■ Reflections on 2024, Preparing for 2025 and Beyond

During times of great uncertainty, our priorities at Boryung remain crystal clear: strengthening the competitive edge of our core businesses and making prudent strategic investments for future growth. At the end of last year, we completed a capital-raise process, significantly enhancing our financial stability and laying a solid foundation for sustainable long-term growth.

Boryung, with a sound financial structure, aims to reinforce our core businesses by combining prudent financing strategies with cash flows generated from these key areas while strategically investing in promising future ventures. The genuine path to enhancing corporate value lies in continuous, steady investment based on a long-term perspective. We are committed to making Boryung synonymous with sustained success.

■ Thoughts on Ownership

Since our last shareholder meeting, the most significant change within Boryung has been an intensified emphasis on ownership at every level. I have invested nearly all available assets into Boryung, aligning my interests fully with our shareholders. This capital injection gives us a robust financial base for exploring promising new business opportunities. Furthermore, following recent board discussions, I've assumed the role of sole CEO.

We're introducing a restricted stock-based compensation program to further cultivate ownership among our key executives, including a Restricted Stock Award (RSA) and Restricted Stock Unit (RSU). Previously, we used stock options as long-term incentives, but they didn't fully deliver the desired results for two reasons:

1. 1. Stock options inherently carry the limitation of not granting immediate ownership, delaying alignment until exercised.
2. 2. Executives who received stock options did not manage the entirety of our business, leading to a disconnect between their performance and overall company value.

For example, RSA shares immediately transfer ownership, and taxes must be paid upfront, instilling an immediate sense of responsibility and ownership. Therefore, RSA addresses the shortcomings of traditional stock options, aligning the interests of key talent with the company’s long-term vision.

I am not personally receiving any stock-based compensation, as my incentives are already aligned with the company's long-term growth. Such compensations will be granted selectively after thorough discussions by our HR committee and the board, focusing only on those responsible for Boryung’s entirety and indispensable to its future. We partially retained treasury shares after canceling one million early this year to support this RSA initiative without diluting overall equity.

Since key personnel in individual business units do not manage the entire company, performance-based cash incentives make more sense than stock-based compensation.We must attract and retain the best talent available to enhance competitiveness in each business area. Therefore, our compensation structures will continue to evolve accordingly. However, if these key personnel, sharing our vision for Boryung’s overall growth voluntarily choose to become shareholders, we view this as beneficial for the company’s long-term development and value creation.

■ Business Performance in 2024

Boryung places extreme transparency at the heart of our corporate values. Sustainable growth demands a cultural commitment to utmost transparency, a willingness to openly acknowledge mistakes made during decision-making, and clear discussions on improving our approach going forward.

In 2024, my own misjudgment led to the suboptimal allocation of our internal resources. While we successfully exceeded a key milestone with revenues surpassing 1 trillion KRW, growing 18.3%, we fell short of our operating profit target, generating 70.5 billion KRW, growing 3.2%. This gap is solely attributable to my misjudgments in resource allocation. Going forward, I pledge to allocate resources more efficiently, ensuring the hard work of our team fully translates into optimal results.

We categorize our businesses into two segments: core business, responsible for stable and strong cash flow, and strategic initiatives aimed at future growth. As mentioned earlier, strengthening the competitive edge of our core business and nurturing the growth of strategic ventures are top priorities for Boryung.

Our core pharmaceutical business reached a historic milestone by surpassing 1 trillion KRW in revenue for the first time, driven by products such as Kanarb, chronic disease treatments, oncology drugs, antibiotics, and our co-promotion product K-CAB. Achieving this goal, which had long been an aspiration of our founder, reflects the extraordinary dedication of our employees, for which we are immensely grateful. On profitability, we recognize the need for improved resource allocation to unlock additional growth potential, a priority management, including myself, will address clearly.

In 2024, we also made significant progress in our Contract Development and Manufacturing Organization (CDMO) business, expanding essential medicine production domestically and demonstrating our capabilities in the global market. These steps position us well for further expansion opportunities ahead.

