The Board of Directors of China Ouhua (“Board”) wishes to update that the land title ownership has yet to be transferred to Yantai Fazenda Ouhua Winery Co., Ltd. (“Yantai Ouhua”).

The People’s Republic of China (“PRC”) had changed their rules and implemented the real estate registration certificate system, whereby the former land use right certificate and real estate certificate are now merged and would be issued as real estate certificate. The implementation of the new rules involved more tedious procedures and had caused the delay for the Company’s application to be approved.

Management has been actively coordinating with the relevant government departments in relation to the land title ownership. However, as part of the subject real estate is a state-owned property, the land title ownership transfer was subject to the examination and approval by State-owned Assets Supervision and Administration Commission and the decision of the District Mayor Administration Meeting. Currently, China Ouhua is still waiting for the result of the said examination and approval on the Company’s application. In addition, the delay was also due to the institutional reforms and personnel changes in the relevant government departments.

In June 2019, the Department of Natural Resources of Shandong Province had issued the Document (2019) No. 3 (“the Document”), a guidance on accelerating the legacy of unsolved historical land property rights related issues. The Company fulfilled all relevant criteria stipulated in the Document.

The District Government had submitted the Company’s application on the land title ownership transfer to the Municipal Bureau of land and natural resources for processing (“the Application”). The Application had been accepted and was pending review and approval. The process on the land title ownership was expected to be accelerated with the introduction of the Document by the provincial government of Shandong. However, Management had been informed that there were a few hundred applications of similar unsettled cases to be reviewed prior to granting of the approval.

China Ouhua will proactively follow up with the relevant government authorities of the PRC to ensure the land title ownership is transferred to Yantai Ouhua.

Barring any unforeseen circumstances, the Board is of the view that the whole process should be able to complete within six (6) months from the date of this announcement.