Wang Xiaowei proposed to acquire 51% stake in Wuhan Zhongruan Technology Co., Ltd. from Shandong Swan CottonIndustrial Machinery Stock Co.,Ltd. (SHSE:603029) for approximately CNY 170 million on October 29, 2020. Wang Xiaowei should pay the equity repurchase in four installments. The first transfer payment CNY 94.1 million (the previous payment of CNY 5 million as a deposit and the company's previous unpaid equity transfer payment of CNY 40.8 million shall be used to offset the first transfer payment) shall be paid within 5 days after the repurchase agreement takes effect. The second phase of transfer payment of CNY 29.3 million should be paid by December 31, 2020 after the completion of the equity transfer; the third phase of transfer payment CNY 10.7 million should be paid by March 31, 2021, the fourth phase of transfer payment of CNY 40 million should be paid before the November 30, 2021. As of December 31, 2020, after Wang Xiaowei paid the first transfer payment of CNY 94.1 million and paid the liquidated damages of CNY 0.25 million for the delayed payment of the first phase transfer payment. As of October 12, 2021, Wang Xiaowei paid CNY 1.5 million for the second phase of equity transfer to the company, but failed to pay the second phase of equity transfer within the agreed time limit. Wang Xiaowei has not paid a total of CNY RMB 78.5 million for the remaining equity transfer yet. The company has urged Wang Xiaowei to pay the remaining equity transfer payment as soon as possible, but if he has not fulfilled the payment obligation or the main collateral has a major adverse situation, the remaining equity transfer payment may be uncollectible. The above matters have been reviewed and approved by the company's third extraordinary general meeting of shareholders in 2020. The Board of Directors of Shandong Swan CottonIndustrial Machinery Stock Co.,Ltd. approved the transaction.