The Board announced that on December 13, 2023, Zhongguancun Science-Tech Leasing Co., Ltd. (the Company) (as the Lessor) entered into the Finance Lease Agreement V with the Lessee, pursuant to which, (i) the Lessor shall acquire the Leased Assets V owned by the Lessee at a transfer consideration of RMB 3,200,000; and (ii) the Lessor shall lease the Leased Assets V back to the Lessee for a term of 24 months with a total lease payment of RMB 3,497,305, which shall include a finance lease principal of RMB 3,200,000 and a finance lease interest income (inclusive of VAT) of RMB 297,305. Lessee: a limited company incorporated in the PRC, which is principally engaged in petroleum engineering technology development and services. The Leased Assets I are oil extraction equipment, with a net book value of approximately RMB 16,104,166.19.

The Leased Assets II are oil extraction equipment, with a net book value of approximately RMB 4,031,355.72. The Leased Assets III are oil extraction equipment, with a net book value of approximately RMB 9,056,080.83. The Leased Assets IV are oil extraction equipment, with a net book value of approximately RMB 6,322,232.26.

The Leased Assets V are oil extraction equipment, with a net book value of approximately RMB 5,852,138.60. The Lessee does not separately calculate the profits before and after tax of the Leased Assets. The transfer consideration for the acquisition of the Leased Assets under the Finance Lease Agreements will be funded by the Company's internal resources.

If the Lessee has properly and fully performed all of its obligations under the Finance Lease Agreements, the Lessee is entitled to acquire the Leased Assets at the consideration of RMB 100 in nominal value pursuant to the terms and conditions of the Finance Lease Agreements, upon the expiry of the Finance Lease Agreements respectively. The lease period of the Finance Lease Agreement I is 24 months, which commenced on March 15, 2023. The lease period of the Finance Lease Agreement II is 24 months, which commenced on April 25, 2023.

The lease period of the Finance Lease Agreement III is 24 months, which commenced on June 13, 2023. The lease period of the Finance Lease Agreement IV is 24 months, which commenced on September 12, 2023. The lease period of the Finance Lease Agreement V is 24 months, which shall commence on December 13, 2023.

Under the Finance Lease Agreements, the respective total lease payment of RMB 8,413,909, RMB 1,963,023, RMB 5,465,799, RMB 5,465,650 and RMB 3,497,305, included the respective finance lease principal of RMB 7,700,000, RMB 1,800,000, RMB 5,000,000, RMB 5,000,000 and RMB 3,200,000, and the respective finance lease interest income (inclusive of VAT) of RMB 713,909 (calculated based on the interest rate of 8% per annum), RMB 163,023 (calculated based on the interest rate of 8% per annum), RMB 465,799 (calculated based on the interest rate of 8% per annum), RMB 465,650 (calculated based on the interest rate of 8% per annum) and RMB 297,305 (calculated based on the interest rate of 8% per annum). The Lessee shall pay the lease payment to the Lessor at the end of each quarter in installments in accordance with the terms and conditions of the Finance Lease Agreements during the lease period. The terms of the Finance Lease Agreements, including the transfer consideration for the Leased Assets, finance lease principal, finance lease interest income and other expenses, were determined upon arm's length negotiation between the Lessee and the Lessor with reference to net book value of the Leased Assets and prevailing market prices of the same category of finance lease products in the PRC.

The Lessee agreed to pay the security deposit for the Finance Lease Agreements of RMB 462,000 (bearing nil interests), RMB 108,000 (bearing nil interests)), RMB 300,000 (bearing nil interests)), RMB 300,000 (bearing nil interests) and RMB 192,000 (bearing nil interests). When the last lease payments are due to be paid, the lease payment and other payables under the final payment will automatically be deducted from the deposit, and the Lessor will refund the Lessee the remaining amount (if any). The Company's principal activities are to provide finance leasing and advisory services to customers.

The entering of the Finance Lease Agreements is part of the Company's ordinary and usual course of business, which is expected to provide a stable revenue and cashflow to the Company. The Directors consider that entering into the Finance Lease Agreements will generate revenue and profit to the Company over the lease period and is consistent with the Company's business development strategy. Since the Finance Lease Agreements was entered into under normal commercial terms, the Directors are of the view that the terms under the Finance Lease Agreements are fair and reasonable and are in the interests of the Company and its shareholders as a whole.