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Statement Regarding the LingOrm Joint Brand Ambassadorship Project for Xuefei (霞飞) Cre: weibo Our company was commissioned by Shanghai Xuefei Cosmetics Co., Ltd. (上海霞飞化妆品有限公司) to handle public opinion management and public relations matters related to the LingOrm joint brand ambassadorship project, as well as to conduct competitive negotiations with relevant companies in Thailand regarding certain disputes. We hereby disclose the incidents and relevant materials we have collected that may have, or have already had, a serious impact on the normal execution of this ambassadorship project, in order to protect the reputation and rights of the Xuefei brand and its brand ambassadors. July 3, 2026 The relevant person in charge at the artists' management company requested that Xuefei share Ling's entry schedule with another footwear brand. However, according to the due diligence conducted during the preliminary assessment of the ambassadorship project, brand ambassador Ling had acquired Thai nationality. This information was based on, but was not limited to, publicly available information about the artist online and previously published documents concerning commercial performance permits. As foreign artists entering China for work must obtain a Foreigner's Work Permit in China, they are required to provide details of all work activities and the cities in which they will work throughout the period from entry into China until departure. Since Xuefei's scheduled activities were arranged first, the brand would be responsible for submitting the artist's entry application. To avoid unnecessary complications and disputes, the brand explicitly rejected the request to share the schedule. September, 2026 On September 11, 2026, Xuefei submitted an application to the relevant authorities for approval of the offline event. Approval was granted on September 17. However, the relevant authorities subsequently received a report alleging that one of the artists scheduled to attend the event, Orm, had previously participated in an event in Changsha without holding a work visa. The brand therefore contacted the Thai side to verify the information and received records showing that all nine of the artist's previous entries into mainland China had been accompanied by work-related documentation. These records were submitted as supporting evidence in response to the allegation. On September 16, the brand submitted a filing for the Douyin livestream scheduled for September 22. During the process, it discovered that the documents provided by the management company for Ling might not meet the requirements for working in China. Although the livestream was to be broadcast from outside China, the brand was still reminded that if Ling subsequently entered China for work, separate relevant procedures would need to be completed. On September 24, the application for approval of the event was returned following a review. Law enforcement officials further informed the brand that Ling had been involved in work activities within mainland China in June of that year, during which the police had intervened and ordered the activity to stop. The entry and work documents provided at the time were also questionable and might not have been valid for employment by a foreign national in China. After being contacted, the management company's representative stated that other brands had encountered the same situation and acknowledged being aware that the June event had been stopped following police intervention. Despite receiving explicit warnings about the associated risks, the management company refused to take corrective measures and continued to secretly organize activities. From that point onward, the brand repeatedly issued serious requests for the management company to provide all documents necessary for the artist to obtain a work permit, including but not limited to personal identification documents and other information required in the permit application, such as work activities, cities of stay, and the city of departure. October, 2026 After repeated requests, the management company stated that it would provide all the required documents in full by October 1, 2026. However, citing China's National Day holiday and the fact that staff members of the cooperating brand were on leave, the management company requested an extension until October 8, 2026. During discussions, the management company made the following commitment: If compliant documents could not be provided by October 8, BEC would assume full responsibility and refund the entire artist ambassadorship fee. After the October 8 deadline passed, the management company once again requested an extension, this time until October 12, 2026, claiming that the other brand had still not resumed business operations. On October 14, the work permit for artist Orm to work in China was approved. The brand contacted the management company and provided a copy of Orm's approved work permit, together with the supporting documents required for the application, as a reference template. The brand hoped that the management company would provide an accurate response as soon as possible. On October 15, after the brand publicly announced the offline event venue, it received another notification from the regulatory authorities. The authorities stated that they had continued to receive reports concerning public opinion issues and the artists' documentation. They required the brand to provide valid work documents for both artists and issue a public announcement to reassure consumers. However, at that point, the brand still only possessed valid work permit documentation for ambassador Orm. With no other option, the brand was forced to publish information concerning Orm alone. As of October 20, when Xuefei published its announcement, the brand had still not received the required documents. However, the brand subsequently learned that the management company had stated that artist Ling still retained Hong Kong nationality and could therefore apply for a Mainland Travel Permit for Hong Kong and Macao Residents (hereinafter referred to as the Home Return Permit), which could be used as a work document. The management company also guaranteed that the relevant documents would be provided on October 22. On October 22, the brand received another update from the management company, stating that it had only obtained the application receipt and would not be able to collect the actual document until October 28. Meanwhile, the brand had already received notices requesting assistance with investigations from various authorities, including but not limited to the Market Supervision Administration, tax authorities, and immigration authorities. These requests concerned the artist's contract, tax matters, and documentation. In accordance with the law, the brand provided the relevant documents, including the project contract, the artist's image rights authorization, bank transaction records, proof of tax withholding and payment on behalf of the artist in relation to overseas remittances, and Orm's work permit. The brand also contacted the management company again regarding Ling's documentation issues. The management company stated that the artist had never previously applied for a Home Return Permit because they were unaware of the relevant regulations, and that this was the first time such an application had been made. However, given the management company's repeated lack of cooperation and delays, as well as the fact that Xuefei was unable to verify the artist's previous entry records and should not be held responsible for them, the brand requested that competitive negotiations be initiated. The brand required the management company to at least provide a written undertaking guaranteeing the protection of Xuefei's commercial reputation. However, the management company did not respond. On October 23, the management company still had not responded as to whether it would sign the written undertaking. Instead, it suddenly claimed that, under Chinese law, two GL actresses were not permitted to appear on stage together, and demanded that the event be changed to a 1+1 format, meaning that the two artists would appear separately rather than together. We rejected this claim, pointing out that no such law exists in China. We also provided records of other joint appearances involving two GL actresses under the same management company. Once again, the management company failed to provide any response. On October 28, the management company provided the brand with a photograph of Ling's newly issued Home Return Permit. The brand subsequently submitted this document to the relevant authorities that had requested assistance with the investigation. However, the document showed a replacement issuance count of 3, indicating that the artist had previously held this type of document. This raised questions about why the document had not been used in compliance with the relevant regulations during the artist's previous work-related entries into mainland China. The brand therefore requested that the artist's side provide an accurate explanation regarding this matter. From that point onward, the management company began delaying the process under various reasons and excuses, including but not limited to requests for materials that the brand had already committed to the relevant authorities would remain confidential and would not be disclosed externally.