Desay Battery subsidiary intends to bid for 100% equity of Changsha Xinchu Technology Co., Ltd.

On January 20, 2022, Shenzhen Desay Battery Technology Co., Ltd. (hereinafter referred to as the "Company") signed the "Desay Battery Energy Storage Cell Project Park Entry Agreement" (hereinafter referred to as the "Park Entry Agreement") with the Management Committee of Wangcheng Economic and Technological Development Zone. The agreement stipulates that in order to reduce the company's initial investment and support the rapid implementation of the project, the Management Committee of Wangcheng Economic and Technological Development Zone will establish a platform company (the actual registered name is "Changsha Xinchu Technology Co., Ltd.", hereinafter referred to as "Changsha Xinchu" or "the target company") to be responsible for the delisting and construction of the first phase of the project. The state-owned land use rights and the construction part of the first phase of the project will be repurchased by the company in one lump sum within 5 years after the completion and delivery to the company. For details, please see the "Announcement on the Signing of the Energy Storage Cell Project Park Entry Agreement" issued by the company on January 21, 2022.

In order to implement the provisions of the "Park Entry Agreement", the holding subsidiary Hunan Desay Battery Co., Ltd. (hereinafter referred to as "Hunan Battery") intends to raise funds on its own to participate in the bidding for 100% of the equity of Changsha Xinchu Technology Co., Ltd. (hereinafter referred to as the "target assets"), with a listing price of RMB 536.2225 million and a transaction deposit of RMB 160.8600 million.