联众(06899) - 2025 - 中期财报

Management Discussion and Analysis The Group deepened its global intelligent sports and entertainment strategy in H1 2025, showing resilience and growth, despite increased loss attributable to equity holders due to rising expenses and associate losses, and tightening liquidity Business Review In H1 2025, the Group maintained its strategic focus on intelligent sports and entertainment, demonstrating strong resilience and growth through AI integration, game upgrades, and expansion into intellectual sports events and sports parks - The Group deepened its global intelligent sports and entertainment strategic positioning, with core businesses demonstrating resilience and growth momentum[5][9] - Traditional PC business 'OurGame Lobby' enhanced user activity and experience through community building, new category introduction, and AI and anti-cheating system upgrades; mobile board and casual games performed well[6][9] - Actively promoted deep integration of AI technology with business, comprehensively upgraded cloud architecture, introduced large AI models like DeepSeek and ChatGPT, significantly improving art development and operational efficiency, and explored AI empowerment for traditional board and card games[7][10] - In innovative businesses, subsidiary Huayang Intellectual Sports Technology focuses on intellectual sports events and content production, with its Mahjong event IP 'Sichuan Mahjong Star League' setting a new record of over 110,000 concurrent online viewers[11][14] - Signed a cooperation agreement with Youku to introduce event content to the platform; collaborated with the Danzhou government in Hainan to host the 'Intellectual Masters Tournament' in Huanxinying Bay, promoting regional development through an 'event + industry + culture and tourism' model[12][15] - Wholly-owned subsidiary OurGame Sports (Beijing) Co., Ltd. is advancing the construction and operation of OurGame Sports Park, aiming to create a comprehensive sports platform integrating sports venues, event hosting, youth training, and sports social interaction to expand diversified revenue streams[13][15] - Ecosystem construction balances international vision with localized operations, introducing the 'AGAE Overseas Esports League' to the Youku platform[16][20] - Looking ahead, the Group will continue to cultivate its core advantages in board and card games, accelerate innovative business development, and strive to become a unique 'leader in the intellectual sports ecosystem' within China's sports industry[17][20] Financial Review The Group's loss attributable to equity holders increased to RMB 38.2 million in H1 2025, primarily due to a 13.8% revenue decrease, 108.3% surge in selling and marketing expenses, 13.7% rise in administrative expenses, and a 62.1% increase in share of associate losses, leading to a deteriorated liquidity ratio from 1.68 to 1.0 - For the six months ended June 30, 2025, the loss attributable to equity holders of the Company was RMB 38.2 million, an increase from RMB 19.8 million in the same period of 2024[18][21] - The increased loss was primarily due to higher selling expenses, new product R&D expenses, significant professional fees related to resumption of trading, and increased share of losses from associate AGAE due to litigation costs[18][21] 1. Overview In H1 2025, the Group's loss attributable to equity holders increased to RMB 38.2 million from RMB 19.8 million in H1 2024, driven by higher sales, R&D, and professional fees, alongside increased associate losses from litigation Loss Attributable to Equity Holders H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss attributable to equity holders | 38.2 | 19.8 | 18.4 | 92.9% | - The increased loss was primarily due to higher selling expenses, new product R&D expenses, significant professional fees related to resumption of trading, and increased share of losses from associate AGAE due to litigation costs[18][21] 2. Revenue In H1 2025, the Group's revenue decreased by 13.8% to RMB 43.2 million from RMB 50.2 million in H1 2024, mainly due to lower ARPU from OurGame Lobby and MCN business not fully reflecting in revenue Group Revenue Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 43.2 | 50.2 | (7.0) | (13.8%) | - The revenue decline was primarily due to lower ARPU from OurGame Lobby, leading to an overall revenue reduction, and the MCN business activity not yet fully translating into revenue[19][22] 3. Cost of Revenue and Gross Profit Margin In H1 2025, the Group's cost of revenue decreased by 9.8% to RMB 20.9 million, while gross profit margin declined from 53.8% to 51.7%, mainly due to reduced revenue from the higher-margin OurGame Lobby Cost of Revenue and Gross