Material Information

2021-01-15

On behalf of the Kunshan YFY Advertising and Printing Co., Ltd. (“KAPC”), YFY announces that the court accepted the bankruptcy applications of KAPC

1.Date of the petition or receipt of the court notice document:2021/01/15
2.Name of the court:Kunshan People's Court in Jiangsu Province
3.Issue date:2021/01/08
4.Document number:(2020) Su 0583 Po No. 5
5.Company name:Kunshan YFY Advertising and Printing Co., Ltd.
6.Relationship with the Company (please enter: the company itself, parent
company, or subsidiary):Subsidiary
7.If a parent company or subsidiary company is entered, the mutual
shareholding percentages thereof:
YFY indirectly invests in KAPC and holds 100% of its total shares
8.Petitioner(s) or reorganizer(s):
Shanghai Railway Printing Co., Ltd. & Shanghai Yinye Paper Co., Ltd.
9.Content of the petition or notice:
The court accepted and heard the bankruptcy case filed by Shanghai Railway
Printing Co., Ltd. & Shanghai Yinye Paper Co., Ltd. against KAPC.
10.Total amount of liabilities:RMB 109,287,350.47
11.Handling procedure:
KAPC was established in 2004. It mainly engaged in the design, product
various advertisements, packaging and decoration printed matter printing
business. The book printing business could not be developed as originally
planned because it did not meet the franchise conditions imposed by KAPC’s
Chinese partner. A business manager later embezzled funds of KAPC and left
KAPC. While KAPC filed a criminal complaint, the suspect is still at large.
The court held that even if KAPC were to recover the stolen funds in full,
its assets are still insufficient to pay off all its debts. Therefore, it
ruled to accept the creditor’s application for bankruptcy liquidation of
KAPC.
12.Any other matters that need to be specified:
The accumulated losses of KAPC have been written off in the YFY's
consolidated financial statements and this matter has no material impact
on YFY's financial and business operations.