Material event report (merger)

What happened

Material Event Report / Korea Exchange Reporting Obligation. To: Financial Services Commission / Korea Exchange. Date: 2026-07-23. Company name: Dong-A Socio Holdings Co., Ltd.; CEO: Kim Min-young; Head office: 64 Cheonho-daero, Dongdaemun-gu, Seoul; Tel: 02-920-8114; Website: https://www.donga.co.kr; Preparer: Head of Management Support Office Ko Seung-hyun, Tel 02-920-8179.

Merger Decision 1. Merger method: Dong-A Socio Holdings absorbs its wholly owned (100%) subsidiary Dong-A Pharm Co., Ltd. - surviving company: Dong-A Socio Holdings; dissolved company: Dong-A Pharm Co., Ltd.; merger type: small-scale merger. 2. Merger purpose: to internalize core subsidiary Dong-A Pharm's competitiveness in the consumer-healthcare market and its stable cash-generating ability, securing investment funds for new growth drivers as an operating holding company; to simplify governance and improve management efficiency through faster decision-making; and to enhance corporate value by eliminating the holding-company discount caused by the subsidiary's dual listing. 3. Material effects of the merger: (1) Effect on management - the surviving company Dong-A Socio Holdings holds 100% of the dissolved company Dong-A Pharm's issued shares; it will absorb the dissolved company at a merger ratio of 1.0000000 : 0.0000000, and no new shares will be issued. Upon completion, there will be no change in the largest shareholder, and Dong-A Socio Holdings will remain the surviving company. (2) Effect on finances and operations - the merger is expected to simplify governance and improve management efficiency, and the conversion to an operating holding company is expected to improve operating cash flow. 4. Merger ratio: Dong-A Socio Holdings : Dong-A Pharm = 1.0000000 : 0.0000000. (Note on business-combination-vehicle dissolution mergers - multiple of the merger new shares' first-day listing reference price to the business-combination vehicle's last trading-day closing price - not applicable.) 5. Basis for merger ratio: because the surviving company holds 100% of the dissolved company's shares and will issue no new shares in the merger, the ratio is calculated as 1.0000000 : 0.0000000. (Corporate value - surviving company: -; dissolved company: -.) 6. External appraisal: Not applicable - basis: under the proviso to Article 176-5(8)(2)(b) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act, where a company that owns the entirety of another company's issued shares merges that company without issuing new shares, an external appraisal institution's assessment of the merger value's appropriateness is not required; this merger falls under that proviso, so no external appraisal was obtained. External appraisal institution name: -; appraisal period: -; appraisal opinion: -. 7. Type and number of merger new shares: common shares -; class shares -. 8. Merger counterparty: Dong-A Pharm Co., Ltd. (Dong-A Pharm Co., Ltd.); main business: pharmaceutical manufacturing and sale; relationship: subsidiary; most-recent fiscal-year financials (KRW): total assets 407,866,002,634; capital stock 30,000,000,000; total liabilities 148,527,328,978; revenue 726,282,880,302; total equity 259,338,673,656; net income 107,991,488,096; external auditor: Samil PricewaterhouseCoopers, unqualified (clean) opinion. (Business-combination-vehicle items - CEO, date of incorporation, head office, expected registration-statement filing date: all not applicable.) 9. Newly incorporated merger company: not applicable (company name, financials at incorporation, current-basis new business segment revenue/main business, relisting application: all not applicable). 10. Merger schedule: merger agreement date 2026-07-27; shareholder record date 2026-08-10; shareholder-register closure period: not applicable; dissenting-shareholder notice period 2026-08-10 to 2026-08-24; shareholders' meeting date: not applicable; appraisal-rights exercise period: not applicable; old share-certificate submission period: not applicable; trading-halt period: not applicable; creditor-objection period 2026-08-26 to 2026-09-28; merger effective date 2026-10-01; closing-report shareholders' meeting date 2026-10-01; merger registration date (expected) 2026-10-02; new-share-certificate delivery date: not applicable; new-share listing date: not applicable. 11. Backdoor listing: Not applicable. 12. Whether another company's backdoor-listing requirements are met: Not applicable. 13. Appraisal (dissenters') rights: exercise requirements - because this proceeds as a small-scale merger under Commercial Act Article 527-3, Dong-A Socio Holdings' shareholders are not granted appraisal rights. Expected purchase price, exercise procedure/method/period/place, expected payment timing/method, restrictions on appraisal rights, effect on the contract: all not applicable. 