The following information was originally prepared and published by GNI Group Ltd. in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock Exchange. This English summary translation is fo

1. Consolidated Financial Results for FY2023 (January to December)

(1) Consolidated Operating Results

(2) Consolidated Financial Position

(3) Consolidated Cash Flows

3. Consolidated Earnings Forecasts for FY2024 (January to December)

For details regrading the performance forecasts above, please refer to the attached document "1. Analysis of Operating Results and Financial Position (5)

Outlook for the fiscal year ended December 31,2024"

(1) Changes in Significant Subsidiaries during the Period under Review: Yes

(Changes in specified subsidiaries resulting in a change in the scope of consolidation)

New: Gyre Therapeutics, Inc., Berkeley Biologics LLC

(2) Changes in Accounting Policies and Changes in Accounting Estimates

Changes in accounting policies that are required under

Changes in accounting policies other than : N.A.

Changes in accounting estimates: N.A.

(3) Number of Shares Issued (Common Stock)

* This consolidated financial report is not subject to audit procedures by certified public accountants or an auditing firm.

* Explanation Concerning the Proper Use of Financial Results Forecasts and Other Relevant Specific Items

Forward-looking statements including earnings forecasts contained in this report are based on currently available information and

management's assumptions and beliefs regarding uncertainties that may impact future earnings forecasts. The Company cautions readers that actual results may differ materially from forecasts due to a variety of factors. For the assumptions that

underpin financial results forecasts as well as other related items, please refer to "1. (5) Outlook for the fiscal year ending December 31, 2024."

The Group is planning to conduct a corporate presentation meeting for institutional investors and analysts on February 20, 2024. The

presentation material for the meeting will be disclosed in advance, and the contents of the Q&A session, among other details, will be promptly disclosed after the meeting.

* Please note that "-" is used YoY change ratios, if either or both the current period (this quarter) and the previous period (same

quarter of the previous year) is negative, or if the change ratio is above 1,000%.

1. Analysis of Operating Results and Financial Position

(1) Analysis of operating results

In 2023, the global economy experienced a relaxation of the stringent measures related to the COVID-19 infection, leading to a return to stability.

However, geopolitical risks, such as the intensification of the situation in the Middle East, increased, creating an unpredictable environment.

The Japanese economy has also demonstrated a certain level of stabilization as the impact of the COVID-19 infection subsides, and towards the year-end,

positive factors such as the Nikkei Stock Average reaching its highest level since the bubble era have been observed; however, inflation has arisen due to the yen's depreciation, and addressing the gap with income increases is being highlighted as

a significant challenge.

On the other hand, in the biotechnology sector to which our company belongs and in the TSE Growth Market, an overall challenging situation has been

persisting due to growing concerns about future domestic interest rate hikes.

Despite these circumstances, GNI Group Ltd. ("the Company" or "we") and its affiliated companies ("the Group") have achieved significant increases in

revenue and profit, recording all-time highs in revenue, operating profit, and net profit. Several projects that the Group has been actively pursuing as a foundation for future business development have also yielded important results.

In the Pharmaceutical Segment, Beijing Continent Pharmaceutical Co., Ltd. (BC), a major subsidiary of the Group, continued to see strong sales of its main

product, ETUARY , contributing significantly to the increase in revenue. In addition, as disclosed on October 26, 2023, BC has significantly accelerated the schedule for patient enrollment in the Phase III clinical trial of its promising

next-generation core product, F351 (generic name: Hydronidone), in China, completing it ahead of the initially planned timeframe for 2023, and BC is actively collecting data. Furthermore, as announced on October 31, 2023, BC successfully concluded

a transaction with Catalyst Biosciences, Inc. ("CBIO"), a company listed on the U.S. Nasdaq market. CBIO has subsequently changed its name to Gyre Therapeutics, Inc. ("GYRE") and is actively preparing to file an IND (Investigational New Drug)

application for the Phase II clinical trial for metabolic dysfunction-associated steatohepatitis (MASH: The disease name, Metabolic Dysfunction Associated Steatohepatitis, was formerly known as NASH [Non-Alcoholic Steatohepatitis].) in the United

States in 2024. In addition, to leverage the established sales network in China, BC has commenced the development and sale of other generic orphan drugs.

