Core Viewpoint - The company has reached a settlement in a legal dispute involving its wholly-owned subsidiary, which will positively impact its financial position by recovering a significant amount of previously written-off bad debts [2][11]. Summary by Sections Legal Proceedings Overview - The lawsuit involves Guangzhou Jiete Biological Filtration Co., Ltd.'s subsidiary, Guangzhou Baifeier Air Purification Materials Co., Ltd., as the plaintiff in a contract dispute with Shandong Dayong New Materials Co., Ltd. [2][4]. - The total amount involved in the case is approximately 10,866,391.80 yuan, excluding additional costs [3]. Settlement Agreement - A settlement agreement was reached where Shandong Dayong will pay 6,470,000 yuan to Baifeier, covering all related costs and fees [11]. - The agreement stipulates that both parties will not pursue any further claims against each other regarding this dispute [11][12]. Financial Impact - The company had previously made provisions for bad debts amounting to 7,533,582.08 yuan related to this case, which will now be reversed following the settlement [12]. - The company also recorded a provision for inventory depreciation of 3,208,618.86 yuan for PTFE composite mask non-woven fabric [12]. Future Actions - Following the receipt of the settlement amount, the company will apply to withdraw its legal claims and terminate the execution of the contract dispute [11][12].