14. Board resolution date: 2026-07-23 - independent (outside) directors present: 4, absent: -; audit committee member who is not an independent/outside director, present: -. 15. Put-option or similar contracts: No. 16. Subject to registration statement: No - reason for exemption: because this merger proceeds as a no-new-share merger issuing no merger shares, there is no offering or sale of securities requiring a registration statement in the course of the merger. 17. Future restructuring plans: no matters finalized as of the report submission date, whether in progress or planned after completion of the merger. 18. Other matters for investment reference: 1. Because this merger is a small-scale merger under Commercial Act Article 527-3, no appraisal rights apply, and board approval substitutes for shareholders'-meeting approval of the merger. 2. Although structured as a small-scale merger, under Commercial Act Article 527-3(4), if shareholders holding 20% or more of the surviving company's total issued shares give written notice of opposition to the merger within 2 weeks of the merger public notice date, the merger may not proceed as a small-scale merger. 3. The merger counterparty's most-recent-fiscal-year financials in item 8 are based on the 2025 year-end financial statements. 4. If, between the merger-agreement date and the merger effective date (or the deadline set in the merger agreement), grounds for termination or loss of effect arise under the merger agreement - including required governmental approvals/consultations or requirements of relevant authorities, unforeseeable force majeure, abrupt economic change, material change in business condition, or other circumstances necessitating amendment - the merger agreement may be amended or terminated. 5. The merger schedule above is the expected schedule as of this material-event-report disclosure, and may change depending on consultation/approval with relevant authorities and circumstances of the merging companies. 6. The closing-report shareholders' meeting in the schedule above will, per Commercial Act Article 526(3), be replaced by a board-resolution public notice. Related disclosures: None.

[DETAILED MERGER PARTICULARS] 1. Merger overview 1) Basic merger matters (1) Purpose a. Merging companies - surviving company: Dong-A Socio Holdings Co., Ltd., located at 64 Cheonho-daero, Dongdaemun-gu, Seoul, CEO Kim Min-young, listed on KOSPI. Dissolved company: Dong-A Pharm Co., Ltd., same address, CEO Baek Sang-hwan, unlisted. b. Merger purpose - for the surviving company Dong-A Socio Holdings to internalize core subsidiary Dong-A Pharm's competitiveness in the consumer-healthcare market and stable cash-generating ability, securing investment funds for new growth drivers as an operating holding company; to simplify governance and improve efficiency through faster decision-making; and to enhance corporate value by eliminating the holding-company discount from subsidiary dual listing. c. Backdoor listing: Not applicable. d. Material effects on management, finance and operations - as of the report date, Dong-A Socio Holdings owns 100% of Dong-A Pharm. The surviving company will absorb the dissolved company at a merger ratio of 1.0000000 : 0.0000000, issuing no new shares. Upon completion, Dong-A Socio Holdings remains the surviving company and Dong-A Pharm is dissolved; there is no change in the largest shareholder's holding or stake. On a consolidated-group basis the merger is not expected to materially affect the surviving company's finances or operations, and is expected to create synergies through simplified governance and improved management efficiency from merging a wholly owned subsidiary. e. Future restructuring plans - no matters are finalized as of the report date, whether in progress or planned after completion. (2) Counterparty company overview - see "2. Matters Concerning the Merger Counterparty" below. (3) Merger form a. Merger method - the surviving company Dong-A Socio Holdings absorbs the dissolved company Dong-A Pharm; no new entity is formed. b. Whether a small-scale or simplified merger, and basis - because no new shares are issued (a no-capital-increase merger), this is a small-scale merger under Commercial Act Article 527-3, and board approval substitutes for shareholders'-meeting approval. c. Listing plans of the surviving company after the merger - the surviving company Dong-A Socio Holdings is listed on KOSPI as of the report date, with no change after the merger. d. Notable aspects of the merger method - although conducted as a small-scale merger, under Commercial Act Article 527-3(4), if shareholders holding 20% or more of the company's total issued shares give written notice opposing the small-scale merger within 2 weeks of the merger public notice date, the merger cannot proceed as a small-scale merger; and because it is a small-scale merger under Article 527-3, no appraisal rights are granted to