Huaxun Fangzhou Co.Ltd(000687) : Huaxun Fangzhou Co.Ltd(000687) announcement on the progress of litigation involving the company (2022 / 01 / 26)

Securities code: 000687 securities abbreviation: * ST Huaxun Announcement No.: 2022-016

Huaxun Fangzhou Co.Ltd(000687)

Announcement on the progress of litigation involving the company

The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.

Huaxun Fangzhou Co.Ltd(000687) (hereinafter referred to as “the company”) received the execution notice and property reporting Order No. 74 (2022) issued by Hebei Baoding intermediate people’s Court (hereinafter referred to as “Baoding intermediate people’s court”) on January 24, 2022. According to the above execution documents, The case of construction contract dispute between Zhongtian Construction Group Co., Ltd. (hereinafter referred to as “Zhongtian construction”) and its subsidiary Hebei Huaxun ark Equipment Technology Co., Ltd. (hereinafter referred to as “Hebei equipment”) and the company (case No.: (2020) Ji 06 minchu No. 170) has entered the stage of enforcement. On January 24, 2022, the company received the civil ruling (2021) suminzhong No. 2397 from Jiangsu Higher People’s court sent by its subsidiary Nanjing Huaxun Fangzhou communication equipment Co., Ltd. (hereinafter referred to as “Nanjing Huaxun”). According to the above civil ruling, China Zheshang Bank Co.Ltd(601916) Nanjing Branch (hereinafter referred to as ” China Zheshang Bank Co.Ltd(601916) Nanjing Branch”) and Nanjing Huaxun The higher people’s Court of Jiangsu Province has made a judgment on the dispute over financial loan contracts such as companies after Nanjing Huaxun and other appeals. The relevant information is hereby announced as follows:

1、 Basic information of the case

(I) dispute over construction contract between Zhongtian construction and Hebei equipment, company and other construction projects

On November 2, 2020, the company received the notice of responding to the lawsuit (2020) Ji 06 min Chu No. 170 from the intermediate people’s Court of Baoding City, Hebei Province, sent by Hebei equipment. Zhongtian construction filed a lawsuit against Hebei equipment on the construction contract disputes with its subsidiary Hebei equipment.

On July 19, 2021, the company received the (2020) Ji 06 min Chu No. 170 civil judgment served by the intermediate people’s Court of Baoding City, Hebei Province. According to the above civil judgment, Zhongtian construction and the company’s subsidiary Hebei equipment and other construction project construction contract dispute case (case No.: (2020) Ji 06 min Chu No. 170), Baoding intermediate people’s Court of Hebei Province has made a judgment.

For details, see the announcement on major litigation (Announcement No.: 2020-142) disclosed by the company on November 3, 2020 and the announcement on the progress of litigation involving the company (Announcement No.: 2021-075) disclosed on July 21, 2021.

(II) China Zheshang Bank Co.Ltd(601916) dispute over financial loan contract between Nanjing branch and Nanjing Huaxun, company, etc

Securities code: 000687 securities abbreviation: * ST Huaxun Announcement No.: 2022-016

On February 4, 2021, the company disclosed the announcement on major litigation (Announcement No.: 2021-014): China Zheshang Bank Co.Ltd(601916) Nanjing Branch filed a lawsuit against Nanjing Huaxun and the company due to disputes over financial loan contracts with Nanjing Huaxun and the company.

On August 18, 2021, the company received the civil judgment (2020) Su 01 min Chu No. 2952 from Nanjing Intermediate People’s Court of Jiangsu Province sent by its subsidiary Nanjing Huaxun. According to the above civil judgment, China Zheshang Bank Co.Ltd(601916) Nanjing Branch has made a judgment on the dispute over financial loan contracts with Nanjing Huaxun and the company. For details, see the announcement on the progress of litigation involving the company (Announcement No.: 2021-089) disclosed by the company on August 19, 2021.

2、 Progress of this lawsuit

(I) dispute over construction contract between Zhongtian construction and Hebei equipment, company and other construction projects

1. Basic information of this implementation

Applicant: Zhongtian Construction Group Co., Ltd

Executed by: Hebei Huaxun ark Terahertz Technology Co., Ltd., Hebei Huaxun ark Equipment Technology Co., Ltd., Huaxun ark Technology Co., Ltd., Huaxun Fangzhou Co.Ltd(000687)

2. Baoding intermediate people’s Court (2022) Ji 06 Zhi No. 74 execution notice and property reporting order mainly include:

① Main contents of Baoding intermediate people’s Court (2022) Ji 06 Zhi No. 74 implementation notice

I Hebei Huaxun ark Terahertz Technology Co., Ltd. paid the project payment of 62348002.59 yuan and interest to Zhongtian Construction Group Co., Ltd (based on 60220655 yuan, calculated from October 8, 2020 to the date of actual payment, the annual interest rate is 18%. Based on 2127347.59 yuan, calculated from December 1, 2020 to the date of actual payment, the annual interest rate is 18%); Hebei Huaxun ark Equipment Technology Co., Ltd. shall be liable for the payment of 29.87 million yuan and the corresponding interest out of the above project payment of 60220655 yuan; 2、 Huaxun ark Technology Co., Ltd. shall be jointly and severally liable for the payment obligation mentioned in the preceding paragraph of Hebei Huaxun ark Terahertz Technology Co., Ltd; Huaxun Fangzhou Co.Ltd(000687) bear joint and several liability for the payment obligation mentioned in the preceding paragraph of Hebei Huaxun ark Equipment Technology Co., Ltd;

3、 The project funds and interest owed by Zhongtian Construction Group Co., Ltd. to Hebei Huaxun ark Terahertz Technology Co., Ltd. shall be paid preferentially in the discount or auction price of bid section II of terahertz international science and technology industry base in Xushui District, Baoding city constructed by Zhongtian Construction Group Co., Ltd.

