SYNAGISTICS (02562) entered into a legally binding exclusive option agreement to acquire up to 100% equity interest in a Chinese AI company.

SYNAGISTICS (02562) Announcement, on March 31, 2025, the Company as the offeree and the shareholders of the target company as the grantor (grantor) entered into a Subscription Agreement (Subscription Agreement), whereby the grantor agrees to grant the Company a subscription option (Subscription Option) to acquire up to 100% equity interest in Meitu Digital Technology (Suzhou) Co., Ltd. (Meitu Digital Technology or "Target Company," together with its subsidiaries collectively referred to as the "Target Group"). Each grantor has undertaken to the Company that for the three fiscal years ending on December 31, 2027, the total revenue of the Target Company shall not be less than RMB 540 million (secured revenue) and the net profit after tax of the Target Company shall not be less than RMB 66 million (secured net profit after tax). The AI transformation sector in China is expected to continue to grow in the near future. According to data from CCID CONSULTING (a market research company), by 2035, the market size of the AI transformation sector in China will reach USD 238.4 billion (approximately RMB 1.83 trillion). As more and more Chinese enterprises invest in digital solutions to adapt their business processes to future demands, the Company believes the new data economy will become a key driver of economic growth in China. Considering the positive outlook of the industry in which the Target Company operates, the Company signed a term sheet on January 23, 2025, regarding the proposed acquisition of the Target Company (see the announcement released by the Company on January 23, 2025). After signing the term sheet, the Company continued discussions with the Target Company and finally reached an agreement to grant the Company a subscription option, the exercise of which is entirely at the Company's discretion. If the Company exercises the subscription option and completes the acquisition of the Target Company, it will not only provide the Company with a base of more than 1200 corporate and brand customers but also help it expand its digital business to the Southeast Asian market, promoting the expansion and growth of the Company and the Target Group's businesses. The Target Group currently has over 300 software engineers, AI experts, and data scientists. This top-notch team of experts will provide technical support to the Company, and by combining the technological stacks of the Target Group and the Company itself, both parties will be able to provide customers with more integrated and advanced AI, big data, and technology solutions. If the subscription option is exercised and the potential acquisition of the Target Company is completed, given that the Target Group is currently profitable, this will also create additional sources of income for the Company and may enhance its financial performance. Furthermore, as announced by the Company on March 6, 2025, the Company has entered into an exclusive joint venture agreement with the Target Company to jointly develop and launch Geene a revolutionary AI platform that integrates generative AI, blockchain, and big data technologies to create a secure, efficient, and trustworthy enterprise-level AI ecosystem. Both parties have successfully launched Geene TurboGT one of the fastest generative AI applications globally, with a response time of less than 1 second, receiving rave reviews from online user communities. The Company believes that a successful acquisition of the Target Company will further generate breakthrough synergies and opportunities, such as the launch of Geene, which has received enthusiastic market feedback since its release. The Subscription Agreement marks the Company's continuous search for business opportunities and partnerships to further strengthen its existing business towards enhancing shareholder value as the ultimate goal.