

During the Track Record Period, we have sold our ODM products to a customer listed on the Entity List ("Entity List Customer"), which is identified as Customer E in "— Sales and Marketing — Customers" section above, and generated revenue of RMB2,166.8 million, RMB1,780.1 million, RMB2,609.7 million and RMB1,838.0 million in 2022, 2023, 2024, and the nine months ended September 30, 2025.

As advised by our International Sanctions Legal Advisors, given the aforementioned nature of our transactions with such Entity List Customer, these transactions did not involve any exports or transactions of any items subject to the EAR, and hence did not represent a violation of the International Sanctions.

We have undertaken to the Stock Exchange that we will not use the proceeds from the Global Offering, as well as any other funds raised through the Stock Exchange, to finance or facilitate, directly or indirectly, activities or business with, or for the benefit of, any Comprehensively Sanctioned Countries^1^ or any other government, individual or entity sanctioned by the U.S., the EU, the UN, the U.K., the United Kingdom overseas territories or Australia, including, without limitation, any government, individual or entity that is specifically identified on the SDN List maintained by OFAC or other restricted parties lists maintained by the U.S., the EU, the UN, the U.K., the United Kingdom overseas territories and Australia that would cause us to violate International Sanctions.

In 2022, 2023, 2024, and in the six months ended June 30, 2025, we had 5, 4, 8 and 7 customers, respectively, and 2, 1, 4 and 3 suppliers, respectively, that were included on the Entity List and/or designated by OFAC on the Non-Specially Designated Nationals (SDN) Chinese Military-Industrial Complex Companies List (the “NS CMIC List”), during these respective periods.

On the basis of this due diligence and legal analysis, the Export Control Legal Advisor is of the view that, during the Track Record Period and up to the Latest Practicable Date, the Group has not violated the EAR in any material respect.

The Group had transactions with entities on the NS CMIC List during the Track Record Period and expects to continue to transact with certain of these entities.

Effective October 17, 2023, the BIS added certain entities of our Group to the Entity List, specifically Beijing Biren Technology Development Co., Ltd.; Guangzhou Biren Intelligent Technology Co., Ltd.; Hangzhou Biren Technology Development Co., Ltd.; Shanghai Biren Information Technology Co., Ltd.; Guangzhou Biren Semiconductor Technology Co., Ltd.; Shanghai Biren Technology Co., Ltd.; Shanghai Xinzhili Enterprise Development Co., Ltd.; and Zhuhai Biren Integrated Circuit Co., Ltd. (collectively, the "Listed Entities").

As advised by JBK, neither the BIS Listing nor the Affiliates Rule should have a material impact on the business or operations of our Group.

For items procured by the Listed Entities that it believes may be subject to the EAR, we have identified and entered into agreements with domestic alternative suppliers, or developed in-house alternatives for items required for the development and production of our solutions and previously sourced by the Listed Entities which are or may be subject to the EAR.

We utilize certain semiconductor chips in our products, among which over 97% of the semiconductor chips concerned are non-U.S.-branded semiconductors sourced from non-restricted suppliers.

During the Track Record Period, we made only immaterial purchases (representing less than 0.1% of purchase amount for each year/period) of chips that were originally manufactured by BIS Lists suppliers.

Accordingly, our Directors are of the view that existing U.S. export controls and sanctions have not had, and are not expected to have, any material adverse effect on our business operations or financial performance, and that the risk of future restrictions materially affecting our business is low.

Certain of our customers and shareholders are listed on the Entity List: (i) Entity 1 as our customer, (ii) Entity 2 as a shareholder of our Company and (iii) Entity 3 as a shareholder of our Company and a customer (collectively referred to as the "Relevant Entities").

revenue attributable to Entity 3 amounted to approximately nil, RMB40.5 million, nil and nil in 2022, 2023, 2024 and the six months ended June 30, 2025, respectively, accounting for approximately nil, 15.8%, nil and nil of our total revenue for the same periods.

Based on the foregoing, our Directors are of the view, and the Joint Sponsors concur, that there are no material imminent risks or historical impact relating to EAR with respect to our products and solutions that would have a material impact on our business, results of operations, and financial condition.

In 2022, 2023, 2024 and the six months ended June 30, 2025, we had 13, 15, 15 and 15 customers, respectively, that were included on the U.S. Department of Commerce’s Entity List or Unverified List, and revenue generated from such customers in aggregate accounted for approximately 3.7%, 6.0%, 6.6% and 6.6% of our total revenue for the same periods.

