Hunan Haili Chemical Industry Co., Ltd. announced a private placement of not more than 138,536,852 A shares for gross proceeds of not more than CNY 700,000,000 on May 27, 2022. The number of shares issued in this transaction shall not exceed 10% of the total share capital of the company before the transaction. The transaction will include participation from no more than 35 specific investors, including the company's controlling shareholder Hunan Haili High & New Technology Industry Group Co.

for not less than CNY 150,000,000 and the shareholding ratio after transaction is not less than 23.50%. After the completion of this transaction, Hunan Haili High & New Technology Industry Group Co., the controlling shareholder of the company, shall not transfer its newly acquired shares within 18 months from the end of this transaction. The shares subscribed by other issuers other than Hunan Haili High & New Technology Industry Group Co.

shall not be transferred within six months from the date of the end of this transaction. If the lock-up period of the shares subscribed by the issuer is inconsistent with the relevant regulations of the China Securities Regulatory Commission, the Shanghai Stock Exchange and other regulatory authorities, the lock-up period of the issuer shall be adjusted accordingly in accordance with the regulations of the relevant regulatory authorities. The company signed the conditional effective share subscription agreement with Hunan Haili High & New Technology Industry Group Co.

The transaction has been approved at the 23rd meeting of the 9th board of directors of the company and still needs to be reviewed and approved by the company's general meeting of shareholders, approved by the Hunan Provincial State-owned Assets Supervision and Administration Commission and approved by the China Securities Regulatory Commission.