600091: Baotou Tomorrow Technology Co.Ltd(600091) announcement on the reply to the inquiry letter of Shanghai Stock Exchange

Securities code: 600091 securities abbreviation: * ST Mingke Announcement No.: pro 2022-006 Baotou Tomorrow Technology Co.Ltd(600091)

Special notice on reply to inquiry letter of Shanghai Stock Exchange

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents. Important content tips:

Based on the custody agreement, Jinzhong Hongding Changhe Coal Industry Co., Ltd. included Heshun Shunxin coal washing Co., Ltd. into the scope of consolidated statements in 2021. The operating income generated belongs to the scope of operating income deduction standards and will be deducted, and the net profit generated belongs to non recurring profits and losses.

The company’s shares have been warned of delisting risk, If the financial and accounting report of 2021 contains item (I) of paragraph 1 of article 9.3.2 of the Listing Rules of Shanghai Stock Exchange (revised in January 2022), “the audited net profit of the latest fiscal year is negative and the operating income is less than RMB 100 million, or the net profit of the latest fiscal year after retroactive restatement is negative and the operating income is less than RMB 100 million” Under the specified circumstances, the company’s shares will face the risk of delisting. As of September 30, 2021, the company has realized an operating income of 5.5651 million yuan (excluding deductions) and a net profit loss of 31.5663 million yuan. The company’s financial and accounting report for 2020 has been issued and cannot express opinions.

On December 8, 2021, Baotou Tomorrow Technology Co.Ltd(600091) (hereinafter referred to as “the company” or “tomorrow technology”) received the inquiry letter on matters related to the signing of equity custody agreement by * ST Mingke (szgh [2021] No. 2967) (hereinafter referred to as “the inquiry letter”) issued by Shanghai stock exchange. The company replied to the questions raised in the inquiry letter on the basis of careful verification, It is hereby announced as follows:

1. According to the announcement, Zhai Hongbo entrusted his Shunxin coal washing to Hongding Changhe for management according to the agreement. The company established a wholly-owned subsidiary Shanxi Mengyuan Jieneng Coal Industry Co., Ltd. (hereinafter referred to as Mengyuan Jieneng) on November 25, 2021, and the registered place of Shunxin coal washing is Heshun County, Jinzhong City, Shanxi Province. The company is requested to make supplementary disclosure: (1) explain the business logic of the custody agreement signed this time, and whether there is any affiliated relationship or other interest arrangement; (2) Whether the custody agreement is related to the establishment of Mengyuan Jieneng in the early stage of the company, whether there are transactions between the companies and future arrangements; (3) Operation and financial status of Shunxin coal washing in recent three years; (4) After the custody agreement is signed, it will have a specific impact on the operation and finance of the listed company.

Reply: I. explain the business logic of the custody agreement signed this time, and whether there is any affiliated relationship or other interest arrangement

Heshun Shunxin coal washing Co., Ltd. (hereinafter referred to as “Shunxin coal washing” or “target company”) is located in Heshun County, Jinzhong City, Shanxi Province. With a registered capital of 20 million yuan, the company is mainly engaged in raw coal washing, beneficiation, processing and sales of coal products.

Zhai Hongbo, the controlling shareholder of Shunxin coal washing, believes that entrusting the equity of Shunxin coal washing to the subsidiaries of the listed company for management is based on the recognition of the business resources and operation experience of the listed company and the expectation of the future operation income of Shunxin coal washing. It is hoped that through this equity custody, Shunxin coal washing market development and business development capacity will be enhanced, so as to improve Shunxin coal washing profitability. The equity of Shunxin coal washing entrusted by the company this time is mainly based on: Shunxin coal washing is located in the east of Shanxi, with rich local coal resources, obvious advantages in the coal industry, and the company’s production equipment is in good condition, which meets the needs of the company’s business development.

After verification, the entrusting party and the target company have no affiliated relationship and other interest arrangements with the listed company and its related parties.

To sum up, the company believes that this trusteeship reflects the principles of both parties taking what they need and fair transaction, and is in line with the respective commercial purposes of both parties.

2、 Whether this custody agreement is related to the establishment of Mengyuan Jieneng in the early stage of the company, whether there are transactions between companies and future arrangements

On November 25, 2021, the company established a wholly-owned subsidiary Shanxi Mengyuan Jieneng Coal Industry Co., Ltd. (hereinafter referred to as “Mengyuan Jieneng”) in Heshun County, Jinzhong City, Shanxi Province. When handling the industrial and commercial establishment registration, due to the mistakes of the staff, the registered capital of “10 million yuan” was mistakenly registered as “100 million yuan”. After communicating with the local industrial and commercial department, the company will cancel the company and re establish a new company with a registered capital of “10 million yuan”. On this matter, the company disclosed the announcement on matters related to registered subsidiaries on November 26, 2021. For the cancellation of Mengyuan Jieneng, the company has submitted the Cancellation Application to the local industry and Commerce Department on November 26, 2021 and issued the application cancellation announcement. The subsequent company will handle it according to the requirements of the industry and Commerce Department.

