Baotailong plans to increase its capital by RMB 45 million to Shanghai Chaosheng Company

On February 9, Baotailong issued an announcement stating that the company plans to increase its capital by RMB 45 million to its wholly-owned subsidiary Shanghai Chaosheng Technology Co., Ltd. (hereinafter referred to as "Shanghai Chaosheng Company"). After the capital increase is completed, the registered capital will increase from RMB 5 million to RMB 50 million.

It is understood that in order to accelerate the industrialization process of graphene applications, Baotailong invested in the establishment of Shanghai Chaosheng Company on January 18, 2021. On June 2, 2021, Shanghai Chaosheng Company integrated the technology, market and other team resources in the field of thermal conductive films to initiate the establishment of Xingtu (Changzhou) Carbon Materials Co., Ltd. (hereinafter referred to as "Xingtu Company"), which is committed to the application research and development, production and sales of carbon material-related thermal management. The registered capital of Xingtu Company is 30 million yuan, and Shanghai Chaosheng Company ultimately holds 49% of the company's registered capital.

After its establishment, Xingtu Company has continued to promote the industrialization of graphene thermal conductive film, and has successively passed the preliminary verification and factory certification of graphene thermal conductive film products of Shanghai Longqi Technology Co., Ltd. (hereinafter referred to as "Shanghai Longqi"). Recently, Shanghai Longqi has further proposed to Xingtu Company a product adaptability verification requirement of 100 pcs of graphene thermal conductive film, which is intended to be used for the testing and verification of Huawei's related products.

Baotailong stated that in order to accelerate the industrialization of the graphene thermal conductive film project and adapt to the company's strategic transformation to the new energy and new materials industries, the company plans to position Shanghai Chaosheng Company as the company's business expansion platform, resource integration platform and external cooperation platform for entering the new energy and new materials industries, and complete the full ownership of Shanghai Chaosheng Company on January 29, 2022. At the same time, after consultation with relevant parties, the company intends to complete the control of Xingtu Company through Shanghai Chaosheng Company's acquisition of 16.86% of the shares of other shareholders of Xingtu Company. After the acquisition is completed, Shanghai Chaosheng Company's investment in Xingtu Company will be 19.7582 million yuan, accounting for 65.86% of Xingtu Company's registered capital, and Xingtu Company will become the company's holding subsidiary.

At the same time, he also stated frankly that in order to speed up the implementation of the above matters and promote the company's transformation strategy, the company plans to increase the capital of Shanghai Chaosheng Company by RMB 45 million. After the capital increase is completed, the registered capital of Shanghai Chaosheng Company will be RMB 50 million, and the company will account for 100% of the registered capital.

Regarding the purpose of this capital increase, Baotailong stated that the company's capital increase in Shanghai Chaosheng Company will, on the one hand, be used to increase investment in Xingtu Company, accelerate the development of the downstream market for the industrialization and application of new graphene materials, and promote the development of the company's graphene industry; on the other hand, by positioning Shanghai Chaosheng Company as the company's new energy and new materials industry business expansion platform, it will promote the company to accelerate its strategic transformation to the new energy and new materials industry.