On 4 August 2023, Fiscal Year Financial (Shenzhen) Co., Ltd. entered into the Factoring Agreement with Tongnan Decoration, pursuant to which the Company has agreed to provide accounts receivable factoring service for Tongnan Decoration with a factoring principal amount of up to RMB 10,000,000, in return for (i) factoring interest income; and (ii) transfer of the legal title of accounts receivables created in the ordinary and usual course of business of Tongnan Decoration with its customer(s) (i.e. debtor(s) of Tongnan Decoration) from Tongnan
Decoration to the Company. If there is any event of default of the terms of the Factoring Agreement, the Company may exercise its right of recourse and demand for repurchase of the accounts receivables by Tongnan Decoration. In such event, Tongnan Decoration shall be liable to pay the factoring expenses, default compensation and the outstanding factoring principal amount to the Company.