On November 26, 2021, the company established a wholly-owned subsidiary, Jinzhong Hongding Changhe Coal Industry Co., Ltd. (hereinafter referred to as “Hongding Changhe”), with a registered capital of 10 million yuan. Business scope: coal washing and beneficiation; Sales of coal and products. (except for the items that must be approved according to law, the company shall independently carry out business activities according to law with its business license)

This custody agreement has nothing to do with Mengyuan Jieneng established in the early stage of the company. There is no transaction or future arrangement between Mengyuan Jieneng and Hongding Changhe and Shunxin coal washing companies.

3、 Operation and financial status of Shunxin coal washing in recent three years

Shunxin coal washing has a 16 ㎡ complete coal washing production line and all coal preparation production equipment, with a daily coal washing capacity of 4000 tons and coal preparation capacity of 2000 tons. The coal washing plant adopts jigging and washing production process, with an approved capacity of 1.8 million tons / year and a design capacity of 1.5 million tons / year of raw coal. The financial status of Shunxin coal washing from 2018 to September 30, 2021 is as follows: unit: 10000 yuan

Project 2018 / 12 / 31 2019 / 12 / 31 2020 / 12 / 31 2021 / 9 / 30

Total assets 2182.26 2308.12 2424.99 3184.70

Net assets 1802.99 1793.45 1761.22 1701.80

Project 2018 2019 2020 January September 2021

Operating income — 420.35

Net profit -5.87 -5.82 -29.46 -59.42

Note: the above data have not been audited.

4、 After the trusteeship agreement is signed, it will have a specific impact on the operation and finance of the listed company

According to the accounting standards and the guidelines for the application of regulatory rules – Accounting No. 1 issued by the CSRC, Hongding Changhe has included Shunxin coal washing into the scope of consolidated financial statements since the date of custody. After the escrow agreement is signed, all parties are promoting the setting of the board of directors, the establishment of production and operation framework and the sorting of relevant rules and regulations. In addition, the current coal market has changed greatly, and Shunxin coal washing has not carried out business since the date of escrow, which is expected to have little impact on the company’s operation and financial status in 2021.

2. According to the provisions of self regulatory guidelines for listed companies of Shanghai Stock Exchange No. 2 – Financial delisting indicators: operating income deduction, the income from subsidiaries or businesses of business merger obtained by significantly unfair consideration or non trading in this fiscal year shall be deducted. The company is requested to disclose whether the listed company will include Shunxin coal washing in the scope of merger in 2021. If it is included in the merger, please explain whether the consideration paid for the entrusted management of Shunxin coal washing equity is obviously unfair and whether the generated operating income meets the relevant standards for deduction of operating income. Please fully remind the company of the risk that the relevant operating income may be deducted and the listing may be terminated. Please comment.

Reply: I. The listed company included Shunxin coal washing into the scope of merger in 2021

According to the agreement on equity custody of Heshun County Shunxin coal washing Co., Ltd. (hereinafter referred to as “custody agreement”) jointly signed by Zhai Hongbo, Hongding Changhe and Shunxin coal washing in December 2021, Zhai Hongbo (Party A) entrusts Hongding Changhe (Party B) to custody Shunxin coal washing (Party C of the agreement), And agree to authorize and entrust Party B to exercise the relevant rights specified in Party C’s articles of association as a shareholder during the custody period (except for the rights not authorized by this Agreement).

Article 7 of the accounting standards for Business Enterprises No. 33 – consolidated financial statements stipulates: “the consolidation scope of the consolidated financial statements shall be determined on the basis of control. Control means that the investor has the right to the investee, enjoys variable returns through participating in relevant activities of the investee, and has the ability to use the right to the investee to affect its return amount.”

