Thursday 18 August 2022

Luckin Coffee’s statement on the upcoming extraordinary general meeting of shareholders

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BEIJING, China – Luckin Coffee ’s refreshed Board of Directors and management team (together, the “Refreshed Leadership”) are strongly committed to the capital market and consumer market, endeavoring to create value for the Company’s shareholders, consumers, employees, and other stakeholders. During the past year, the Refreshed Leadership have undertaken numerous actions to stabilize and strengthen the Company.

In particular, under the supervision of the Joint Provisional Liquidators of the Company, the Refreshed Leadership have worked tirelessly to enhance the Company’s internal controls and corporate governance and remediate the damages caused by the misconduct of certain former managers and directors.

As a result of these actions, Luckin Coffee has notably improved its operational and financial results in a rapidly evolving market, despite the challenges presented by the misconduct of those former managers and directors. The Refreshed Leadership are resolute in their commitment to safeguarding what has been achieved and will continue to strive to deliver value to all stakeholders.

The purpose of the upcoming EGM is for the Company’s shareholders to consider, and if thought fit, approve resolutions related to certain amendments to the Company’s Fifth Amended and Restated Memorandum and Articles of Association. Following a careful evaluation and consultation with its external legal advisors, the Board of Directors unanimously determined that the Shareholder Rights Plan and the proposed amendments to Luckin Coffee’s memorandum and articles of association are effective courses of action to fulfill its fiduciary duties to shareholders, help realize the long-term value of their investment, and protect them from potential harmful actions by external entities or groups that are not in the best interests of the Company and all of its shareholders.

The objective of these proposed actions is to protect the long-term viability of the Company by ensuring that appropriate safeguards are established to restrict the ability of certain former managers and directors to acquire equity in the Company or, directly or indirectly, influence the direction of the Company. To be clear, these proposals are NOT intended to prevent truly independent parties from becoming shareholders of Luckin Coffee. The Luckin Coffee Board of Directors’ interests are aligned with shareholders, and the Company will continue to take any and all actions to the benefit of all its shareholders and deliver long-term value.

The Joint Provisional Liquidators have confirmed their support for the proposed actions for their stated objective of ensuring appropriate safeguards are established to restrict former management acquiring equity in the Company.

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