The Board of China Outfitters Holdings Limited announces that on 31 August 2022, Shanghai Hongmeng, a subsidiary of the Company, entered into the Shareholder's Loan Agreement with the Joint Venture Company, pursuant to which Shanghai Hongmeng agreed to provide the Shareholder's Loan of RMB 25,000,000 to the Joint Venture Company. The Shareholder's Loan has a term of two years with an interest rate at 4.5% per annum and will be secured by the recreation equipment and facilities purchased by the Joint Venture Company. FORMATION OF JOINT VENTURE COMPANY: Prior to the entering into of the Shareholder's Loan Agreement, on 4 July 2022, Shanghai Hongmeng entered into the Investment and Cooperation Agreement with Shanghai Jegolay, pursuant to which, the both parties agreed to establish the Joint Venture Company in Shanghai with a registered capital of RMB 1,000,000 and each of Shanghai Hongmeng and Shanghai Jegoplay agreed to contribute to the registered capital of the Joint Venture Company at RMB 400,000 and RMB 600,000, respectively.

The Joint Venture Company will be principally engaged in the development and operation of the Jegoplay Park. The Joint Venture Company will be principally engaged in the development and operation of the Jegoplay Park which will be located at Shanghai Yuehu sculpture park in Songjiang District, Shanghai. The Jegoplay Park will have a site area of approximately 67,000 square meters and will be equipped with unpowered recreation equipment and facilities.

The registered capital of the Joint Venture Company is RMB 1,000,000 and each of Shanghai Hongmeng and Shanghai Jegoplay agreed to contribute to the registered capital of the Joint Venture Company at RMB 400,000 and RMB 600,000, respectively. The development and operation of the Jegoplay Park will be in stages with an expected total investment of approximately RMB 75.0 million. The first phase investment for the development and operation of the Park is expected to be of approximately RMB 61.2 million.

The portion of investment amount exceeding the paid-in capital of the Joint Venture Company will be financed by shareholders' loans and bank loans. On 31 August 2022, the JV Shareholders agreed that the shareholders' loans will be provided by the JV Shareholders in proportion to their equity interest in the Joint Venture. Therefore, On 31 August 2022, Shanghai Hongmeng entered into the Shareholder's Loan Agreement with the Joint Venture Company, pursuant to which Shanghai Hongmeng agreed to provide a shareholder's loan of RMB 25,000,000 to the Joint Venture Company.