Hongding Changhe is entrusted to manage Shunxin coal washing, which meets the definition of control and has the control over Shunxin coal washing. Since the date of custody, Hongding Changhe has included Shunxin coal washing into the scope of consolidated financial statements, which is in line with the provisions of the accounting standards for business enterprises. The reasons are as follows:

(I) Hongding Changhe has the right to wash Shunxin coal

1. The consolidation criteria specify the circumstances in which the investor has power over the investee

(1) The investor holds more than half of the voting rights of the investee, indicating that the investor has power over the investee, unless there is conclusive evidence that it cannot lead the relevant activities of the investee;

(2) If the investor holds half or less of the voting rights of the investee, but there is evidence that the voting rights held by the investor are sufficient to enable it to dominate the relevant activities of the investee at present, it shall be deemed that the investor has power over the investee;

(3) In some cases, it may be difficult for the investor to judge whether its rights are sufficient to enable it to have power over the investee. If the requirements of Article 16 of the consolidation standards are met, it can be judged that the investor has power over the investee.

2. In terms of voting rights, Hongding Changhe owns 100% of the voting rights of Shunxin coal washing, so it has the power to wash Shunxin coal. Escrow agreement:

“2.1 hosted content

The trusteeship content under this Agreement specifically includes all shareholders’ functions and powers related to the underlying equity:

(1) Determine the company’s business policy and investment plan;

(2) Elect and replace directors and supervisors who are not staff representatives, and decide on matters related to the remuneration of directors and supervisors;

(3) Review and approve the report of the board of directors;

(4) Review and approve the report of the supervisor;

(5) Review and approve the company’s annual financial budget plan and final account plan.

(6) Make resolutions on the increase or decrease of the company’s registered capital;

(7) Make resolutions on the issuance of corporate bonds;

(8) Make resolutions on the merger, division, dissolution, liquidation or change of corporate form of the company;

(9) Formulate or amend the articles of association.

However, it does not include the following functions and powers of shareholders related to the underlying equity:

(1) Review and approve the company’s profit distribution plan and loss recovery plan.

2.2 entrusted management of the subject equity under this agreement, that is, Party B enjoys exclusive ownership and other shareholders’ rights over the subject equity.

2.3 during the custody period under this agreement, without the written consent of Party B, Party A has no right to dispose of the subject equity or set any third-party rights on the subject equity, including but not limited to selling, transferring, replacing, pledging and transferring the subject equity to a third party.

2.4 during the custody period under this agreement, Party B shall not delegate the subject equity to a third party without the written consent of Party A.

3.1 The term of equity custody under this Agreement shall be from the effective date of this agreement to December 31, 2023.

3.2 before the expiration of the trusteeship period, unless this agreement is terminated by both parties through negotiation, this agreement will be automatically extended. 6.1 agree to authorize Party B to exercise the relevant rights specified in Party C’s articles of association as a shareholder according to the needs of its trusteeship business matters during the trusteeship period (except for the right not to entrust limited in this Agreement).

6.2 it is agreed that during the trusteeship period or at the expiration of the trusteeship period, if Party C’s overall operation is in good condition, there are no legal obstacles to sustainable operation and there are no major defects in standardized operation, Party C’s equity held by Party C shall be transferred to Party B at a fair price according to the requirements of Party B, and relevant formalities shall be handled in cooperation. A separate agreement shall be signed for details. 6.3 for the purpose of performing this agreement, Party A has the obligation to cooperate with Party B in issuing relevant written documents when the subject company exercises its shareholders’ rights to prove that Party B is the obligee of the subject equity.

Party A confirms that before Party A transfers the equity of the subject company held by Party A to Party B in accordance with Article 6.2 of this agreement, it expressly and irrevocably waives the right to unilaterally terminate this agreement, and does not interfere, obstruct or affect Party B’s exercise of the shareholder’s rights of custody in any way, but Party A may exercise the right of supervision and inquiry over Party B’s performance of the shareholder’s rights.

6.4 during the custody period, Party B has the right to take full responsibility for the production and operation management of Party C within the scope permitted by national laws and regulations, and exercise all production and operation management powers.

6.5 exercise Party C’s shareholder rights as stipulated in Party C’s articles of association according to the scope of authorization of Party A.

6.6 during the trusteeship operation, in order to ensure the funds required for Party C’s production and operation development, Party B can provide financial support, and the interest will be determined by both parties through negotiation according to the bank loan interest rate in the same period.

6.7 during the trusteeship operation period, Party B shall be responsible for the normal maintenance of Party C’s production equipment, and the maintenance expenses shall be borne by Party C. In case of equipment failure or damage, Party B shall be responsible for repairing or updating, and the expenses shall be borne by Party C. according to the market and production conditions, Party B can carry out technical transformation or upgrading to Party C, and the investment shall be borne by Party C. The above matters shall be reported to Party A and Party C for record. “

Therefore, according to the articles of association of Shunxin coal washing company, through entrusted operation, Hongding Changhe owns 100% of the voting rights of Shunxin coal washing, so it has the power to wash Shunxin coal.

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