Earth Bear plans to cancel two subsidiaries: Earth Bear Tianjin Co., Ltd. And Hefei Magnetic Application, respectively.

On October 30, Earth Bear issued a notice on the cancellation of subsidiaries, saying that on October 29, 2021, the 20th meeting of the sixth board of directors of Anhui Daixiong New Materials Co., Ltd. (hereinafter referred to as "the company") examined and adopted the "Bill on cancellation of subsidiaries." Agree with the company to cancel Tianjin Earth Bear Mechanical and Electrical Co., Ltd. (hereinafter referred to as "Earth Bear Tianjin Company") and Hefei Earth Bear Magnetic Application Technology Co., Ltd. (hereinafter referred to as "Hefei Magnetic Application"), and authorize the management to handle the cancellation. In accordance with the provisions of the Company Law of the people's Republic of China, the articles of Association, the Company Investment Management system and other relevant laws and regulations, the cancellation of subsidiaries is within the decision-making authority of the board of directors and does not need to be submitted to the shareholders' general meeting for consideration.

It is reported that as of September 30, 2021, Tianjin Earth Bear Mechanical and Electrical Co., Ltd. had total assets of 10879619.07 yuan, net assets of 10026079.58 yuan and net profit of 202883.48 yuan. The above financial data have not been audited. The company's main business is wholesale and retail of electronic magnetic devices; technology development, consulting, service and transfer of electronic magnetic devices; import and export business; self-owned housing rental; lower branch business: processing and manufacturing of electronic magnetic devices.

Hefei Daixiong Magnetic Application Technology Co., Ltd. as of September 30, 2021, Hefei Magnetic Application has a total asset of 18211525.82 yuan, a net asset of 6012401.97 yuan and a net profit of 120087.97 yuan. The above financial data have not been audited. The company's main business is magnetic materials and their application products, other electronic materials research and development, production, sales and technical consultation, technical services.

Earth Bear said that the business income of Earth Bear Tianjin Company and Hefei Magnetic Application accounted for a very small proportion of the company's total business income in recent years, and the company was based on the overall development plan and business plan, according to strategic positioning and actual operating needs, in order to further optimize the management of subsidiaries, reduce management costs and improve operational efficiency, it is proposed to cancel the wholly-owned subsidiary Dadi Bear Tianjin Company and Hefei Magnetic Application.

In addition, Earth Bear pointed out that after the cancellation of Earth Bear Tianjin Company and Hefei Magnetic Application, it will no longer be included in the scope of the company's consolidated statements, and the scope of the company's consolidated statements will change accordingly, but it will not have a material impact on the company's consolidated statements. Earth Bear Tianjin Company and Hefei Magnetic Application Business account for a very small proportion, which will not adversely affect the overall business development and sustainable profitability of the company, nor will it harm the interests of the company, shareholders, especially minority shareholders.