Notice Regarding Dissolution and Liquidation of Overseas Subsidiary and Recording of Extraordinary Loss

Overview of Dissolution and Liquidation

The Board of Directors resolved to dissolve and liquidate Suzhou Regal Leather Products Co., Ltd., an unconsolidated subsidiary accounted for by the equity method. The dissolution date will be determined and procedures will be carried out in accordance with local laws, and dissolution and liquidation completion is expected after the necessary procedures are completed. The company's business is shoe manufacturing, and production is currently continuing at Huajian Footwear Co., Ltd.

Financial Impact and Future Outlook

In connection with the dissolution, an impairment loss on equity-method investment of 174 million yen is scheduled to be recorded in the consolidated interim results for the fiscal year ending February 2027. In addition, in the consolidated results for the fiscal year ending February 2027, business reorganization expenses such as economic compensation to local employees will be additionally recorded as extraordinary losses, and the total extraordinary losses are expected to be approximately 300 million yen. The amounts are current estimates based on calculations by specialized institutions and may change in the future.