Board's Explanation on the Absence of Circumstances Under Article 11 of the Securities Issuance Registration Management Measures

The board of directors of Tianshui Huati Technology Co., Ltd. (hereinafter referred to as "the Company" or "the Listed Company") intends to acquire 100% of Huayi Microelectronics Co., Ltd. held by 27 counterparties, including Tianshui Huati Electronics Group Co., Ltd., Xi'an Houyi Investment Management Partnership (Limited Partnership), and Xi'an Xintianyu Platinum Enterprise Management Partnership (Limited Partnership), through the issuance of shares and cash payment, and to raise supporting funds (hereinafter referred to as "this transaction"). After careful analysis, the board believes that the Company does not fall under any of the prohibitive circumstances for issuing shares to specific objects as stipulated in Article 11 of the Securities Issuance Registration Management Measur