与受限制清单实体交易

During the Track Record Period, we purchased a large amount of KCL, directly and indirectly, from Supplier D in Belarus, which was one of our top five suppliers.

Since Supplier D was designated by OFAC as an SDN, we have ceased entering into new purchase contracts with it.

The table below sets forth our overseas and domestic purchases of KCL originated from Russia, in absolute amount and as a percentage of our total purchases of KCL, for the years/periods indicated.

It is possible that these multinational conglomerates and technology corporations headquartered in the PRC and/or their products may be subject to export/import restrictions and/or sanctions imposed by certain foreign countries for use in these foreign countries from time to time.

Supplier I has been placed on a trade list by the U.S since 2019 which restricts most U.S. suppliers from shipping goods and technology to it unless they are granted licences issued by the Federal Communications Commission of the U.S.

In addition, our Directors confirm that during the Track Record Period, there has not been any material disruption to our supplies sourced from any of our suppliers by reason of any export or import restrictions or other sanctions imposed on any of our suppliers, their upstream players or their products.

Effective March 2, 2023, the U.S. Department of Commerce’s Bureau of Industry and Security ("BIS") added certain entities to the entity list (the "Entity List"), including "4Paradigm Technology Co., Ltd." with aliases "4Paradigm," "4th Paradigm," and "Fourth Paradigm".

Moreover, sales of AIO products which do not contain U.S.-branded chips accounted for more than half of sales of our AIO solutions for each of the year ended December 31, 2022, and the three months ended March 31, 2023.

In light of the above, our Directors are of the view that the Entity List designation of the Listed Entities should not have any material adverse impact on our business and financial performance.