Profit Margin Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of revenue | 20.9 | 23.2 | (2.3) | (9.8%) | | Gross profit margin | 51.7% | 53.8% | (2.1) percentage points | (3.9%) | - The decline in gross profit margin was primarily due to reduced revenue from the higher-margin OurGame Lobby[23][28] 4a. Other Income In H1 2025, the Group's other income decreased by 25.7% to RMB 2.1 million from RMB 2.8 million in H1 2024, mainly due to lower bank interest income and revenue from providing board and card game venues Other Income Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other income | 2.1 | 2.8 | (0.7) | (25.7%) | - The decrease was primarily due to lower bank interest income and reduced revenue from providing board and card game venues[24][29] 4b. Other Gains and Losses In H1 2025, the Group's other losses were RMB 0.1 million, a slight fluctuation from RMB 0.2 million in H1 2024 Other Gains and Losses Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other losses | 0.1 | 0.2 | (0.1) | (50.0%) | 5. Selling and Marketing Expenses In H1 2025, the Group's selling and marketing expenses increased by 108.3% to RMB 12.5 million from RMB 6.0 million in H1 2024, primarily due to increased promotional and marketing activities Selling and Marketing Expenses Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Selling and marketing expenses | 12.5 | 6.0 | 6.5 | 108.3% | - The increase in expenses was primarily due to increased promotional and marketing activities during the period[26][31] 6. Administrative Expenses In H1 2025, the Group's administrative expenses increased by 13.7% to RMB 17.4 million from RMB 15.3 million in H1 2024, mainly due to increased expenses related to the resumption of trading since July 2024 Administrative Expenses Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 17.4 | 15.3 | 2.1 | 13.7% | - The increase in expenses was primarily due to increased costs related to the resumption of trading incurred since July 2024[27][32] 7. Research and Development Expenses In H1 2025, the Group's R&D expenses increased by 49.0% to RMB 5.5 million from RMB 3.7 million in H1 2024, driven by intensified efforts to update and develop new versions of online games Research and Development Expenses Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | 5.5 | 3.7 | 1.8 | 49.0% | - The increase in expenses was due to the Group's intensified efforts to update existing online game versions and increase R&D investment in new versions[33][38] 8. Share of Losses of Associates, Net In H1 2025, the Group's share of losses of associates, net, increased by 62.1% to RMB 23.5 million from RMB 14.5 million in H1 2024, primarily due to increased litigation costs incurred by associate AGAE Share of Losses of Associates, Net Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Share of losses of associates, net | 23.5 | 14.5 | 9.0 | 62.1% | - The increase in losses was primarily due to associate AGAE incurring higher litigation costs during the period[34][39] 9. Fair Value Changes of Financial Assets at Fair Value through Profit or Loss In H1 2025, the Group had no fair value changes of financial assets at fair value through profit or loss, compared to a RMB 10.2 million loss in H1 2024 Fair Value Changes of Financial Assets at Fair Value through Profit or Loss Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Fair value changes | 0 | (10.2) | 10.2 | 10. Loss Attributable to Equity Holders of the Company In H1 2025, the loss attributable to equity holders of the Company increased to RMB 38.2 million from RMB 19.8 million in H1 2024 Loss Attributable to Equity Holders of the Company Comparison | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss attributable to equity holders | 38.2 | 19.8 | 18.4 | 92.9% | 11. Income Tax Expense The Group incurred no income tax expense for the six months ended June 30, 2025, consistent with the prior year period - For the six months ended June 30, 2025, the Group incurred no income tax expense[37][42] 12. Liquidity and Source of Funding and Borrowing As of June 30, 2025, the Group's total bank balances and cash decreased by 6.7% to RMB 12.7 million, with the current ratio falling from 1.68 to 1.0 and the gearing ratio increasing from zero to 21.2%, indicating tightening liquidity Liquidity Metrics Comparison | Metric | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank balances and cash | 12.7 | 13.6 | (0.9) | (6.7%) | | Current assets | 30.3 | 47.7 | (17.4) | (36.5%) | | Current liabilities | 30.4 | 28.3 | 2.1 | 7.4% | | Current ratio | 1.0 | 1.68 | (0.68) | (40.5%) | | Gearing ratio | 21.2% | 0% | 21.2 percentage points | N/A | - The Group intends to primarily fund future expansion, investments, and operations through