HUANXI MEDIA (01003) plans to issue 731 million subscription shares to PHANCY (06682) and enter into a strategic cooperation and joint venture framework agreement.

HUANXI MEDIA (01003) announced on May 19, 2026, that the company has entered into a subscription agreement with Phancy International Limited (the subscriber) (PHANCY (06682)'s wholly-owned subsidiary). The subscriber has conditionally agreed to subscribe, and the company has conditionally agreed to issue and distribute 7.31 billion subscription shares to the subscriber at a subscription price of HK$0.275 per subscription share. On May 19, 2026, the company and PHANCY entered into a strategic cooperation and joint venture framework agreement. The agreement stipulates that both parties plan to establish a strategic partnership by establishing a joint venture as a cooperation platform through combining the industry advantages of the company in the film and television field and PHANCY's professional capabilities in artificial intelligence (AI), in areas such as film and television creation, interactive entertainment, game development, intellectual property derivatives, etc. The two parties will have the opportunity to cooperate in the following areas: (i) Data cooperation: The company will provide relevant data for AI solutions and model training in the film and television field; (ii) Model and agent development: Promote the research and development of large models and agents in the film and television field; (iii) Scenario cooperation: Explore the implementation of AI solutions in the field of new entertainment; (iv) Joint production and production: Use AI technology to complete the joint production of film and television content, as well as the development of related intellectual property derivatives, digital actor development and actor brokerage, AI simulation drama series, interactive film and games, etc.; (v) Resource cooperation: Explore establishing resource cooperation; and (vi) Large model application programming interface (API) services: The company intends to use the license of large model API on the PHANCY platform and pay fees to PHANCY based on Token consumption. Within three years of the effectiveness of the strategic cooperation and joint venture framework agreement, the estimated total targeted service amount to be paid to PHANCY based on Token consumption is expected to be no less than $200 million USD. Detailed terms are subject to a separate binding "Large Model API Service Framework Agreement" to be signed by both parties. On May 19, 2026, the company entered into the first service agreement with Phancy International Limited (the service provider) regarding the large model API service. The service provider will provide various large model API services to the group for a total price of $20 million USD (equivalent to approximately HK$157 million), billed according to the Token consumption when AI is applied in film and television production. The agreement is valid for two years. The above agreements are the first formal procurement cooperation agreement signed by both parties. Subsequent to this, the two parties will negotiate and enter into subsequent procurement agreements based on the actual Token consumption scale and business progress in due course.