shareholders of the merging company. (4) Progress and schedule a. Key merger schedule: merger board resolution date 2026-07-27 (sic, see also 2026-07-23 for the resolution itself) - 2026-07-23; shareholder-record-date-setting public notice 2026-07-23 (posted on the company website); material event report filing 2026-07-23; merger agreement execution date 2026-07-27; shareholder record date 2026-08-10; small-scale-merger public notice date 2026-08-10 (posted on the company website); dissenting-notice receipt period 2026-08-10 to 2026-08-24; merger-approval board resolution date 2026-08-26 (substituting for a shareholders' meeting); creditor-objection public notice date 2026-08-26 (posted on the company website); creditor-objection period 2026-08-26 to 2026-09-28; merger effective date 2026-10-01; merger-report board resolution date 2026-10-01; merger closing-report public notice date 2026-10-01; merger registration (expected) date 2026-10-02. Note 1: the "shareholder record date" above is the record date for determining which rights-holding shareholders of Dong-A Socio Holdings may express opposition to the small-scale merger. Note 2: the closing-report shareholders' meeting will be replaced by a public notice following board resolution. Note 3: the schedule above is as expected as of the disclosure date, and may change based on agreement between the merging companies, relevant statutory approvals, and consultation with relevant authorities. b. Whether a registration statement must be filed - not applicable; reason for exemption: no-capital-increase merger. c. Conditions for completion of the merger - see "3) Investment Risk Factors, 1) Risk factors that could make the merger difficult to complete" below. 2) Merger value and basis for calculation (1) Merger ratio and basis - as of the report date, Dong-A Socio Holdings owns 100% of Dong-A Pharm, and because the merger proceeds without issuing new shares (no-capital-increase method), the merger ratio is calculated as 1.0000000 : 0.0000000. (2) External appraisal - under the proviso to Article 165-4 of the Financial Investment Services and Capital Markets Act and Article 176-5(8)(2)(b) of its Enforcement Decree, where a company owning the entirety of another company's issued shares merges that company without issuing new shares, an external appraisal institution's assessment of the merger value's appropriateness is not required; this merger falls under that proviso, so no external appraisal was obtained. 3) Investment risk factors (1) Risk factors that could make the merger difficult to complete a. The termination conditions under the merger agreement are as follows. Article 12 (Termination of Agreement): 12.1 This agreement may be terminated before the merger effective date for the following reasons; provided that a party responsible for a cause of termination may not terminate on that basis: 12.1.1 where the surviving company and the dissolved company mutually agree in writing to terminate this agreement; 12.1.2 where a default, dissolution, liquidation, bankruptcy, or rehabilitation proceeding (or an application to commence such a proceeding) arises with respect to the surviving company or the dissolved company; 12.1.3 where a change in law or government regulation makes performance of the merger under this agreement impossible, and the surviving company and the dissolved company fail to reach a different agreement within 30 days of such event; 12.1.4 where the surviving company or the dissolved company breaches a representation, warranty, covenant or undertaking under this agreement causing material adverse effect, and fails to cure within 30 days of a written request to do so from the other party (no cure request is required where the nature of the breach makes cure impossible). 12.2 Effects of termination: 12.2.1 upon termination, each party must, within 14 days of the termination date, return or destroy materials or information received from the other party as the other party requests; 12.2.2 termination does not affect a party's claim for damages or other rights/remedies arising from the other party's non-performance or breach of this agreement; 12.2.3 notwithstanding termination, Articles 14.1, 14.2, 14.8 and 14.9 remain in effect. b. Shareholders of the surviving company who oppose this merger must submit their dissent regarding the small-scale merger; if dissenting shareholders submitted during the receipt period do not reach 20% or more of total issued shares, the merger will proceed under small-scale-merger procedures and appraisal rights will not apply. However, if dissenting shareholders submitted during the receipt period reach 20% or more of total issued shares, the surviving company will not proceed with this merger under small-scale-merger procedures. (2) Possibility of listing or delisting of merger new shares - not applicable, since this is a no-capital-increase merger issuing no merger new shares; this merger does not constitute a backdoor listing, so there is no possibility of delisting from this merger. (3) Risk factors to consider when investing in the related securities if the merger is completed - this merger is the absorption of wholly owned (100%) subsidiary Dong-A Pharm by Dong-A Socio Holdings via a no-capital-increase method allotting no new shares, such that the impact on the consolidated financial statements is the same before and after the merger; risk factors relevant to securities investment are therefore limited. (4) Matters concerning any option contract related to the merger - not applicable. 