internal resources, but may explore other financing sources when appropriate[43][46] 13. Material Investments In H1 2025, the Group acquired a property in China with a fair value of RMB 5.63 million, which was pledged for outstanding loans and interest and served as partial settlement - The Group acquired a property in China with a fair value of RMB 5.63 million, which was pledged for outstanding loans and interest and served as partial settlement[44][47] 14. Material Acquisitions The Group had no material acquisitions for the six months ended June 30, 2025, other than those disclosed in this interim report - Other than as disclosed in this interim report, the Group had no material acquisitions for the six months ended June 30, 2025[45][48] 15. Financial Assets at Fair Value through Profit or Loss As of June 30, 2025, the Group's financial assets at fair value through profit or loss remained at RMB 14.2 million, primarily comprising direct equity investments in game/intellectual sports tech startups and private equity funds, with no dividends paid during the period Financial Assets at Fair Value through Profit or Loss | Metric | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Financial assets (FVTPL) | 14.2 | 14.2 | 0 | - Investments aim to complement the game portfolio, explore new business opportunities, generate strategic operational synergies, and gain expertise and scale through external financial resources[49][51] - These primarily include direct equity investments in startups focused on game or intellectual sports-related technology R&D, and direct subscriptions to private equity funds for early-stage financing in the intellectual sports sector[50][51] - No dividends were paid by the aforementioned investee companies for the six months ended June 30, 2025[53][55] 16. Material Disposals The Group had no material disposals for the six months ended June 30, 2025, other than those disclosed in this interim report - Other than as disclosed in this interim report, the Group had no material disposals for the six months ended June 30, 2025[57][58] 17. Pledge of Assets As of June 30, 2025, the Group had no pledge of assets, consistent with the situation on December 31, 2024 - As of June 30, 2025, the Group had no pledge of assets[59][65] 18. Contingent Liabilities As of June 30, 2025, the Group had no material contingent liabilities, consistent with the situation on December 31, 2024 - As of June 30, 2025, the Group had no material contingent liabilities[60][66] 19. Foreign Exchange Exposure The Group primarily operates in China with most transactions settled in RMB, thus incurring no significant foreign exchange exposure as of June 30, 2025 - The Group primarily operates in China, with most transactions settled in RMB, and thus had no significant foreign exchange exposure as of June 30, 2025[61][67] 20. Employees' Remuneration and Policy As of June 30, 2025, the Group had 76 employees, with total remuneration expenses for H1 2025 decreasing by 27.5% to RMB 9.5 million compared to H1 2024 Employee Information and Remuneration Comparison | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of Employees | 76 | N/A | N/A | | Total Remuneration Expenses (RMB million) | 9.5 | 13.1 | (27.5%) | 21. Events Occurred Since the End of the Six Months Ended 30 June 2025 Other than as disclosed in this interim report, the Group had no significant events occurring since the end of the six months ended June 30, 2025 - Other than as disclosed in this interim report, the Group had no significant events occurring since the end of the six months ended June 30, 2025[63][69] 22. Future Plans for Material Investment or Capital Assets Other than as disclosed in this interim report, the Group has no other future plans for material investments or capital assets - Other than as disclosed in this interim report, the Group has no other future plans for material investments or capital assets[64][70] Other Information This section covers corporate governance, share incentive schemes, and material legal proceedings, including loan disputes, arbitration enforcement, and two lawsuits against associate AGAE, all ongoing Interim Dividend The Board did not declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year period - The Board did not declare any interim dividend for the six months ended June 30, 2025[71][73] Directors' and Chief Executives' Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company As of June 30, 2025, Mr. Lu Jingsheng held 2.04% of the Company's shares, and Ms. Xu Jin held 0.10% (including share options and awarded shares), with Ms. Xu appointed Executive Director and CEO on March 1, 2025 Directors' and Chief Executives' Shareholdings (June 30, 