As advised by our legal advisors as to U.S. export controls, tariff and outbound investment, our current services and products are not subject to the scope of the EAR.

Therefore, as advised by our legal advisors as to U.S. export controls, tariff and outbound investment, we believe that tariff policies have not had a material impact on our business operations, financial condition, or results of operations.

The revenue generated from such sales was approximately RMB693,685, RMB2,112,000, nil and nil for the three years ended December 31, 2022, 2023 and 2024 and the five months ended May 31, 2025, respectively, representing approximately 0.2%, 0.2%, nil and nil of our total revenue for the corresponding years, respectively.

We ceased such sales to the Non-sanctioned Customer and accordingly, Russia, as such customer is our only Russia-based customer, in July 2023.

The revenue generated from such sales was approximately RMB3.8 million, RMB0.6 million, nil and nil for the three years ended December 31, 2022, 2023 and 2024 and the five months ended May 31, 2025, respectively, representing approximately 0.9%, 0.1%, nil and nil of our total revenue for the corresponding years, respectively.

During the Track Record Period, our Group has also provided design and manufacturing services to Customer D, being designated on the Entity List maintained by the BIS and to which certain export restrictions are applicable, domestically in China, transactions were denominated in RMB and did not involve exports or transactions outside the Chinese border.

During the Track Record Period, our revenue generated from customer D amounted to RMB174.0 million, RMB104.1 million, RMB112.0 million, and RMB45.7 million, respectively.

Our Directors, and the Sole Sponsor, concur with this view from the International Sanctions Legal Advisers, and are of the view that there had been no material or adverse impact on our business, financial condition, or results of operations in relation to the relevant sanction risk.

During the Track Record Period, we have a total of seven customers and two suppliers that are listed on or are substantially owned by entities listed on the Entity List or other U.S. sanctions related lists.

These procurement and sales of such one-off violation represented approximately 4.6% of our total cost of procurement and 3.7% of our revenue for the six months ended June 30, 2025, respectively.

Further, we have adopted the following internal control procedures with respective to export control and other International Sanctions to ensure we comply with applicable International Sanctions laws and regulations:

Our revenue from this customer accounted for approximately 1.6%, 1.1%, 5.8% and 5.0% of our total revenue in 2022, 2023, 2024 and for the five months ended May 31, 2025, respectively.

Therefore, we have assigned specific codes to the raw materials provided by the Entity List Customer and kept separate inventory records for these materials to distinguish them from both our own purchased materials and materials provided by other customers for different projects.

On the basis that, no items subject to the EAR were involved in our services to the Entity List Customer, as advised by our U.S. Export Control Legal Advisor, our R&D services did not represent a violation of the applicable U.S. export controls.

One of our customers (the "SDN Customer") was listed on the SDN List in December 2023. Nonetheless, considering that (i) our transaction with the SDN Customer commenced in January 2020 and concluded in September 2022, before the designation of such customer on the SDN List;

As such, our Directors are of the view that the designation of the SDN Customer on the SDN List in 2023 does not have any material adverse impact on our business operations, financial position or future prospects.

Nonetheless, considering that the NS-CMIC List primarily prohibits U.S. persons from purchasing or selling publicly traded securities of entities thereon, and our transactions with the NS-CMIC Customer were solely sales of SiC substrates, which fell outside the scope of the NS-CMIC List, our U.S. Export Control and Sanctions Counsel is of the view that our transactions with the NS-CMIC Customer did not constitute a sanctioned activity.

During the Track Record Period, we had procured from three Relevant Entities, two of which have been designated on the Non-SDN Chinese Military-Industrial Complex Companies (“CMIC”) List by OFAC on August 2, 2021 and one of which have been designated on the Entity List maintained by the BIS on October 9, 2021.

During the Track Record Period, we had sold our AMR solutions to the non-sanctioned entities located in the Relevant Regions.

Our last transaction involving Russia was sale of certain goods by the Group to a Russia-based non-sanctioned entity entered into on July 29, 2021 and the Group has since then ceased all activities with Russia.

During the Track Record Period, our revenue derived from the Relevant Customer was approximately RMB7.7 million, RMB35.5 million, RMB13.1 million and RMB0.5 million, respectively, representing approximately 7.2%, 24.4%, 7.5% and 0.9% of our total revenue, respectively.

As at the Latest Practicable Date, a fellow subsidiary of the Relevant Customer, which is wholly-owned by the holding company of the Relevant Customer, held 2,830,209 Unlisted Shares, representing 2.1% of the issued share capital of our Company after the Listing (assuming that the Over-allotment Option is not exercised).