4) Appraisal (dissenters') rights - because this is a small-scale merger under Commercial Act Article 527-3, no appraisal rights apply, and board approval substitutes for approval of the merger. 5) Interests between the merging companies (1) Relationship between the merging companies a. Affiliate or subsidiary relationship - as of the report date, the surviving company Dong-A Socio Holdings owns 100% of the dissolved company Dong-A Pharm's issued shares, making Dong-A Pharm a wholly owned subsidiary of Dong-A Socio Holdings. b. Interlocking directorates - Kim Min-young: in-house (registered) director of Dong-A Socio Holdings; other non-executive (registered) director of Dong-A Pharm. c. Cases where one party's major shareholder is a related party of the other party - the surviving company Dong-A Socio Holdings, as the largest shareholder of the dissolved company Dong-A Pharm, owns 100% of its shares, so the major shareholder and related parties of one party are related parties of the other party. d. Other competitive or complementary business relationships - not applicable. (2) Transactions between the merging companies a. Equity investment - as of the report date, Dong-A Socio Holdings owns 100% of Dong-A Pharm. (Company: Dong-A Pharm Co., Ltd.; account: investments in subsidiaries, joint ventures and associates; number of shares: 6,000,000; equity ratio: 100%; acquisition cost (KRW million): 39,844.) Note 1: the share count above is all common shares. Note 2: acquisition cost is the book value as of 2025 year-end. b. Debt guarantees - not applicable. c. Collateral provided - not applicable. d. Purchase/sale transactions (KRW thousand): 2025 - Dong-A Socio Holdings/Dong-A Pharm - purchases 209,773, sales 4,277,319; 2024 - purchases 173,829, sales 4,354,543; 2023 - purchases 161,938, sales 4,224,368. e. Trade receivables/payables and accrued items (KRW thousand): 2025 - trade receivables 8,587,132, trade payables -, accrued liabilities 24,055, accrued receivables -; 2024 - trade receivables 4,873,683, accrued liabilities 37,060; 2023 - trade receivables 9,961,784, accrued liabilities 38,180. f. Borrowings and loans - not applicable. (3) Transactions with the merging companies' major shareholders - not applicable. 6) Other matters necessary for investor protection (1) Post-merger changes in capital - because this is a no-capital-increase merger issuing no merger new shares, there will be no change in Dong-A Socio Holdings' total issued shares or capital stock after the merger. (2) Management policy and executive composition - directors of the surviving company Dong-A Socio Holdings who took office before the merger effective date will, notwithstanding Commercial Act Article 527-4(1), retain their positions through their originally set terms unless another cause for term expiration arises; directors of the dissolved company Dong-A Pharm will lose their positions on the merger registration date.

2. Matters Concerning the Merger Counterparty 1) Company overview: Legal and commercial name - Dong-A Pharm Co., Ltd.; date of incorporation - 2013-03-01; head-office address - 64 Cheonho-daero, Dongdaemun-gu, Seoul; representative - Baek Sang-hwan; main business - pharmaceutical manufacturing and sale; fiscal year-end - December; SME status - not applicable; credit-rating/irregular-incorporation matters - not applicable. 2) Business description - Dong-A Pharm was spun off (physical division) from Dong-A Socio Holdings (formerly Dong-A Pharm Co., Ltd. before the split) effective 2013-03-01, established to manufacture and sell over-the-counter medicines, and produces various products at its Icheon, Cheonan and Dangjin plants. 