PHANCY (06682) and HUANXI MEDIA enter into strategic cooperation, planning to sign a $20 million API service framework agreement and subscribe to 731 million shares of HUANXI MEDIA.

PHANCY (06682) announces that on May 19, 2026 (after market close), the company has entered into a strategic cooperation and joint venture framework agreement (Framework Agreement) with HUANXI MEDIA Group Limited (HUANXI MEDIA). Under this agreement, the two parties plan to establish a strategic partnership through the establishment of a joint venture as a cooperation platform, combining the company's expertise in artificial intelligence and HUANXI MEDIA's industry advantages in the film and television sector, in areas such as film and television production, interactive entertainment, game development, and intellectual property derivatives. The parties will have the opportunity to collaborate in the following areas: (i) Data cooperation: HUANXI MEDIA will provide relevant data for AI solutions and model training in the film and television sector; (ii) Model and agent development: advancing the research and development of large models and agents in the film and television sector; (iii) Scene cooperation: exploring the implementation of AI solutions in the new entertainment sector; (iv) Joint production and production: using AI technology to complete joint production of film and television content, as well as the development of related intellectual property, digital actor development, actor management, AI simulated drama series, interactive film and game, etc.; (v) Resource cooperation: exploring the establishment of resource cooperation; and (vi) Large-scale model API services: HUANXI MEDIA intends to use the rights to use large-scale model APIs on the company's platform, and pay fees to the company based on Token consumption. The total target service amount to be paid to the company based on Token consumption is expected to be no less than two hundred million US dollars (USD 200 million) within three years from the effective date of the Framework Agreement. On May 19, 2026 (after the trading session), the company's wholly-owned subsidiary Phancy International Limited (Phancy International) entered into a Large-Scale Model Application Interface (API) Service Framework Agreement (API Service Framework Agreement) with HUANXI MEDIA regarding API services. Under this, Phancy International will provide various API services to HUANXI MEDIA, with a total price of 20 million US dollars (equivalent to approximately 157 million Hong Kong dollars, converted at an exchange rate of 1.00 US dollars to 7.85 Hong Kong dollars). The fees will be based on the amount of Tokens consumed by HUANXI MEDIA and its subsidiaries when applying AI to film and television production, the agreement will be valid for two years. HUANXI MEDIA will make a prepayment to Phancy International within five business days of receiving the payment notice from the group. The API Service Framework Agreement is the first official procurement cooperation agreement between the two parties, and subsequent agreement will be negotiated based on the actual consumption scale of Tokens and business progress. On May 19, 2026 (after market close), Phancy International entered into a subscription agreement with HUANXI MEDIA, under which Phancy International has conditionally agreed to subscribe for 7.31 billion shares of HUANXI MEDIA (Subscription Shares) at a price of HK$0.275 per share (Subscription). The completion of the Subscription is subject to a series of conditions, including but not limited to approval from the Listing Committee of the Stock Exchange of Hong Kong (SEHK) for the listing and trading of the Subscription Shares. After the completion of the Subscription, Phancy International will hold approximately 14.30% of the total issued shares of HUANXI MEDIA following the expansion of the issued shares through the Subscription. HUANXI MEDIA is an investment holding and film investment company registered in Bermuda, with its shares listed on the SEHK (stock code: 1003). Its subsidiaries mainly engage in media and entertainment-related businesses, including film and television copyright production and investment, as well as operation of online video platforms. The Subscription will focus on deep cooperation in areas such as data co-creation, model development, scene implementation, content co-creation, resource linkage, and technical services in the field of artificial intelligence + cultural and creative content, in order to increase the overall revenue of the group.