CHIHO ENV(00976): The company's operations and management are stable and normal. Potential changes to the company's equity and board composition are still uncertain.

CHIHO ENV (00976) announced that the board of directors hereby provides the latest news to the company's shareholders and potential investors. On November 4, 2024, board members received an email from a sender claiming to be the administrator, along with a notice (administrator's notice) informing the board members that: Longxin Reorganization Company and investors have signed a reorganization investment agreement, whereby the investors agree to purchase certain assets from Longxin Reorganization Company, including 477 million shares of the company's common stock (ordinary shares, representing approximately 29.72% of the company's issued share capital as of the date of this announcement); The administrator will change the composition of the board of directors; and the administrator plans to complete the proposed changes in the company's equity and board composition by the end of this year. As disclosed in the announcement on July 29th, Mr. Tu Jianhua expressed serious concerns about the legality and effectiveness of the administrator's actions, which deviate significantly from the court-approved reorganization plan. Mr. Tu Jianhua has filed a lawsuit against the administrator on behalf of Chongqing Fifth Intermediate People's Court, questioning the validity of the reorganization investment agreement entered into by the administrator on behalf of Longxin Reorganization Company by assuming the rights of Longxin Reorganization Company shareholders (China lawsuit). The board has learned that a minority shareholder of Chongqing Commerce Investment Group Co., Ltd. (China Chongqing) (which is one of the Longxin Reorganization Company and the sole shareholder of Chongqing Commerce Investment Group (Hong Kong) Co., Ltd. (Chongqing Commerce Hong Kong)) has initiated legal actions in mainland China and Hong Kong regarding the reorganization (minority shareholder legal action): (1) On November 11, 2024, the minority shareholder formally applied to the Chongqing Provincial People's Procuratorate Fifth Branch (Procuratorate) to supervise the implementation of the reorganization plan by the Chongqing Fifth Intermediate People's Court bankruptcy court, Mr. Tu Jianhua, and the administrator, and requested the Procuratorate to transfer the case to the public security criminal investigation. The minority shareholder claimed that the reorganization did not follow the court-approved reorganization plan and severely deprived minority shareholders of rights (2) On November 15, 2024, the minority shareholder submitted a summons order (HCA 2024 No. 2276) to the High Court of the Hong Kong Special Administrative Region, agreeing to claim against the investors and the administrator (referred to as "defendants"). The minority shareholders represent themselves and all other shareholders of China Chongqing and Chongqing Commerce Hong Kong in lawsuits and claims against the defendants, including (i) declaring that the share transfer was executed without proper authorization and/or violated trust obligations, and/or facilitated by deception and/or fraudulent misrepresentation, and therefore invalid; and (ii) the injunction prohibiting investors from selling, transferring, pledging, or otherwise disposing of ordinary shares and exercising any voting rights attached to the ordinary shares. To avoid doubt, the company is not a party to the China lawsuit or the minority shareholders' legal actions. In view of the China lawsuit and the minority shareholders' legal actions, it is uncertain whether the proposed changes in the company's equity and/or board composition will continue. Since the notice provided by the administrator did not provide any details on the proposed changes in the board composition or identify any potential candidates for the board members, it is also uncertain whether the so-called board composition changes (if carried out) will have a significant adverse impact on the company's operations and business. As of the date of this announcement, the company's operations and management are stable and normal.