*St Gaosheng (000971): Partial Cancellation Of Compensation Shares Involved In Restructuring Project Is Completed

Stock Code: 000971 stock abbreviation: * ST Gaosheng Announcement No.: 2021-08

Announcement of Gaosheng Holding Co., Ltd. on the completion of cancellation of compensation shares in major asset restructuring projects

The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and there are no false records, misleading statements or major omissions.

Special tips:

1. Gaosheng Holding Co., Ltd. (hereinafter referred to as "the company") cancelled 6717799 shares to be compensated by Wang Yu, the former shareholder of Shanghai yingyue Network Technology Co., Ltd., which accounted for 0.64% of the total share capital of the company before the repurchase, and the total repurchase price was 1 yuan.

2. The repurchased shares have been cancelled in Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. on March 4, 2021. After the cancellation of this repurchase, the total share capital of the company was changed to 1048590126 shares.

1、 Repurchase of shares to be compensated

（1） Basic information of major asset restructuring

On July 14, 2016, China Securities Regulatory Commission issued the reply on approving Gaosheng Holding Co., Ltd. to issue shares to purchase assets and raise matching funds from Yuan Jianing and others (zjxk [2016] No. 1613), which approved the company to issue 16598569 shares to Yuan Jianing and 16598 to Wang Yu, 569 shares purchased 100% equity of Shanghai yingyue Network Technology Co., Ltd. (hereinafter referred to as "Shanghai yingyue").

The company's 2017 annual equity distribution plan takes the current total share capital of 510817668 shares as the base, and transfers 10 shares per 10 shares to all shareholders with capital accumulation fund. After the capital accumulation fund was converted to share capital, the amount obtained by the commitment parties yuan Jianing and Wang Yu was adjusted to be held by each person

33197138 shares were issued and the share price was adjusted to 9.79 yuan / share.

（2） Performance commitment and completion

The counterparties yuan Jianing and Wang Yu promised that the net profits attributable to the owners of Shanghai yingyue after deducting non recurring profits and losses were no less than RMB 60 million, RMB 70 million, RMB 90 million and RMB 111 million in 2016, 2017, 2018 and 2019 respectively.

Shanghai yingyue's net profit attributable to the owners of the parent company after deducting non recurring profit and loss in 2016 and 2017 were 63.1667 million yuan and 70.6078 million yuan respectively, both of which have completed the performance.

According to Zhonghuan Zhuangzi (2019) No. 010889 special audit report on the achievement of performance commitment of Shanghai yingyue Network Technology Co., Ltd. issued by zhongaudit Zhonghuan Certified Public Accountants (special general partnership), the net profit attributable to the owner of the parent company after deducting the non recurring profit and loss in 2018 was RMB 24.4362 million, and the profit of performance commitment was not fulfilled.

According to the special audit report on the achievement of performance commitment of Shanghai yingyue Network Technology Co., Ltd. (Yahui AHZ (2020) No. 0025) issued by Asia Pacific (Group) accounting firm (special general partnership), the net profit of Shanghai yingyue Network Technology Co., Ltd. after deducting non recurring profit and loss in 2019 is 18.0982 million yuan, and the profit of outstanding performance commitment is not fulfilled.

（3） Compensation agreement and number of shares to be compensated

According to the "agreement on profit forecast and compensation for issuing shares and paying cash to purchase assets" signed by the company and the counterparties yuan Jianing and Wang Yu and the relevant supplementary agreements, and according to the special audit report issued by the accounting firm designated by the listed company, if the actual net profit of the target company fails to reach the committed net profit at the end of each accounting year in the commitment period, it will be listed The company shall, within ten days from the date of disclosure of the annual report of the year, inform the compensating Party in writing that the actual net profit (cumulative amount) of the target company in the year is less than the committed net profit (accumulated amount)

And the number of shares to be compensated. The insufficient part shall be compensated by cash compensation.

In 2018, Yuan Jianing and Wang Yu, the former shareholders of Shanghai yingyue, should compensate 21928087 shares of the company. In 2018, Yuan Jianing compensated 1197138 shares and Wang Yu compensated 20730949 shares. The repurchase and cancellation procedures of the performance compensation shares have been completed. For details, please refer to the announcement on the completion of cancellation of compensation shares involved in major asset restructuring projects (Announcement No.: 2019-90) issued by the company in the designated information disclosure media.

In 2019, the number of shares to be compensated by Yuan Jianing and Wang Yu, the former shareholders of Shanghai yingyue = (the accumulated amount of net profit committed by the target company at the end of the current period of each measurement period - the accumulated actual net profit of the subject company at the end of the current period of each measurement period) × the sum of the committed net profits of each year within the performance commitment period of the subject company × the total price of the underlying assets × this asset purchase The number of compensated shares = [331 million yuan - (63.1667 million yuan + 70.6078 million yuan + 24.4362 million yuan + 18.0982 million yuan)] / 33.1 million yuan × 115 million yuan ／ 9.79 yuan / share - 21928087 shares = 32969408 shares. According to the above commitment, Wang Yu compensated 6717799 shares, and Yuan Jianing should compensate 26251609 shares. As the shares of Yuan Jianing are still in the state of pledge and have not gone through the procedures of removing the pledge, so far, the procedures for repurchase and cancellation of the shares to be compensated have not been handled.

2、 Relevant approval procedures for this repurchase

At the 43rd meeting of the 9th board of directors, the 17th meeting of the 9th board of supervisors and the 2019 annual general meeting of shareholders held on April 27, 2020 and June 30, 2020, the company deliberated and passed the proposal on repurchase and cancellation of corresponding compensation shares of Shanghai yingyue Network Technology Co., Ltd. for details, please refer to the company's designated information disclosure Announcement of relevant resolutions on the website (Announcement No.: 2020-26, 2020-27, 2020-56).

On July 8, 2020, the company disclosed the report on the major asset restructuring project involving

The creditor's notice and capital reduction announcement on the purchase and cancellation of corresponding compensation shares (Announcement No.: 2020-59) announced that the company's repurchase and cancellation of performance compensation shares would lead to the decrease of the company's registered capital.

3、 Changes in the share capital structure after the completion of the repurchase

Unit: Share

Note: the data in the table shall be subject to the registration of Shenzhen Branch of China securities registration and Clearing Co., Ltd.

4、 Completion of repurchase and cancellation of performance compensation shares

As of the disclosure date of this announcement, the company has gone through the procedures of repurchase and cancellation of 6717799 compensation shares involved in the above major asset restructuring, and completed the cancellation procedures in Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. At the same time, the company will urge the relevant compensation obligors to complete the repurchase and cancellation of the remaining 26251609 shares as soon as possible.

5、 Impact of this repurchase cancellation and subsequent arrangements

After the completion of this repurchase and cancellation, the total number of shares of the company is changed to 1048590126 shares, and the controlling shareholders and actual controllers of the company have not changed. The company will timely change the registered capital, amend the articles of association, and go through the industrial and commercial change registration and filing procedures. After the completion of this repurchase and cancellation, the company's equity distribution does not meet the requirements of listing conditions. This repurchase will not have a significant impact on the company's operation, finance and future development.

It is hereby announced.

Board of directors of Gaosheng Holding Co., Ltd

March 8, 2012