Overall, as advised by King & Wood Mallesons, the risk of our business violating any sanction regulations under the U.S. sanction regimes is extremely low.

Effective October 9, 2019, the U.S. Department of Commerce designated “iFLYTEK” on the Entity List (the “Entity List Designation”).

In 2021, 2022, 2023 and the six months ended June 30, 2024, our revenue generated from sales to the Designated Entity accounted for approximately 2.59%, 1.65%, 1.08% and 2.50%, respectively.

To the best of our knowledge, only less than 1.0% of our Group’s total purchase amount related to R&D, production and project implementation during the Track Record Period were of U.S. brands.

Our costs of procuring such testing services were approximately RMB400,000, RMB500, nil and nil, for the years/periods ended December 31, 2021, 2022 and 2023 and the five months ended May 31, 2024, respectively.

As advised by our International Sanctions Legal Advisors, our indirect transactions with the sanctioned receiving bank did not implicate limited restrictions applicable to such entity as an entity designated on Sectoral Sanctions Identifications List because (i) the transactions did not fall into the scope of such OFAC sectoral sanctions program as none of their transactions is made by a U.S. person or made within the United States; (ii) the limited activities involving USD payments were not restricted by the sectoral sanctions relating to new debt or equity; and (iii) the transactions were prior to its designation as a SDN.

Based on our current understanding and as advised by our International Sanctions Legal Advisors, we believe that we are not subject to sanctions risk that could have a material adverse effect on our historical procurement of testing services involving the Russia (excluding Crimea) during the Track Record Period.

We had transactions with certain companies on the Entity List and/or the list of Specially Designated Nationals and Blocked Persons (the “SDN List”) during the Track Record Period.

The transaction amount with such companies for the three years ended December 31, 2023 and the three months ended March 31, 2024 were RMB15.9 million, RMB85.0 million, RMB46.6 million and RMB11.8 million, which amounted to 1.2%, 10.2%, 4.8% and 4.9% of our total purchase amount, respectively.

The transaction amount with such companies for the three years ended December 31, 2023 and the three months ended March 31, 2024 were RMB4.3 million, RMB5.5 million, RMB12.2 million and RMB10.8 million, which amounted to 0.3%, 0.5%, 0.9% and 3.1% of our total sales amount, respectively.

One of our Controlling Shareholders, AVIC and certain of its subsidiaries ("Identified CMIC Entities"), were designated by the U.S. Department of the Treasury on the NS-CMIC List under Executive Order 13959 ("EO 13959"), on June 3, 2021, with an effective date of August 2, 2021.

During the Track Record Period, we entered into certain transactions with two customers, AG Huanan and AG Zhejiang, who were designated by BIS on the Military End-User List on December 23, 2020 and thus were restricted from receiving items subject to the EAR and listed in supplement no. 2 to part 744 of the EAR without a license.

We generated revenue of approximately US$17.2 million, US$13.6 million and US$3.8 million from transactions with AG Huanan for the years ended December 31, 2021, 2022 and 2023, respectively, representing approximately 2.3%, 1.5% and 0.4% of our Group's total revenue for the same years, respectively.

During the Track Record Period, we indirectly procured aluminium products from the Relevant Region through one of our suppliers in Singapore, who sourced from a sanctioned entity located in the Relevant Region.

Our cost of sales attributable to such indirect procurements from the Relevant Region were approximately S$0.3 million, nil and nil for the years ended 31 December 2022 and 2023 and up to the Latest Practicable Date, respectively, representing approximately 1.2%, nil and nil of our Group’s total cost of sales for the years ended 31 December 2022 and 2023 and up to the Latest Practicable Date, respectively, and approximately 8.1%, nil and nil of the total aluminium products the Group procured for the years ended 31 December 2022 and 2023 and up to the Latest Practicable Date, respectively.

Based on our best understanding and as advised by our International Sanctions Legal Advisers, we believe that we are not subject to sanctions risk that could have a material adverse effect due to our historical indirect transactions involving the Relevant Region during the Track Record Period.

We had transactions with Client I, which was on the Entity List during the Track Record Period.

The International Sanctions Legal Adviser is of the view that the sanction risk related to our transactions with Client I during the Track Record Period is low on the grounds that (i) the Group only operated and provided services to its clients in the PRC; and (ii) the Group only provided services but not servers or equipment to its clients.

As a result, the International Sanctions Legal Adviser is of the view, and the Directors concur that, as at the Latest Practicable Date, (1) there are no U.S. trade restrictions or regulations that place restrictions on the Group’s business;