Announcement of Shentiandi Cumulative Litigation and Arbitration Cases

On July 5, Shenzhen Tiandi Group Co., Ltd. issued a notice on the cumulative litigation and arbitration cases.

The announcement shows that the company has recently been affected by adverse factors such as declining demand in downstream industries and excessive competition in the market, which has increased the difficulty of industry operation and increased the pressure of capital turnover. The company generally uses the project as the settlement unit to pay for the materials of upstream suppliers. In recent years, due to the tight capital flow in the industrial chain, some downstream customers of the company failed to pay for the goods in accordance with the contract, resulting in a corresponding extension of the time limit for the company to pay for the materials of suppliers. Due to the new litigation and arbitration matters, lawyers and related litigation costs need to be paid, which will lead to an increase in the company's management costs. Some bank accounts of the company, its holding subsidiaries and Sun companies have been frozen by the judiciary due to litigation and arbitration of economic disputes, and some assets have been frozen, sealed up and auctioned. Some bank accounts and assets of the company were frozen due to the property preservation measures taken by the plaintiff in litigation/arbitration. With the settlement of litigation and arbitration matters caused by economic disputes, this part of bank accounts and assets can be unfrozen and restored to normal use. The company has taken relevant measures to ensure the operation of daily production and operation activities. The total amount involved in the prosecution cases of the

company, its holding subsidiaries and Sun Company is RMB 18.4492 million (including the amount of compensation claimed by the plaintiff, liquidated damages, attorney fees and other expenses), accounting for 100% of the total amount.