Announcement on Major Litigation

Palm Eco-Town Development Co., Ltd.

Announcement on Major Litigation

The Company and the Board of Directors guarantee the truthfulness, accuracy, and completeness of the information disclosed herein, and that there are no false records, misleading statements, or material omissions.

Special Notes:

1. Litigation Stage: The case has been accepted and filed by the court.

2. Company's Party Status: Co-defendant.

3. Amount Involved: RMB 321,939,920.36, which accounts for 76.49% of the company's net assets as of the most recent audited period (2025).

4. Impact on Company's Profit and Loss: This case has not yet been heard in court, and its impact on the company's current and future profits is uncertain. This litigation is mainly due to the company providing a top-up obligation for a third party. If the guarantor (Defendant 1) ultimately fails to fulfill its repayment obligations, the company may need to bear the top-up responsibility.

I. Overview

Palm Eco-Town Development Co., Ltd. (hereinafter referred to as "Palm Shares" or "the Company," Defendant 2) received the "Civil Complaint" and other documents served by the Intermediate People's Court of Changsha City, Hunan Province on August 4, 2026 (Case No.: (2026) Xiang 01 Min Chu No. 813). It was learned that Shanghai International Trust Co., Ltd. (hereinafter referred to as "Shanghai Trust" or "Plaintiff") has sued the Company and Jishou City Zongji Engineering Construction Project Management Co., Ltd. (hereinafter referred to as "Jishou Zongji" or "Defendant 1") to the Intermediate People's Court of Changsha City, Hunan Province, due to a loan contract dispute.

II. Details of the Litigation Matter

(I) Parties to the Litigation

Plaintiff: Shanghai International Trust Co., Ltd.

Defendant 1: Jishou City Zongji Engineering Construction Project Management Co., Ltd.

Defendant 2: Palm Eco-Town Development Co., Ltd.

(II) Key Contents of the Complaint

1. Trust Loan Contract and Supplementary Agreements Signed Between Shanghai Trust and Jishou Zongji

Jishou Zongji applied to Shanghai Trust for a trust loan totaling RMB 435 million. On August 22, 2017, the parties signed the "Shangxin Jishou Zongji Single Fund Trust Loan Contract" with a loan amount of RMB 350 million and subsequent supplementary agreements. On February 7, 2018, they signed the "Shangxin Jishou Zongji Single Fund Trust Loan Contract" with a loan amount of RMB 85 million and subsequent supplementary agreements. The trust loan was used for the construction of the "Jishou City Creation of National and Provincial Garden City, Garden Greening Construction Phase II PPP Project."

1. "Top-up Agreement" and Supplementary Agreements Signed Between Shanghai Trust and Palm Shares

On August 24, 2017, and February 7, 2018, Palm Shares, Shanghai Trust, and an external party, Shanghai Pudong Development Bank Co., Ltd. Changsha Branch (hereinafter referred to as "SPD Bank Changsha Branch"), signed the "Top-up Agreement" and subsequent supplementary agreements, stipulating that:

(1) If Shanghai Trust fails to receive the principal and interest of the loan under the "Loan Contract" in full and on time, Palm Shares shall unconditionally provide the top-up according to Shanghai Trust's written notice.

(2) The scope of claims for which Palm Shares assumes the top-up responsibility includes the principal, financing interest, penalty interest, late fees, compensation for damages, all costs incurred to realize the principal debt (including collection fees, litigation fees, arbitration fees, property preservation fees, travel expenses, execution fees, appraisal fees, delivery fees, announcement fees, lawyer fees, etc.).