【Ocean-KY】Recovery Status of Receivables from Shenzhen Dama Hua Investment Co., Ltd.

1. Date of Event: 115/06/18

2. Company Name: Ocean Commercial Group Holdings Co., Ltd.

3. Relationship with Company (Please Enter 'Our Company' or 'Subsidiary'): Our Company

4. Mutual Shareholding Ratio: Not applicable

5. Reason for Occurrence:

a. The outstanding receivable balance from Shenzhen Dama Hua Investment Co., Ltd. amounts to NT$280,547 thousand (RMB 61,000 thousand).

b. Regarding the receivable of RMB 324 million from Quanzhou Fengsheng Group, Fengsheng Group had repaid 10% of the total investment amount (RMB 32.4 million) by April 28, 2017, and 40% (RMB 129.6 million) by November 13, 2017, as stipulated in the contract. The remaining 50% (RMB 162 million) is yet to be recovered. Shenzhen Dama Hua Investment Co., Ltd. (hereinafter referred to as 'Dama Hua') agreed to assume this receivable and has made the following payments: RMB 30 million on February 9, 2021; RMB 25.5 million on December 30, 2021; RMB 25.5 million on March 11, 2022; and RMB 20 million on June 30, 2022. The outstanding balance is RMB 61 million.

c. Ocean's Audit Committee and Board of Directors discussed Dama Hua's deferred repayment plan on July 8, 2022, and approved in principle a phased payment arrangement: RMB 20 million on June 30, 2022; RMB 16 million on December 31, 2022; RMB 16 million on March 31, 2023; and RMB 29 million on June 30, 2023. The RMB 20 million payment on June 30, 2022, has already been received.

d. Regarding the adequacy of collateral value and related creditor protection measures: To secure the receivable, the Company previously obtained a 100% equity pledge in Quanzhou Feng'an Real Estate Development Co., Ltd. Fujian Junheng Real Estate Appraisal Co., Ltd. issued a report on July 11, 2022, valuing the land parcel owned by Feng'an at approximately RMB 260.31 million (after estimated taxes and fees). According to KPMG's audit, a full impairment provision of RMB 61 million has been recognized as of Q2 2023.

e. The receivable from Dama Hua originated from the takeover of the Quanzhou Citong Road land project. Due to the project's prolonged stagnation, which significantly impacted the urban image and public interests, the Quanzhou Municipal Government convened a meeting and approved in principle that Quanzhou State-owned Asset Management Co., Ltd. and Fujian Wujian Real Estate Development Co., Ltd. would jointly take over the project's development through cooperation with existing developers. The respective rights, obligations, and risk control measures are to be confirmed promptly, and relevant cooperation agreements are to be drafted, with implementation led by Fengze District Government. Efforts are currently underway to coordinate and resume construction. In light of this, Dama Hua intends to negotiate with the Company on recovering the receivable through future project proceeds, aiming to confirm each party's share of benefits as soon as possible, under the overarching principle of maximizing the Company's interests.

6. Response Measures:

The Company will negotiate with Dama Hua regarding future project development to recover the receivable.

7. Other Matters to be Disclosed (If the subject is a publicly listed company or above, this material information also qualifies under Article 7, Paragraph 9 of the Enforcement Rules of the Securities and Exchange Act as a matter having significant impact on shareholders' rights or securities prices): None

Keywords: Material Information