2025) | Director Name | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate Percentage of the Company's Interest | | :--- | :--- | :--- | :--- | | Mr. Lu Jingsheng | Beneficial Owner | 22,000,000 | 2.04% | | Ms. Xu Jin | Beneficial Owner | 1,100,000 | 0.10% | - Ms. Xu Jin was appointed Executive Director and Chief Executive Officer effective March 1, 2025[75] Substantial Shareholders' Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company As of June 30, 2025, Bright Wisdom Holdings Limited was the largest beneficial owner with 27.08% of shares, while Caixin Investment Co., Ltd. held 17.27% beneficial interest and 3.36% other voting rights, and Jianying OurGame High Growth Investment Fund held 18.60% Substantial Shareholders' Shareholdings (June 30, 2025) | Shareholder Name/Entity | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate Percentage of the Company's Interest | | :--- | :--- | :--- | :--- | | Caixin Investment Co., Ltd. | Beneficial Owner | 186,088,706 | 17.27% | | Caixin Investment Co., Ltd. | Other (Voting Rights) | 36,235,351 | 3.36% | | Mr. Li Yangyang | Beneficial Owner | 21,290,000 | 1.98% | | Mr. Li Yangyang | Interest in Controlled Corporation | 222,324,057 | 20.63% | | Mr. Li Yangyang | Other (Voting Rights) | 75,688,536 | 7.02% | | Bright Wisdom Holdings Limited | Beneficial Owner | 291,919,848 | 27.08% | | Mr. Yang Qing | Beneficial Owner | 36,531,064 | 3.39% | | Mr. Yang Qing | Interest in Controlled Corporation | 221,653,555 | 20.57% | | Mr. Ng Kwok Leung | Beneficial Owner | 36,531,064 | 3.39% | | Mr. Ng Kwok Leung | Interest in Controlled Corporation | 221,653,555 | 20.57% | | Mr. Zhang Peng | Beneficial Owner | 12,884,425 | 1.20% | | Mr. Zhang Peng | Interest in Controlled Corporation | 221,653,555 | 20.57% | | Jianying OurGame High Growth Investment Fund | Beneficial Owner | 200,502,555 | 18.60% | - The 291,919,848 shares held by Bright Wisdom Holdings Limited refer to the same batch of shares held by a series of owners including Bright Wisdom Holdings Limited[86] Share Option Schemes The Company has three share option schemes, with the pre-IPO employee and management schemes expiring on March 6, 2024; the 2014 scheme aims to incentivize key employees and directors, with 41,743,839 options lapsing and 20,370,000 remaining unexercised in H1 2025 2014 Share Option Scheme The 2014 Share Option Scheme aims to provide eligible persons with an opportunity to acquire ownership interests in the Company; as of June 30, 2025, 20,370,000 options remained unexercised, with 41,743,839 options lapsing during the period, primarily from former directors and employees - The 2014 Share Option Scheme aims to provide key employees, directors, or senior officers of the Group with an opportunity to acquire ownership interests in the Company and encourage them to strive to enhance the value of the Company and its shares for the overall benefit of the Company and its shareholders[88][90] 2014 Share Option Scheme Movements (H1 2025) | Category of Grantees | Outstanding as at Jan 1, 2025 | Granted during the period | Exercised during the period | Cancelled during the period | Lapsed during the period | Outstanding as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | 31,360,000 | — | — | — | (23,520,000) | 7,840,000 | | Employees | 30,753,839 | — | — | — | (18,223,839) | 12,530,000 | | Total | 62,113,839 | — | — | — | (41,743,839) | 20,370,000 | - As of June 30, 2025, the total number of share options available for grant under the 2014 Share Option Scheme was zero[94][98] Share Award Scheme The Company's 2017 Share Award Scheme aligns eligible persons' interests with long-term Group growth; as of June 30, 2025, 17,071,153 awards were authorized, with 725,000 awarded shares unexercised and 37,288,483 shares vested, with no new awards granted, vested, cancelled, or lapsed in H1 2025 - The Share Award Scheme aims to align the interests of eligible persons with those of the Group through share ownership, dividends, and other distributions made in respect of shares and/or enhancement of share value, to encourage and retain eligible participants to contribute to the long-term development and profitability of the Group[95][99] Number of Awards Available for Grant under Share Award Scheme | Metric | Jan 1, 2025 | June 30, 2025 | | :--- | :--- | :--- | | Number of Awards Available for Grant | 17,071,153 | 17,071,153 | Share Award Scheme Movements (H1 2025) | Category of Grantees | Outstanding as at Jan 1, 2025 | Granted during the period | Vested during the period | Cancelled during the period | Lapsed during the period | Outstanding as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors/Former Directors | 250,000 | — | — | — | — | 250,000 | | Employees | 475,000 | — | — | — | — | 475,000 | | Total | 725,000 | — | — | — | — | 725,000 | - As of June 30, 2025, 37,288,483 shares were vested[230][234] Purchase, Sale or Redemption of the Company's Listed Securities For H1 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares as of June 30, 2025 - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[103][109] - As of June 30, 2025, the Company held no treasury shares[104][109] Corporate Governance The Company complied with the Corporate Governance Code in H1 2025, correcting a deviation from C.2.1 (separation of Chairman and CEO roles) on March 1, 2025, with Ms. Xu Jin appointed CEO and Mr. Lu Jingsheng transitioning to CFO while retaining the Chairman role - The Company has complied with the applicable code provisions of the Corporate Governance Code, except for a deviation from code provision C.2.1 (the roles of chairman and chief executive should be separate and should not be performed by the same individual)[106][110] - Effective March 1, 2025, Ms. Xu was appointed Executive Director and Chief Executive Officer, and Mr. Lu Jingsheng transitioned from Chief Executive Officer to Chief Financial Officer while continuing as Executive Director and Chairman of the Board, thus separating the roles of Chairman and Chief Executive Officer[107][110] Model Code All Directors confirmed strict compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - Following specific inquiries made to all Directors, all Directors confirmed their strict compliance with the required standards set out in the Model Code for the six months ended June 30, 2025[112][116] Audit Committee The Company's Audit Committee, comprising three independent non-executive directors (Mr. Zhang Li as Chairman), reviewed the Group's unaudited condensed consolidated interim results and report for H1 2025, with external auditors UHY Certified Public Accountants also conducting a review under ISRE 2410 - The Audit Committee comprises Mr. Zhang Li (Chairman), Mr. Ma Shaohua, and Mr. Dai Bing (all independent non-executive Directors)[113][117] - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results and interim report for the six months ended June 30, 2025[115][117] - External auditors UHY Certified Public Accountants have reviewed the condensed consolidated financial statements in accordance with International Standard on Review Engagements 2410[114][117] Material Litigation The Group is involved in several material legal proceedings, including arbitration against Merit Horizon for loan default, enforcement of an arbitration award against Spoville for convertible bonds, and two lawsuits by Knighted Pastures against associate AGAE concerning corporate governance and strategic investments, all of which are ongoing Loan to Fast Express Trading Limited ("Fast Express") The Company provided a HKD 62.48 million loan to Fast Express in 2018, which Merit Horizon agreed to repay with Ms. Fu Qiang's guarantee, but both defaulted; the Company initiated arbitration against Merit Horizon for HKD 97.9 million and civil lawsuits in Hong Kong, with arbitration hearings completed in early June 2025, awaiting a ruling - The Company provided a loan totaling HKD 62,484,799 to Fast Express in 2018, which Fast Express failed to repay on schedule[118][119] - Merit Horizon agreed to repay the loan, and Ms. Fu Qiang provided a joint and several guarantee, but both failed to fulfill their contractual obligations[118][119] - The Company initiated arbitration proceedings against Merit Horizon in the Hong Kong Arbitration Tribunal, claiming a total of not less than HKD 97,948,090.47[120][122] - The Company filed civil lawsuits in the Hong Kong High Court against Bright Wisdom, Ms. Fu, and Mr. Gao, seeking repayment of loan principal and interest, and claiming damages for breach of fiduciary duties[121][123] - Arbitration proceedings are ongoing, with significant hearings completed in early June 2025, but no ruling has been issued yet[120][122] Arbitration Proceedings against Spoville Co., Ltd. ("Spoville") The Company initiated ICC arbitration against Spoville and its major shareholder regarding a convertible bond subscription agreement, resulting in a March 2023 award for KRW 2,184,541,667 principal and interest, RMB 727,468 legal fees, and USD 85,000 arbitration costs; the Company is actively enforcing this award in South Korean courts, which recognized and ordered enforcement in May 2024 - The Company initiated arbitration proceedings against Spoville and its major shareholder with the ICC International Court of Arbitration regarding a convertible bond subscription agreement and obtained a final award on March 20, 2023[125][128] Key Contents of ICC Arbitration Award | Award Content | Amount | | :--- | :--- | | Convertible Bond Principal and Interest (as of Aug 18, 2019) | 2,184,541,667 KRW | | Corresponding Interest (Aug 19, 2019 to Mar 18, 2023, 1% p.a.) | Approximately 78 million KRW | | Legal and Translation Fees | 727,468 RMB | | Arbitration Costs | 85,000 USD | | Additional Interest (from Mar 20, 2023 until full payment) | At rate stipulated by Hong Kong Arbitration Ordinance | - The South Korean court ruled to recognize and enforce the arbitration award in May 2024, and further asset inquiries are underway to apply for compulsory enforcement[131][137] Litigation from Knighted Pastures, LLC ("Knighted") Knighted, AGAE's second-largest shareholder, filed two lawsuits: the first (March 2024) alleging breach of fiduciary duties by AGAE directors was mostly dismissed, but Knighted was awarded USD 3 million in legal fees; the second (November 2024) alleging breach of fiduciary duties in a strategic investment was stayed in April 2025 pending AGAE's AGM results, with no voting on board composition changes allowed - Knighted filed the first lawsuit against AGAE and its directors in March 2024, alleging breach of fiduciary duties related to a share purchase agreement and amendments to the company's articles of association[258][259][260] - The court dismissed most of the lawsuit in June 2024, but Knighted was awarded USD 3 million in legal fees in August 2024, which has been paid by AGAE[261][262][264] - Knighted filed a second lawsuit in November 2024, alleging breach of fiduciary duties by AGAE directors in approving a strategic investment with Yellow River Capital Group and related securities purchase agreements[263][265] - In April 2025, the court approved a stay of the second lawsuit proceedings until the results of AGAE's joint shareholders' meeting are announced; in August 2025, the U.S. court ordered that the AGAE shareholders' meeting not be postponed and that no votes be cast on changes to the board composition[266][267][269][270] - AGAE cannot reasonably estimate the amount or range of potential losses from the second Knighted lawsuit and has therefore made no provision[268][270] Qualification Requirement As of June 30, 2025, the Company had no updated disclosure information regarding qualification requirements - As of June 30, 2025, the Company had no updated disclosure information regarding qualification requirements[134][138] Continuing Disclosure Pursuant to Rules 13.18 and 13.21 of the Listing Rules The Company has no other disclosure obligations under Rules 13.18 and 13.21 of the Listing Rules - The Company has no other disclosure obligations under Rules 13.18 and 13.21 of the Listing Rules[135][139] Appreciation The Board, on behalf of all members, extends gratitude to the management team and employees for their tireless efforts, dedication, and support during the period - The Board expresses its gratitude to the management team and employees for their tireless efforts, dedication, and support during the period[136][140] Report on Review of Condensed Consolidated Financial Statements UHY Certified Public Accountants reviewed OurGame International Holdings Limited's condensed consolidated financial statements for H1 2025 under ISRE 2410, concluding no material non-compliance with IAS 34 Introduction UHY Certified Public Accountants reviewed OurGame International Holdings Limited's condensed consolidated financial statements for H1 2025, prepared under IAS 34 and HKEX Listing Rules, with directors responsible for preparation and auditors for review conclusion - UHY Certified Public Accountants has reviewed the condensed consolidated financial statements of OurGame International Holdings Limited and its subsidiaries for the six months ended June 30, 2025[142][143] - The financial statements are prepared in accordance with International Accounting Standard 34 and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[142][143] Scope of Review The review, conducted under ISRE 2410, involves inquiries and analytical procedures, but its scope is substantially narrower than an audit, thus providing no audit opinion - The review was conducted in accordance with International Standard on Review Engagements 2410, with a scope substantially narrower than an audit, thus no audit opinion is expressed[145][147] Conclusion Based on the review, the auditors found no matters suggesting the condensed consolidated financial statements were not prepared in all material respects in accordance with IAS 34 - The review found no matters leading the auditors to believe that the condensed consolidated financial statements were not prepared in all material respects in accordance with International Accounting Standard 