3) Financial matters - summary separate financial information (KRW million): current period-end (2025-12) / prior period-end (2024-12) / two-periods-prior period-end (2023-12): Current assets: 234,314 / 210,682 / 183,927 (cash and cash equivalents 29,838 / 30,900 / 18,942; trade receivables 36,727 / 40,265 / 41,548; inventories 139,851 / 135,204 / 88,288; other 27,899 / 4,314 / 35,148); Non-current assets: 173,552 / 169,271 / 166,018 (PP&E 140,675 / 133,818 / 135,195; intangibles 6,427 / 6,155 / 5,581; right-of-use assets 6,132 / 10,127 / 5,770; investments in subsidiaries 4,900 / 4,900 / 0; other 15,418 / 14,270 / 19,471); Total assets: 407,866 / 379,953 / 349,945; Current liabilities: 143,026 / 163,127 / 157,665; non-current liabilities: 5,501 / 7,063 / 5,938; total liabilities: 148,527 / 170,190 / 163,604; Capital stock: 30,000 / 30,000 / 30,000; share premium: 5,267 / 5,267 / 5,267; other equity components: 4,615 / 4,477 / 3,933; retained earnings: 219,457 / 170,020 / 147,141; total equity: 259,339 / 209,764 / 186,341; Revenue (2025.01.01-2025.12.31 / 2024.01.01-2024.12.31 / 2023.01.01-2023.12.31): 726,283 / 678,687 / 631,026; gross profit: 366,806 / 348,201 / 323,268; SG&A: 270,508 / 254,197 / 236,309; ordinary R&D expense: 9,426 / 8,803 / 7,366; operating profit: 86,872 / 85,200 / 79,594; net income: 107,991 / 68,002 / 63,903; total comprehensive income: 108,573 / 64,463 / 56,572; basic earnings per share (KRW): 17,999 / 11,334 / 10,651; external auditor (all three years): Samil PricewaterhouseCoopers; audit opinion (all three years): unqualified. 4) External auditor's opinion - auditor and opinion by fiscal year: 13th fiscal year (2025, current) - separate audit report: Samil PricewaterhouseCoopers, unqualified opinion, no basis for qualification, no material uncertainty regarding going concern, no key audit matters noted; consolidated audit report: not applicable. 12th fiscal year (2024, prior) and 11th fiscal year (2023, two-prior): same auditor, unqualified opinion, no issues noted; consolidated audit report: not applicable for either year. 5) Board and other corporate bodies - Dong-A Pharm's board comprises 4 members: 1 in-house director, 1 other non-executive director, 1 outside director and 1 auditor. The board chair is outside director Geum Yeong-sam; no board committees are established. 6) Shareholders (1) Largest shareholder and related-party shareholdings: Dong-A Socio Holdings Co., Ltd. (largest shareholder) - common shares: opening 6,000,000 (100.0%), closing 6,000,000 (100.0%); total: common shares 6,000,000 (100.0%) at both opening and closing. (2) Largest shareholder's basic information: Dong-A Socio Holdings - number of investors: 10,223; CEO Kim Min-young holding 0.02%; largest shareholder Kang Jeong-seok holding 29.26% (figures as of 2025 year-end). (3) Largest shareholder's most-recent financial position (as of 2025-12-31, KRW million): total assets 970,493; total liabilities 287,048; total equity 683,445; revenue 88,615; operating profit 52,415; net income 34,220. 7) Executives and employees - as of the report submission date, Dong-A Pharm has 1,016 employees and executives in total. 8) Affiliates - as of the report submission date, Dong-A Pharm's affiliates are the same as those of the surviving company Dong-A Socio Holdings; see Dong-A Socio Holdings' business report for details. 9) Other matters necessary for investor protection (1) Pending litigation - none pending as of the report submission date. (2) Other contingent liabilities, etc. a. As of 2025 year-end, Dong-A Pharm's financing arrangements with financial institutions were as follows (KRW thousand / USD): Shinhan Bank - overdraft facility KRW 1,000,000 (drawn: -); purchase loan facility KRW 10,000,000 (drawn: 224,050); import L/C payment facility USD 1,500,000 (drawn: -). KB Kookmin Bank - purchase loan facility KRW 7,000,000 (drawn: -). KEB Hana Bank - factoring facility KRW 30,000 (drawn: -); trade-receivables-secured loan facility KRW 5,000,000 (drawn: 348,537). Korea Development Bank - general working-capital loan facility KRW 10,000,000 (drawn: 10,000,000, fully utilized). NongHyup Bank - general working-capital loan facility KRW 10,000,000 (drawn: 10,000,000, fully utilized). b. Assets pledged as collateral for Dong-A Pharm's obligations as of 2025 year-end (KRW thousand): land and buildings, etc. - book value 82,839,920, collateral value set 58,000,000, securing a working-capital loan of 10,000,000 from Korea Development Bank; land - book value 10,197,259, collateral value set 9,372,000, securing performance of a business plan of 8,019,876 with Dangjin City. c. Dong-A Pharm has received a guarantee of KRW 434,231 thousand from Seoul Guarantee Insurance Co., Ltd. for payment guarantees, etc. d. Matching-contribution employee-stock-ownership program - Dong-A Pharm maintains a matching-contribution program through an employee stock ownership association allowing employees to participate in a share-purchase program, contributing 50% of employees' contribution amounts during 2025. The 2025 contribution amount was KRW 1,412,600 thousand and the 2024 contribution amount was KRW 1,521,742 thousand. Employees gain the right to withdraw their held shares once 1 year has passed from the deposit date. e. Dong-A Pharm has a brand-license agreement with Dong-A Socio Holdings paying a percentage of revenue for use of the corporate identity (CI), and a license agreement with Dong-A ST Co., Ltd. for use of the "Bacchus" trademark.