Corun expands energy storage and new energy vehicle markets

Hunan Corun New Energy Co., Ltd. (hereinafter referred to as the "Company") is implementing strategic adjustments, returning to the main battery business, focusing on the layout of nickel-hydrogen, lithium batteries, other batteries and materials and other industries, and at the same time introducing strategic investors for the hybrid assembly system business of the Company's subsidiary Corun Hybrid Power Technology Co., Ltd. (hereinafter referred to as the "CHS Company") to jointly help it develop independently; the counterparties Zhang Qiangjin, Zhang Min, and Jiangxi Yifeng County Tongan Mineral Products Development Co., Ltd. (hereinafter referred to as "Jiangxi Tongan") intend to jointly transform Jiangxi Dingsheng New Materials Technology Co., Ltd. (hereinafter referred to as the "Target Company") into a high-tech enterprise integrating lithium mines, lithium battery materials, hybrid power and hybrid energy storage technology. According to the strategic adjustment direction, business development needs and resource synergy value of the parties to the cooperation, the parties intend to sign the "Capital Increase Subscription Intention Agreement" (hereinafter referred to as the "Agreement") to jointly help the target company achieve its strategic transformation goals and jointly expand the energy storage market and the energy-saving and new energy vehicle market.

Main cooperation content

Jiangxi Tongan intends to increase the capital of the target company with the equity of its subsidiary held by it, the original shareholders of the target company intend to use other assets or cash, and CHS intends to use its related technical assets. After the capital increase is completed, the three counterparties will hold approximately 70% of the equity of the target company in total, and CHS will hold approximately 30% of the equity of the target company. The specific capital increase arrangements are as follows:

1. Jiangxi Tongan intends to increase the capital of the target company with its 70% equity interest in Yifeng County Donglian Mineral Products Development Co., Ltd. The capital contribution will be based on the appraisal value, and the remaining part will be subscribed by the three counterparties in the form of assets or cash.

2. CHS Company intends to increase the capital of the target company by investing its legally and completely owned ownership of hybrid system-related technology (hereinafter referred to as "CHS Technology"). The valuation of the investment will be based on the valuation conducted by the appraisal agency, but shall not be lower than the book value of the relevant assets as of December 31, 2021, the valuation base date, which is RMB 1.12 billion.