34[146][148] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For H1 2025, the Group's loss expanded to RMB 35.086 million from RMB 20.782 million in H1 2024, driven by a 13.8% revenue decrease, 17.18% gross profit decline, doubled selling and marketing expenses, and significantly increased share of associate losses, resulting in a RMB 38.161 million loss attributable to equity holders and RMB 3.56 cents basic loss per share Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 43,236 | 50,155 | (6,919) | (13.8%) | | Cost of revenue | (20,878) | (23,158) | 2,280 | (9.8%) | | Gross profit | 22,358 | 26,997 | (4,639) | (17.2%) | | Other income | 2,111 | 2,842 | (731) | (25.7%) | | Selling and marketing expenses | (12,535) | (5,952) | (6,583) | 110.6% | | Administrative expenses | (17,392) | (15,349) | (2,043) | 13.3% | | Research and development expenses | (5,543) | (3,719) | (1,824) | 49.0% | | Share of losses of associates, net | (23,471) | (14,517) | (8,954) | 61.7% | | Loss before income tax | (35,086) | (20,782) | (14,304) | 68.8% | | Loss for the period | (35,086) | (20,782) | (14,304) | 68.8% | | Loss for the period attributable to owners of the Company | (38,161) | (19,770) | (18,391) | 93.0% | | Basic loss per share (RMB cents) | (3.56) | (1.84) | (1.72) | 93.5% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets decreased from RMB 100.479 million to RMB 66.469 million, with significant reductions in non-current and current assets, a slight increase in current liabilities, resulting in a net current liability of RMB 0.027 million (previously net current asset of RMB 19.368 million), and total equity sharply declining to RMB 32.164 million Summary of Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 36,101 | 52,778 | (16,677) | (31.6%) | | Current assets | 30,368 | 47,701 | (17,333) | (36.3%) | | Total assets | 66,469 | 100,479 | (34,010) | (33.8%) | | Current liabilities | 30,395 | 28,333 | 2,062 | 7.3% | | Non-current liabilities | 3,910 | 5,253 | (1,343) | (25.6%) | | Total liabilities | 34,305 | 33,586 | 719 | 2.1% | | Net assets | 32,164 | 66,893 | (34,729) | (51.9%) | | Equity attributable to owners of the Company | 35,454 | 73,258 | (37,804) | (51.6%) | | Non-controlling interests | (3,290) | (6,365) | 3,075 | (48.3%) | | Total equity | 32,164 | 66,893 | (34,729) | (51.9%) | - The current ratio decreased from 1.68 as of December 31, 2024, to 1.0 as of June 30, 2025[43][46] - Interest in associates significantly decreased, primarily due to the share of losses from AGAE accounted for using the equity method[197][201] Condensed Consolidated Statement of Changes in Equity For H1 2025, the Group's total equity significantly decreased from RMB 66.893 million on January 1, 2025, to RMB 32.164 million, primarily due to a RMB 38.161 million loss attributable to equity holders and a RMB 34.047 million transfer from share option reserve to accumulated losses upon option expiry Summary of Condensed Consolidated Statement of Changes in Equity | Metric | Jan 1, 2025 (RMB thousand) | June 30, 2025 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Share capital | 335 | 335 | 0 | | Share premium | 1,023,563 | 1,023,563 | 0 | | Statutory reserve | 38,441 | 38,441 | 0 | | Translation reserve | 4,231 | 4,554 | 323 | | Share option reserve | 52,381 | 18,334 | (34,047) | | Other reserve | (5,689) | (5,689) | 0 | | Share award reserve | 202 | 236 | 34 | | Accumulated losses | (1,035,075) | (1,039,189) | (4,114) | | Subtotal equity attributable to owners of the Company | 73,258 | 35,454 | (37,804) | | Non-controlling interests | (6,365) | (3,290) | 3,075 | | Total equity | 66,893 | 32,164 | (34,729) | - A loss of RMB 38.161 million for the period and a transfer of RMB 34.047 million from share option reserve upon expiry significantly reduced equity[157] Condensed Consolidated Statement of Cash Flows For H1 2025, the Group's cash and cash equivalents saw a net decrease of RMB 0.913 million, contrasting with a net increase of RMB 4.714 million in H1 2024, with cash used in operating activities increasing to RMB 8.895 million, cash generated from investing activities at RMB 4.701 million (mainly from loan repayments), and cash from financing activities at RMB 3.281 million (primarily from bank loans) Summary of Condensed Consolidated Statement of Cash Flows | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (8,895) | (4,580) | (4,315) | | Net cash generated from investing activities | 4,701 | 1,359 | 3,342 | | Net cash generated from financing activities | 3,281 | 7,935 | (4,654) | | Net (decrease)/increase in cash and cash equivalents | (913) | 4,714 | (5,627) | | Cash and cash equivalents at end of period | 12,727 | 40,176 | (27,449) | - Cash outflow from