CIPRUN TECH (01020) subsidiary plans to issue 1.45 billion shares at a discount of approximately 2.4% to acquire all the equity of Jiangsu Oursoft Information Technology Co., Ltd.

CIPRUN TECH (01020) announced that on August 21, 2026, the company, the buyer, Alpha Enterprise Holdings Limited (a wholly-owned subsidiary of the company), and the seller, Mr. Meng Defeng, entered into a sales agreement, pursuant to which the buyer conditionally agrees to purchase, and the seller conditionally agrees to sell, the sale shares for a consideration of RMB 250 million (approximately HKD 290 million). The sale shares will be issued and allocated to the seller upon completion of the reorganization, and all ordinary shares in the issued share capital of the British Virgin Islands special purpose company registered under the seller's name, i.e., the entire issued share capital of the British Virgin Islands special purpose company at the time of the reorganization's completion, will be sold by the seller to the buyer according to the sales agreement; and the British Virgin Islands special purpose company shall, upon completion of the reorganization and at completion, directly or indirectly hold all the equity of the target company, Jiangsu Ouyuan Information Technology Co., Ltd. As a condition to completion, the reorganization must be completed, resulting in the seller being the sole registered and legal owner of the entire issued share capital of the British Virgin Islands special purpose company immediately prior to completion, and the British Virgin Islands special purpose company shall indirectly hold all the equity of the target company through a Hong Kong special purpose company and the target foreign-invested enterprise. Upon completion, the Group will hold the entire issued share capital of the British Virgin Islands special purpose company. Consequently, the target company will become a wholly-owned subsidiary of the company, with the financial performance of the reorganized target group consolidated into the company's financial statements. The consideration shares will be allocated and issued based on a special authorization to be sought at the shareholders' extraordinary general meeting. The company will apply to the Stock Exchange for the approval to list and trade the consideration shares. Upon completion, the company will allocate and issue the consideration shares to the seller (or their nominee) at the issue price, which amounts to 1.45 billion new shares. The issue price of the consideration shares is HKD 0.20 per share, which represents a discount of approximately 2.4% from the closing price of HKD 0.205 per share reported on the Stock Exchange on the date of the sales agreement. The Directors believe that the acquisition will bring significant strategic advantages to the Group, especially in enhancing the Group's operational efficiency, particularly in services related to intellectual property (IP). By integrating the target company's expertise in automation solutions into the Group's insightful IP-related services, the Group can drive the automation of its IP application agency and registration services, as well as IP transaction facilitation services, which currently involve highly labor-intensive tasks (such as manually searching historical patent registrations), thereby freeing the Group's existing human resources for more customer service work and/or reducing the Group's labor costs, thus improving efficiency and subsequently enhancing the Group's profitability. The acquisition will also present opportunities for product/service diversification, allowing the Group to expand its service scope and provide a broader range of solutions. This diversification can attract new customers seeking comprehensive support and create valuable cross-selling opportunities for the Group's existing customer base, which includes patent holders engaged in manufacturing operations who may benefit from the target company's services, thereby promoting synergies between the Group's existing IP business and the target company's existing IP business and exploring potential new business opportunities. In the future, the Directors expect the Group to demonstrate success in the AI-driven automation IP-related services sector and to cross-sell intelligent IP-related services to the Group's existing and new customers. Leveraging their respective core strengths, both parties will achieve deep synergies and mutual prosperity, establishing a core barrier in the intellectual property (IP) AI space that is difficult for others to replicate. Strategically, the acquisition will bring multifaceted value enhancement to the Group: from an industrial chain perspective, the Group can leverage cutting-edge AI expertise to optimize its business layout and accelerate the transformation from a labor-intensive model to a data-driven intelligent model, thereby enhancing its core competitiveness; from a service perspective, by deploying advanced AI technology, the Group can effectively enhance the operational efficiency of on-site employees across multiple locations in China (specifically, the Group's IP transaction facilitation services are provided through an online platform and supported by on-site employees at several locations, including Beijing, Tianjin, and Suzhou), more effectively meeting customer demands; and from an industrial position perspective, the acquisition will help the Group seize growth opportunities in the intellectual property (IP) AI sector, consolidate its first-mover advantage, drive robust business expansion, and strengthen its leading position in China's intellectual property (IP) AI industry.