Report to All Shareholders Regarding Cheng Liquan and Zhang Lu's Acquisition of All Shares of the Company's Controlling Shareholder

Company Name

Bit Technology Holdings Co., Ltd.

Company Address

99 Qinjian Road, Shanghai

Report Signing Date

May 28, 2004

Contact Information

• Company Contact Address: Room 1702-05, Wisdom Plaza, 488 Wuning South Road, Shanghai
• Contact Person: Huang Yawen
• Phone Number: 021-52987625
• Acquirers: Cheng Liquan, Zhang Lu
• Acquirers' Phone Number: 021-52987163
• Board Report Signing Date: May 28, 2004

Board Statement

1. All directors of the company believe that this report does not contain any false records, misleading statements, or major omissions, and they bear individual and joint responsibility for the truthfulness, accuracy, and completeness of its content.
2. All directors have fulfilled their duty of good faith, and the recommendations made to shareholders are based on the overall interests of the company and all shareholders, made objectively and prudently.
3. All directors have no conflicts of interest related to this acquisition; any relevant directors have recused themselves.

Table of Contents

1. Definitions
2. Company Overview
3. Conflicts of Interest
4. Board Recommendations
5. Major Contracts and Transactions
6. Board Statement
7. Documents for Inspection

Section 1: Definitions

In this board report, unless otherwise specified, the following abbreviations are defined as follows:

• This Acquisition: Refers to Cheng Liquan and Zhang Lu acquiring 100% of Ningbo Huaneng Leasing Co., Ltd. to indirectly gain actual control of Bit Technology Holdings Co., Ltd.
• Agreement Transfer: Refers to the transferee acquiring 100% equity of Ningbo Huaneng Leasing Co., Ltd. through signing the "Shareholder Transfer Agreement" with the transferor, Shanghai Yingke Asset Management Co., Ltd. and Shanghai Chuangli Investment Management Co., Ltd.
• Transferee or Acquirer: Refers to Cheng Liquan and Zhang Lu.
• Transferor, Original Actual Controller: Refers to Shanghai Yingke Asset Management Co., Ltd. and Shanghai Chuangli Investment Management Co., Ltd.
• Ningbo Huaneng: Refers to Ningbo Huaneng Leasing Co., Ltd.
• *The Company, Company, or ST Bit: Refers to Bit Technology Holdings Co., Ltd.
• Company Board: Refers to the board of directors of Bit Technology Holdings Co., Ltd.
• CSRC: Refers to the China Securities Regulatory Commission.
• Audit Institution: Refers to Shanghai Lixin Changjiang Certified Public Accountants Co., Ltd.
• Acquisition Report: Refers to the "Acquisition Report of Bit Technology Holdings Co., Ltd."

Section 2: Company Overview

1. Company Overview

1. Company Name: Bit Technology Holdings Co., Ltd.
2. Stock Listing Location: Shenzhen Stock Exchange
3. Stock Abbreviation: *ST Bit
4. Stock Code: 000621
5. Registered Address: 99 Qinjian Road, Shanghai
6. Office Address: Room 1702-05, Wisdom Plaza, 488 Wuning South Road, Shanghai
7. Contact Person: Mao Cibo
8. Phone Number: 021-52987625

2. Financial Condition

The company primarily engages in the development, production, and sales of electronic application software products, power information network system integration, digital transformation of cable TV networks, and media cultural industries. In the past three years, the company's business revenue has drastically shrunk, and performance has significantly declined year by year. Key accounting data and financial indicators are as follows:

The above key accounting data and financial indicators are extracted from the company's annual reports. The company's most recent three annual reports were published on June 1, 2002, July 1, 2003, and April 27, 2004, in the "China Securities Journal."