TRISTATE HOLD(00458) and ABG, along with related franchisees, have recently had disputes regarding distribution and/or clearance rights of Nautica, Spyder, and Reebok brand products.

TRISTATE HOLD (00458) announced that the Group is primarily engaged in garment manufacturing and brand business (including own-brand business and franchised brand business). In terms of franchised brand business, the Group has entered into franchising agreements with the franchisors of Nautica and Spyder brands (according to the Group's information, they are affiliates of Authentic Brands Group (ABG)), distributing Nautica and Spyder brand products in Mainland China and Hong Kong (including). The Group has also entered into a franchising agreement with the franchisor of the Reebok brand (according to the Group's information, also an affiliate of ABG), distributing Reebok brand products in Mainland China, Hong Kong, Macau, and Taiwan. As disclosed in the announcement dated December 29, 2025, the franchising rights have been terminated early starting from December 31, 2025. There have been recent disputes between the Group and ABG and its related affiliated franchisors regarding the distribution and/or clearance rights of Nautica, Spyder, and Reebok brand products. ABG and related affiliated franchisors have expressed their intention to terminate the franchising agreements of Nautica and Spyder brands by June 30, 2026, or earlier, and to pay additional franchising fees according to the terms of the franchising agreements of Nautica, Spyder, and Reebok brands. To protect its interests, the Group initiated legal proceedings against the franchisors and related individuals of Nautica and Spyder brands on July 1, 2026 (Hong Kong time) in the Supreme Court of New York, seeking a temporary injunction to prevent them from terminating the franchising agreements of Nautica and Spyder brands, making payments as required under any financial guarantee documents provided by the Group under those franchising agreements, and to hinder the rights of the Group under those franchising agreements. As the Group has just initiated legal proceedings against ABG's related affiliated franchisors, and the proceedings are still in the early stages, the company believes that it is currently unable to determine the potential financial impact on the Group.