Notice Regarding Business Transfer Between Consolidated Subsidiaries and Dissolution and Liquidation of a Consolidated Subsidiary

Overview of the Matter

The Company will transfer the sales business of industrial sewing machines and parts operated by consolidated subsidiary PEGASUS SEWING MACHINE PTE. LTD. (PL) to consolidated subsidiary PEGASUS UNITED ASIA SDN. BHD. (PM). After the transfer, PL will be dissolved and liquidated following completion of procedures in accordance with local laws. PM will consolidate sales functions for the ASEAN and South Asia regions into PM to improve sales structure efficiency and optimize management resources. The disclosure also references planned transfers of liaison offices and a separate disclosure regarding the establishment of an Indian subsidiary.

Outlook and Impact

Since this business transfer is completed between consolidated subsidiaries, the direct impact on consolidated financial results is expected to be limited. The effects associated with PL’s dissolution and liquidation are currently under review; however, through consolidation of the sales structure and optimization of fixed costs, the company aims to improve the apparel machinery business’s profitability and capital efficiency over the medium to long term.