Pursuant to the JV Agreement dated 2 December 2019 entered into between Million Success and MGH (Mulsanne Group Holding Limited), MGH was obligated to complete the formal establishment of the JV Company together with the issuance of a business license within two (2) months of signing the JV Agreement. As at the date of this announcement, MGH has failed to establish the JV Company and is therefore in material breach of the terms of the JV Agreement. Million Success has issued a notice of termination dated 30 July 2020 to MGH, through its legal advisors, terminating the JV Agreement with immediate effect and demanding payment by MGH to Million Success of CNY 50 million pursuant to the liquidated damages clause of the JV Agreement.