About REGAL PARTNERS Company

We are mainly engaged in the production of sofa products and sofa covers in China, and have an integrated operating model of design, production, sales and marketing. According to the Euromonitor report, we are one of the top three manufacturers of upholstered sofas in China in terms of exports to the US in 2015. Our products are usually sold under the two brands “Morris Holdings Limited” and “Morris Zou”. We mainly export “Morris Holdings Limited” brand sofa products to customers in the US market, and sell “Morris Zou” brand sofas and wooden furniture products domestically through direct stores in Zhejiang Province, China. We stand out in the industry by designing our own sofas and other furniture products. Most of the sofa and furniture products we sell to our customers are designed by our Haining R&D center, and we also hire an experienced independent American sofa designer to assist us in product design. We mainly sell various sofa products under the “Morris Holdings Limited” brand to overseas markets (including the United States, Canada, the United Kingdom, Singapore, Australia, Ireland and South Korea), including non-functional sofas, functional sofas (with or without smart home functions), and sofa covers. Our sofa product customers include some of the largest furniture retail chains and retail storage clubs in the US. Our sofa products are mainly aimed at overseas consumers, and these consumers have greater demand for the quality and functionality of sofa products. To meet consumer preferences, our sofa products are equipped with smart home functions such as audio function, massage function, drink cooling function, Bluetooth and USB interface. Since 2014, we have designed, produced, marketed and sold sofa products and wooden furniture products under our “Morris Zou” brand in China through our direct stores in Haining and Jiaxing, Zhejiang, China. Our target customers for sofa products and wooden furniture products under the “Morris Zou” brand are Chinese consumers. These consumers have broader and greater demand for the quality and functionality of furniture, and prefer European design. Our Haining R&D center included more than 40 employees on April 30, 2016, responsible for conceiving, designing and developing new and innovative sofas and other furniture products, as well as identifying new trends and customer preferences in the US and the Chinese furniture market. To further support our sales and marketing functions, we have employed an independent agent and an independent consulting firm in the US to help sell and market our “Morris Holdings Limited” brand sofa products and expand our business in the US. In addition to sales and marketing functions, the agency and consulting company also assists in providing after-sales services, including collecting feedback from customers and consumers, and handling product returns and complaints. The agency and consulting firm also communicated with our Haining R&D center to help determine the latest seasonal themes, colors, appearance, functions and materials used, and identify new trends and changes in the US market. With the support of this agency and consulting company, we have participated in the “High Point Furniture Fair” held in High Point, North Carolina, USA since 2010 by setting up a showroom to promote and market “Morris Holdings Limited” brand sofa products in the US. “High Point Furniture Fair” is a furniture industry trade fair organized by the High Point Market Authority in High Point, North Carolina, USA. Our production facility is located in Haining, Zhejiang, China. As of the last practical date, we operated 15 production lines for sofa products, 25 production lines for sofa covers and 1 production line for other furniture products. As of April 30, 2016, our factory covers a total area of about 100,529 square meters, and can produce about 892,000 sofa products, 1,613,000 sofa covers, and 11,000 other furniture products every year. To expand production capacity, we are preparing to build production facilities at the Sihanoukville Special Economic Zone in Cambodia. The Cambodian facility is expected to be equipped with 5 sofa product production lines and 9 sofa cover production lines, with an estimated annual production capacity of about 95,000 sofa products and 145,000 sofa covers, respectively. Of the 9 sofa cover production lines, 6 will be used to produce and assemble sofa covers for our own sofa products, while the remaining 3 will be used to produce sofa covers that will be sold directly to customers. After the Cambodian production facility is fully put into operation in 2017, the production capacity of our sofa products and sofa covers is estimated to increase by about 10.7% and 9.0% respectively over the year ended December 31, 2015. For the year ended 31 December 2013, 2014 and 2015, and for the four months ended April 30, 2016, our revenue was approximately RMB 984 million, RMB 824.7 million, RMB 926.5 million and RMB 250.5 million, respectively, while our net profit was approximately RMB 33.5 million, RMB 24.4 million, RMB 83.1 million and people, respectively $5.8 million. The US market is our main export market. Sales revenue from the US market accounted for more than 90% of our revenue for the year ended 2013, 2014, and December 31, 2015, and over 85% of our revenue for the four months ended April 30, 2016. We intend to continue to use our competitive advantages to enhance the brand awareness and market recognition of our “Morris Holdings Limited” and “Morris Zou” brands by expanding our sales and distribution network, increasing production capacity at our facilities in Cambodia, and increasing sales and marketing efforts.