JLMAG Plans to Reallocate USD 15 Million of Convertible Bond Proceeds to Debt Repayment and Raw Materials

JLMAG announced a proposed adjustment to the deployment of unutilized proceeds from its USD 117.50 million 1.75% H-share guaranteed convertible bonds due 2030.

The company has used USD 8.07 million of the USD 115.00 million net proceeds, leaving USD 106.93 million unspent. Management now seeks shareholder approval to shift USD 15.00 million originally earmarked for H-share buybacks: USD 6.00 million would be redirected to near-term debt repayment and USD 9.00 million to raw-material procurement under general working capital.

Post-reallocation, the unutilized proceeds would be distributed as follows: • Debt repayment: USD 16.00 million (14.96% of remaining funds) • H-share buyback: USD 55.33 million (51.74%) • General working capital: USD 34.00 million (31.80%), including USD 21.50 million for raw materials and USD 12.50 million for equipment purchases • Issuer operating expenses: USD 1.60 million (1.50%)

All remaining funds are expected to be deployed by end-2027.

Rationale 1. Debt profile: As of 30 June 2026, JLMAG reported RMB 806.30 million in short-term borrowings and RMB 1.07 billion in long-term borrowings, with a 51.8% debt ratio. Roughly RMB 206 million of loans mature within six months; the USD 6.00 million reallocation is intended to strengthen near-term liquidity and optimize capital structure.

2. Capacity and procurement needs: Annual production capacity for high-performance rare-earth permanent magnets reached 40,000 tonnes and is slated to hit 60,000 tonnes by end-2027. First-half 2026 revenue rose 33.04% year-on-year to RMB 2.23 billion in new-energy vehicles and 96.40% to RMB 261 million in robotics and industrial servo motors. Higher raw-material demand underpins the USD 9.00 million shift to procurement.

3. H-share buyback flexibility: Of the initial USD 76.00 million allocated to repurchases, only USD 5.67 million has been spent. Even after the reallocation, USD 55.33 million remains available, which the board views as adequate for future buyback plans subject to market conditions.

A shareholder meeting will be convened to vote on the proposed change. Other intended uses of proceeds remain unchanged, and the company states that the adjustment will improve capital efficiency while supporting ongoing expansion and financial stability.