Announcement by Hongda Xingye Co., Ltd. on Court's Decision to Accept Subsidiary's Bankruptcy Reorganization and Appoint Administrator

Announcement by Hongda Xingye Co., Ltd. on Court's Decision to Accept Subsidiary's Bankruptcy Reorganization and Appoint Administrator

The company and all members of the board guarantee that the content of this information disclosure is true, accurate, and complete, without false records, misleading statements, or significant omissions.

Special Reminder:

1. Hongda Xingye Co., Ltd. (hereinafter referred to as "the Company") subsidiary Inner Mongolia Zhonggu Mining Co., Ltd. (hereinafter referred to as "Zhonggu Mining", a wholly-owned subsidiary of Inner Mongolia Wuhai Chemical Co., Ltd.) received a "Notice" and a bankruptcy reorganization application from Inner Mongolia Xinzongjia Mining Co., Ltd. (hereinafter referred to as "Xinzongjia") on December 22, 2023, from the Ordos Intermediate People's Court (hereinafter referred to as "Ordos Court"). The applicant, Xinzongjia, applied for the bankruptcy reorganization of Zhonggu Mining on the grounds that Zhonggu Mining is unable to repay its due debts, has insufficient assets to cover all debts, and is clearly lacking in repayment capability, but has reorganization value and feasibility. For details, please refer to the Company's announcement "Hongda Xingye Co., Ltd. on the Bankruptcy Reorganization Application of Subsidiary Inner Mongolia Zhonggu Mining Co., Ltd., Bankruptcy Liquidation Application of Inner Mongolia Zhongke Equipment Co., Ltd., and Bankruptcy Liquidation Application of Western Environmental Protection Co., Ltd." (Announcement No. 2023-068).

2. Zhonggu Mining received a "Civil Ruling" [2024] Nei 03 Po Shen 1 from the Wuhai Intermediate People's Court (hereinafter referred to as "Wuhai Court") on March 15, 2024. According to this document, the Ordos Court accepted the bankruptcy reorganization application from Xinzongjia on January 11, 2024, and requested the Inner Mongolia Autonomous Region High People's Court for jurisdictional matters regarding the case. On January 31, 2024, the Inner Mongolia Autonomous Region High People's Court issued a reply [2024] Nei Min Xian 5, agreeing to transfer the case to Wuhai Court for centralized jurisdiction and coordination of the bankruptcy reorganization cases of Inner Mongolia Wuhai Chemical Co., Ltd. and Inner Mongolia Zhonggu Mining Co., Ltd. Inner Mongolia Wuhai Chemical Co., Ltd. is the legal shareholder holding 100% equity of Zhonggu Mining and is an affiliated enterprise. According to Articles 13 and 22, Paragraph 1 of the Enterprise Bankruptcy Law of the People's Republic of China, and Articles 19, 27 of the Supreme Court's Provisions on the Designation of Administrators in Bankruptcy Cases, and Article 38 of the National Court Bankruptcy Trial Work Conference Summary, Inner Mongolia Wuhai Chemical Co., Ltd. has designated an administrator to coordinate debt repayment resources, reduce creditors' procedural costs, fairly protect creditors' interests, and fully leverage the industrial synergy of the two companies. Wuhai Court appointed a liquidation team consisting of officials from various departments to serve as the administrator for Inner Mongolia Zhonggu Mining Co., Ltd. The head of the administrator is Lawyer Liu Kai from Beijing Zhide (Shanghai) Law Firm. The Company will closely monitor the subsequent developments of this matter and fulfill its information disclosure obligations in a timely manner, urging investors to pay attention to investment risks.