Hengxin Shambala Culture Co.,Ltd. announced a private placement of not more than 105,831,575 A shares for gross proceeds of not more than CNY 1,000,000,000 on August 26, 2019. The shares will be issued at a price, with pricing reference date to be the first day of issuance, the price shall either be not lower than the average stock price of 1 trading day before the first day of issuance or lower than the average stock price 20 trading days before the first day of issuance but not lower than 90% or lower than the average stock price 1 trading day before the first day of issuance but not lower than 90%. The transaction will involve participation from not more than 5 designated investors. The shares issued in the transaction will have a lock up period of 12 months after the issuance completion date within which they cannot be transferred if issue price is lower than the average stock price 20 trading days before the first day of issuance but not lower than 90% or lower than the average stock price 1 trading day before the first day of issuance but not lower than 90%, or no lock up period and can be listed immediately after issuance completion if the issue price is not lower than the average stock price 1 trading day before the first day of issuance. The transaction has been approved by the board of directors of the company in its 6th directorate in its 32nd meeting and by the company’s 6th supervisory board in its 24th meeting. The transaction is subject to approval of shareholders in 3rd extraordinary general meeting to be held on September 11, 2019 and China Securities Regulatory Commission.