Our strategic initiative in space medicine has yet to generate revenue or profits, yet we firmly believe in its necessity for humanity and our nation's long-term future. Through our "Humans In Space" initiative, we partnered officially with NASA’s Human Research Program last year and hosted a winning research team from the German Aerospace Center (DLR), thus creating an innovative ecosystem that fosters emerging space technologies.

Meanwhile, our partner, Axiom Space, is actively competing for NASA’s Commercial LEO Destination (CLD) contracts and progressing steadily toward docking their first module at the International Space Station by early 2027. Boryung will not rely on Axiom's success alone. Instead, we'll continuously explore and develop unique opportunities—like building essential infrastructure in space medicine—that only we can pursue.

■ Resource Allocation Going Forward

Allocating resources wisely is among management’s primary responsibilities. Our strategy involves effectively investing in both strengthening core businesses and nurturing strategic initiatives. This balanced investment encompasses financial resources and the invaluable assets of talent, infrastructure, and time.

Our core pharmaceutical business will continue enhancing its competitive edge by developing and acquiring products leveraging our robust commercial infrastructure. Our production capabilities, validated by global original product manufacturing standards, will enable us to seize further domestic and international opportunities.

For our strategic space healthcare business, we plan to shift from passive equity investments to actively leading projects, reinforcing our direct ownership and strategic control.

Boryung’s leadership, including mine, commits to responsibly enhancing our core business and strategically developing future-oriented ventures through diligent resource allocation. This commitment aims to establish Boryung as a vital enterprise that is essential to humanity’s future.

■ Inspiring the Next Generation: Humans In Space (HIS) Youth

It is our duty as a corporation to create opportunities for future generations. Partnering with the Korea Foundation for Science and Creativity, Boryung launched the "HIS Youth" competition for elementary, middle, and high school students. Elementary students visualized a "Day on the International Space Station," while older students designed experiments addressing challenges of long-term space habitation, receiving mentorship from global experts and visiting NASA and Axiom Space.

Artworks from 20 elementary teams will be sent to the ISS during Axiom’s Ax-4 mission in June, with plans for live sessions between the station and Korean students. As luck would have it, Jonny Kim—a Korean-American astronaut—will be aboard the International Space Station during that time. I can vividly imagine him introducing our children's artwork in Korean from orbit, which is a wonderful image. More importantly, it inspires me to dream of a day when an astronaut from Korea, aboard a space facility built by Korea, can directly communicate with our children and help them dream even bigger dreams.

We intend to make this contest an annual tradition, believing strongly that it will help the next generation develop richer perspectives on our world and humankind.

■ Thoughts on the Annual Letter

I view our annual letter as a precious opportunity—one of candor, reflection, and learning. It provides us with a moment each year to honestly share our past decisions, discuss openly what we’ve learned from them, and clarify our direction going forward. Maintaining absolute transparency is my clear responsibility, and I firmly believe that sharing openly—both successes and mistakes—is integral to building lasting trust.

True corporate value can never be boiled down to mere numbers on a balance sheet. Instead, it emerges from a more complex combination of purpose and meaning, company history, leadership vision, and our long-term direction. In these letters, I promise always to share my thoughts candidly and honestly. Through ongoing communication, I will continuously strive to deepen our common understanding—among shareholders, employees, and broader stakeholders—of what kind of company we aspire to become and how we intend to build lasting value.

Lastly, this letter also gives me a unique chance to express gratitude that often goes unsaid. Boryung has reached today's position through many individuals’ extraordinary efforts and dedication. As it has been wisely said, "Those who forget history have no future." I sincerely appreciate to everyone who has contributed to our journey since the company's inception. I assure you their contributions are not forgotten, and I pledge to build upon the valuable legacy they have left us. My gratitude extends to former CEO Daniel Chang and all past leaders who have guided Boryung's success thus far.

2025.03.27

CEO & Chairman, Jay Kim