Additionally, our U.S. subsidiary, Cullgen Inc. ("Cullgen"), which is advancing research and development utilizing its unique targeted protein degradation

technology through its facilities in the United States and China, successfully secured $35 million in funding with AstraZeneca-CICC Fund as the lead investor, as disclosed on May 9, 2023. Furthermore, as disclosed on June 15, 2023, Cullgen entered

into a partnership with Astellas Pharma Inc. ("Astellas Pharma") for the innovative development of protein degraders and is actively advancing the research. This collaboration not only resulted in an upfront fee of $35 million but also secured a

stable source of monthly revenue, leading to Cullgen achieving profitability in IFRS. Cullgen could receive up to $1.9 billion in total compensation from this collaboration. In line with the disclosure from July 31, 2023, the company is progressing

with Phase I/II clinical trials for its TRK degrader, an oncology drug candidate, in China. For several other programs, Cullgen is actively progressing research and development to apply for clinical trial approval.

With regards to the Medical Device Segment, our subsidiaries' performance remains robust, led by Berkeley Advanced Biomaterials LLC ("BAB"), which is

engaged in the biomaterials business in the United States. As disclosed on September 19 and November 10, 2023, the Group acquired a portion of the orthobiologics business from Elutia Inc., a company listed on the U.S. Nasdaq market, and is actively

working on the expansion of this business.

As disclosed on November 20, 2023, CVI Investments, Inc. ("CVI") exercised all the 46th and 47th warrants, and in addition, the Company repurchased and

cancelled the 48th warrants allocated to CVI. As a result, the Company has secured funds for further growth and eliminated concerns about the potential dilution of approximately 9% of the outstanding shares.

Operating results by segment

Pharmaceutical Segment

For fiscal year 2023, our main subsidiary BC continued to achieve record-high revenue in the local currency for its main product, ETUARY ,

showing robust revenue growth in China. In addition, Cullgen's partnership with Astellas Pharma on the development of protein degraders contributed significantly, with an upfront payment of 35 million US dollars and monthly revenue from joint

development expenses. For the current consolidated fiscal year in the pharmaceutical segment, revenue and segment profit were JPY 22.9 billion up 53.3% YoY, and JPY12.0 billion, up 2,687.3% YoY, respectively.

Medical Device Segment

Our Medical Devices Segment also demonstrated robust performance. As previously disclosed on September 19 and November 10, 2023, the Group acquired a

portion of the orthobiologics business from Elutia Inc, a Nasdaq-listed company. Revenue and segment income amounted to JPY 3.0 billion, up 21.3% YoY, and JPY 1.0 billion, up 14.3% YoY, respectively.

Selling, General and Administrative Expenses; Research and

Development Expenses

Selling, general and administrative (SG&A) expenses in JPY terms for 2023 were JPY 15.2 billion, up 39.5% YoY. The increase in SG&A expenses comes

mainly from such factors as increased sales and marketing expenses due to the expansion of the sales structure at BC, legal expenses related to CBIO transaction, and increased miscellaneous expenses at GYRE after the completion of the transaction.

Research and Development expenses in JPY terms for 2023 were JPY 2.5 billion, up 0.5% YoY, driven by the progress in research and development at BC and

Cullgen in China. BC's research and development expenses include costs related to the development of new pipelines as well as the commercialization of other generic orphan drugs.

Finance Income and Finance Costs

In 2023, the Group recorded finance income of JPY 771 million, up 196.9% YoY caused mainly by currency translation from depreciating Japanese yen.

In 2023, the Group recorded finance costs of JPY 1,250 million, up 43.8% YoY. These finance costs come from non-cash accrual of interest expenses related

to financing activities at Cullgen.

(2) Analysis of financial position

As of 2023 end, the total assets stood at JPY 62.3 billion, a 84.0% increase compared to

the previous fiscal year end. This increase primarily comes from increases in cash and cash equivalents due to increased business activities and in goodwill due to M&A activities.

As of 2023 end, the total liabilities stood at JPY 26.3 billion, a 86.9% increase compared to the previous fiscal year end. This increase was due to

non-cash interest expenses related to Cullgen's funding.

As of 2023 end, the total equity stood at JPY36.0 billion, a 82.0% increase compared to the previous fiscal year end. The increase was mainly due to the

increase in retained earnings coming from the increases in revenue, capital stock and capital surplus resulting from the exercise of warrants.

(3) Analysis of cash flows

Cash flows from operating activities

The cash flow from operating activities came to JPY 6.5 billion in 2023, a 1,565.1% increase YoY. The main drivers are BC's robust sales growth and

Cullgen's collaboration contract with Astellas Pharma.

Cash flows from investing activities

The cash flow from investing activities came to negative JPY 6.8 billion in 2023, a 66.2% YoY increase. The major sources of the increase are investments

related to acquisitions and a purchase of long-term deposits.

Cash flows from financing activities

The cash flow from financing activities came to positive JPY 10.6 billion in 2023 vs negative JPY 0.6 billion in 2022. This is mainly due to an increase

in income from the issuance of new shares through the exercise of warrants and from Cullgen's Series C preferred share issuance.