Special Explanation on the Issuance of Non-Standard Audit Report for the 2020 Financial Statements of Dongfang Wangli Technology Co., Ltd.

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This announcement provides a special explanation regarding the non-standard audit report issued for Dongfang Wangli's 2020 financial statements. The audit faced limitations due to historical issues, management changes, and lack of documentation, leading to an inability to obtain sufficient evidence for key financial figures. Consequently, the auditors could not express an opinion on the financial statements, indicating significant uncertainties affecting the company's financial position and results.

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Special Explanation on the Issuance of Non-Standard Audit Report

Index

Special Explanation

Contact Information

Beijing Dongcheng District Chaoyangmen North Street 8, Fu Hua Mansion, Block A, 9th Floor

Telephone: +86(010)6554 2288

Facsimile: +86(010)6554 7190

About the Audit

ShineWing Certified Public Accountants

9/F, Block A, Fu Hua Mansion, No. 8, Chaoyangmen Beijie, Dongcheng District, Beijing, 100027, P.R. China

Special Explanation

To all shareholders of Dongfang Wangli Technology Co., Ltd.:

We conducted an audit of the financial statements of Dongfang Wangli Technology Co., Ltd. (hereinafter referred to as "Dongfang Wangli" or "the Company") for the year 2020, including the consolidated and parent company balance sheets as of December 31, 2020, the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in equity, and related financial statement notes. On June 28, 2022, we issued audit report No. XYZH/2022CDAA20396 with a disclaimer of opinion.

According to the requirements of the China Securities Regulatory Commission's "Rules for the Disclosure of Information by Companies Issuing Securities to the Public No. 14 - Non-Standard Unqualified Audit Opinions and Their Treatment," we provide the following explanation regarding the issuance of the aforementioned disclaimer of opinion:

Basis and Reasons for Issuing a Disclaimer of Opinion

(1) Opening Balances

We performed corresponding audit procedures on the opening balances. Due to historical reasons, changes in management, the departure of key personnel, and the internal control situation of financial reporting, we were unable to obtain sufficient and appropriate audit evidence to determine whether the opening balances had a significant impact on the financial information for the year. We could not assess whether the prior errors necessitating retrospective restatement of the opening balances were complete, nor could we determine the extent of the impact of the aforementioned situations on the opening balances and comparative data from the previous period.

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