I. Overview of the Related Party Transaction
According to the company's strategic development plan, to meet the funding needs of Wuhan Huakang Century Clean Technology Co., Ltd. (hereinafter referred to as "Huakang Clean" or "the Company") and its subsidiaries (within the scope of consolidated financial statements), and to ensure the company's stable operation, the Company and its subsidiaries intend to apply to banks and other financial institutions for a comprehensive credit line not exceeding RMB 400 million (inclusive). The Company's controlling shareholders and actual controllers, Mr. Tan Pingtao and Ms. Hu Xiaoyan, intend to provide joint liability guarantees for the Company and its subsidiaries' application for the comprehensive credit line from banks, without providing counter-guarantees or paying guarantee fees. The credit scope mainly includes but is not limited to working capital loans, bank acceptance bills, guarantees, notes, opening international letters of credit, opening domestic letters of credit, and trade financing. The actual financing amount will depend on the Company's operational funding needs. Financing guarantees may include but are not limited to: guarantees from the Company's controlling shareholders and actual controllers, Mr. Tan Pingtao and Ms. Hu Xiaoyan, fixed asset mortgage guarantees, accounts receivable pledge guarantees, patent pledges, etc. The specific guarantee period for the above guarantees will be subject to the guarantee agreements signed with relevant banks. The application period for the above credit line is two years from the date of approval by the shareholders' meeting. During the credit period, the credit line can be reused, and the actual credit limits from various banks can be adjusted within the total limit. Individual financing amounts within the above credit line do not need to be reported to the board of directors or the shareholders' meeting for approval. The Company's board of directors proposes to authorize the chairman of the Company or their authorized representative to sign all legal documents related to the credit line, including contracts, agreements, and certificates, and to select banks based on cost and the credit status of each bank.