On January 13, 2017, Kangda Investment (Hong Kong) Co., Ltd. (hereinafter referred to as Kangda Investment), the wholly-owned subsidiary of Kangda International Environmental Co., Ltd. (hereinafter referred to as Kangda EP), came to an agreement to acquire Hatlen Investment with RMB 39,595,000. Hatlen Investment holds 50% shares of Production (Putian) Water Treatment Co., Ltd. (hereinafter referred to as Putian Company). Besides, Kangda Investment also subscribed 1.09% of enlarged issued share capital of Production (Asia) Water Holdings Co., Ltd. (hereinafter referred to as Production Water) with HKD 270,000. Production Water holds 30% shares of Putian Company.

      After the signing of sale agreement and shareholder agreement, Kangda Investment will hold about 1.09% enlarged issued share capital of Production Water and 100% controlling interests of Hatlen Investment, as well as 50.30% controlling interests of Putian Company. With a daily treatment capacity of 160,000 tons, Putian Company is mainly engaged in the operation of sewage treatment facility in Putian City, Fujian Province.