I. Overview of Guarantees and Related-Party Transactions
Shenzhen Lihexing Co., Ltd. (hereinafter "the Company" or "Lihexing") convened the 18th meeting of the 4th Board of Directors on April 24, 2026, and the 2025 Annual General Meeting on May 18, 2026. These meetings approved the "Proposal on the Estimated Financing Quotas and Guarantee Quotas for 2026 for Applications to Financial Institutions" and the "Proposal on the Provision of Guarantees by Controlling Shareholders and Actual Controllers for the Company and its Subsidiaries for 2026 Financing Quotas and Related-Party Transactions." The Company and its subsidiaries are authorized to apply for a total comprehensive financing quota not exceeding 2 billion RMB from banks and non-bank financial institutions. The Company and its subsidiaries will provide guarantees including, but not limited to, guarantees, mortgages, and pledges for debts incurred under these financing arrangements. The total guarantee amount is expected not to exceed 2 billion RMB. Controlling shareholders and actual controllers, Mr. Lin Yipan and Ms. Huang Yueming, have agreed to provide related-party guarantees for these financing matters free of charge.
The validity period for the use of the aforementioned financing and guarantee quotas is from the date of approval by the 2025 Annual General Meeting until the date of the 2026 Annual General Meeting, and may be used on a revolving basis within the validity period. Specific financing and guarantee amounts, methods, and forms shall be subject to the final agreements or contracts signed with financial institutions. Individual financing and guarantee matters within these quotas will not be submitted separately for board or shareholder approval.
II. Overview of Accounts Receivable Factoring Business
Recently, the Company's controlled subsidiary, Lirong Electronics (Jiangmen) Co., Ltd. (hereinafter "Lirong Electronics"), signed a "Factoring Business Contract" with Shenzhen SME Credit Guarantee Commercial Factoring Co., Ltd. (hereinafter "SME Factoring Company"). Lirong Electronics applied for factoring financing, agreeing to transfer accounts receivable under the basic transaction contract between Lirong Electronics and the buyer to the SME Factoring Company. The amount of this factoring financing is 30 million RMB, with a validity period of 12 months.