Announcement of the Company's Closure of Factory

1.Date of occurrence of the event:2025/05/21

2.Cause of the event:The Company has adjusted its production and

manufacturing operation strategy to enhance production efficiency and

improve cost structure. We will begin evaluating and planning for full

outsourcing production in 2023, and will begin gradually implementing

the full outsourcing production plan in 2024. After a year of adjustment,

the company will terminate production at its own factory by the end of 2024,

and change its manufacturing from partial outsourcing to full outsourcing.

The original capacity utilization rate of the owned factory was about 50%.

The output in 2023 was 427,000 pieces. The production began to be gradually

reduced in 2024, and the output was reduced to 0 pieces in December 2024.

The annual output in 2024 was 257,000 pieces.

The benefits of this operational adjustment are as follows:

(I)Improve the company's cost structure and increase the gross profit margin

of its own products; the company can put resources into design and sales,

and focus more on brand development and management.

(II)In addition to effectively reducing inventory preparation for

self-stocking production, reducing inventory days, and optimizing capital

utilization, it can also effectively improve operational efficiency; by

strictly controlling the qualifications of the supply chain, production

quality can be maintained.

(III)Increase product diversity, improve product design and production

flexibility, and accelerate the timeliness of product launch.

(IV)The original discontinued production plant was converted into a

third-party logistics base in line with the company's development strategy,

bringing in logistics revenue to the company.

In the future, the company's business strategy will adopt a light-asset

operation model, focusing more effectively on brand development

and management, and continuing to develop e-commerce and expand sales

channels. In addition, we will actively develop cooperation with other

brands, third-party logistics and new retail media businesses.

3.Comparison of production capacity for the most recent three fiscal years

and following the decrease in production:

2022 660,000 pieces

2023 660,000 pieces

2024 660,000 pieces

4.Comparison of production output for the most recent three fiscal years and

following the decrease in production:

2022 544,670 pieces

2023 427,313 pieces

2024 256,692 pieces

5.Production capacity of the fully or partially suspended work items:0 pieces

6.Production output of the fully or partially suspended work items:0 pieces

7.Share of the company operating revenue that the fully or partially

suspended work items account for:N/A

8.Itemized details of outleased Company plant or principal equipment:N/A

9.Share of total assets that the outleased Company plant or principal

equipment account for:N/A

10.Itemized details of pledged or mortgaged assets:N/A

11.Share of total assets that the pledged or mortgaged assets account for:N/A

12.Decision-making process:N/A

13.Any other matters that need to be specified (the information disclosure

  also meets the requirements of Article 7, subparagraph 3 of the Securities

  and Exchange Act Enforcement Rules, which brings forth a significant impact

  on shareholders rights or the price of the securities on public companies.):

N/A