4、 Hebei Huaxun ark Terahertz Technology Co., Ltd. shall bear the case acceptance fee of 3540.01 yuan,

Securities code: 000687 securities abbreviation: * ST Huaxun Announcement No.: 2022-016

The preservation fee is 5000 yuan, totaling 358540.01 yuan.

5、 Hebei Huaxun ark Terahertz Technology Co., Ltd., Hebei Huaxun ark Equipment Technology Co., Ltd., Huaxun ark Technology Co., Ltd., Huaxun Fangzhou Co.Ltd(000687) bear the execution fee of 131518 yuan.

During the period of delay in performance, the double debt interest will continue to be calculated until the date of completion of execution.

② Main contents of Baoding intermediate people’s Court (2022) Ji 06 Zhi No. 74 Property Reporting order

On January 19, 2022, the court filed and executed the case of the dispute between Zhongtian Construction Group Co., Ltd. and Hebei Huaxun ark Terahertz Technology Co., Ltd., Hebei Huaxun ark Equipment Technology Co., Ltd., Huaxun ark Technology Co., Ltd., Huaxun Fangzhou Co.Ltd(000687) construction project construction contract, which has served an execution notice to your unit, and your unit failed to perform the obligations determined in the legal documents according to the execution notice. In accordance with Article 248 of the Civil Procedure Law of the people’s Republic of China and Articles 3 to 11 of the provisions of the Supreme People’s Court on several issues of property investigation in civil execution, the court ordered your unit to truthfully report the current property situation and the year before the date of receiving the execution notice to the court within 2 days after receiving this order.

During the execution, if the property status changes, a supplementary report shall be submitted to the court within 10 days from the date of the property change.

In case of refusal or false report, the court will take measures such as fine and detention according to the seriousness of the circumstances.

(II) China Zheshang Bank Co.Ltd(601916) dispute over financial loan contract between Nanjing branch and Nanjing Huaxun, company, etc

1. Parties to the case

Appellant: Nanjing Huaxun Fangzhou communication equipment Co., Ltd. and Shenzhen Huaxun Fangzhou Investment Co., Ltd

Appellee: China Zheshang Bank Co.Ltd(601916) Nanjing Branch, Huaxun Fangzhou Co.Ltd(000687) , Huaxun Fangzhou Technology Co., Ltd., Wu Guangsheng, the third person in the original trial: Fushen Industrial Co., Ltd

2. The main content of Jiangsu Higher People’s court’s (2021) suminzhong No. 2397 civil ruling: this case is handled according to the automatic withdrawal of appeal by Nanjing Huaxun Fangzhou communication equipment Co., Ltd. and Shenzhen Huaxun Fangzhou Investment Co., Ltd. The judgment of first instance shall become legally effective from the date of service of this ruling.

3、 Other undisclosed litigation and arbitration matters

As of the date of this announcement, the total amount involved in other small claims of the company that did not meet the disclosure standards was 872000 yuan, accounting for 0.06% of the absolute value of the company’s latest audited net assets. In addition, the company has not received other legal documents, and there are no other litigation and arbitration matters that should be disclosed but not disclosed.

4、 Possible impact of litigation and arbitration matters announced in this announcement on the company’s current profits or later profits

As of the disclosure date of this announcement, the interest and penalty interest involved in the above cases will have an impact on the company’s profits in the current period. The debt interest during the subsequent delay in performance will be accrued by the company according to the accrual basis and will be paid to the company later

Securities code: 000687 securities abbreviation: * ST Huaxun Announcement No.: 2022-016

Impact on current profit.

The company will negotiate solutions with creditors, strive to reach an agreement with creditors on debt solutions, and fully raise debt repayment funds by accelerating the recovery of accounts receivable and disposal of assets. In addition, due to the shortage of funds of the company and its subsidiaries, the company and its subsidiaries have failed to pay bank loans, project funds, supplier loans, restricted stock repurchase funds, etc. in time. At present, the company and its subsidiaries have faced more judicial proceedings. The subsidiary Hebei equipment has the risk that the relevant construction in progress assets will be further auctioned by the judiciary due to the case’s failure to timely fulfill its repayment obligations. Please invest rationally and pay attention to investment risks.

5、 Documents for future reference

1. Hebei Baoding intermediate people’s Court (2022) Ji 06 Zhi No. 74 enforcement notice and property reporting order

2. Jiangsu Higher People’s Court (2021) suminzhong No. 2397 civil ruling

It is hereby announced.

Huaxun Fangzhou Co.Ltd(000687) board of directors

January 26, 2022

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