operating activities increased, cash inflow from investing activities primarily came from loan repayments, and cash inflow from financing activities mainly originated from bank loans[162][163] Notes to the Condensed Consolidated Financial Statements This section details the basis of preparation, accounting policies, revenue breakdown, expense specifics, liquidity, investments, and material litigation, highlighting IAS 34 application, declining online game revenue, increased R&D and administrative expenses, and the impact of associate litigation costs on losses 1. Basis of Preparation The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the IASB and the applicable disclosure requirements of the HKEX Listing Rules - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[165][169] 2. Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, with certain properties and financial instruments measured at revalued amounts or fair value, using the same accounting policies as the 2024 annual financial statements, and the application of IFRS amendments had no material impact - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain properties and financial instruments measured at revalued amounts or fair value[166][170] - The accounting policies and methods of computation used for the six months ended June 30, 2025, are the same as those presented in the Group's consolidated financial statements for the year ended December 31, 2024[167][170] - The application of amendments to International Financial Reporting Standards (IAS 21 (Amendment) Lack of Exchangeability) had no material impact on the Group's financial position and performance[168][171] 3. Revenue and Segment Information In H1 2025, the Group's revenue was RMB 43.236 million, primarily from online games (RMB 36.843 million) and online advertising services (RMB 6.393 million), mostly recognized at a point in time, with all revenue from operations within China and no single customer exceeding 10% of total revenue Revenue Disaggregation In H1 2025, online game revenue decreased to RMB 36.843 million, while online advertising service revenue slightly increased to RMB 6.393 million, with most revenue (RMB 38.540 million) recognized at a point in time Revenue Disaggregated by Major Product or Service Line | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Online game revenue | 36,843 | 44,302 | (7,459) | (16.8%) | | Online advertising service revenue | 6,393 | 5,853 | 540 | 9.2% | | Total revenue | 43,236 | 50,155 | (6,919) | (13.8%) | - Revenue recognition timing: RMB 38.540 million recognized at a point in time, RMB 4.696 million recognized over time[173] Segment Information The Chief Operating Decision Maker (CODM) allocates resources and assesses performance based on categories of goods or services delivered; due to a lack of other independent financial information, only entity-wide disclosures, major customer, and geographical information are presented - Information reported to the Chief Operating Decision Maker for resource allocation and segment performance assessment focuses on the categories of goods or services delivered or provided[174][176] - As no other separate financial information is provided apart from the Group's overall performance and financial position within its continuing operations, only entity-wide disclosures, major customer, and geographical information are presented[175][176] Geographical Information All of the Group's revenue from external customers for H1 2025 and H1 2024 was derived from operations within mainland China Revenue by Geographical Region | Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | China | 43,236 | 50,155 | Information about Major Customers The Group has a large number of game players, with no single player or customer accounting for 10% or more of the Group's total revenue for the six months ended June 30, 2025 and 2024 - For the six months ended June 30, 2025 and 2024, no revenue from any individual game player or customer accounted for 10% or more of the Group's total revenue[180][181] 4. Other Income In H1 2025, the Group's other income decreased by 25.7% to RMB 2.111 million from H1 2024, primarily due to reduced bank interest income and revenue from providing board and card game venues Other Income Details | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Franchise fee income | 74 | 127 | (53) | (41.7%) | | Loan interest income | 207 | 165 | 42 | 25.5% | | Bank interest income | 12 | 318 | (306) | (96.2%) | | Income from providing board and card game venues | 1,789 | 2,212 | (423) | (19.1%) | | Total | 2,111 | 2,842 | (731) | (25.7%) | 5. Other Gains and Losses In H1 2025, the Group's other losses were RMB 0.132 million, a slight decrease from RMB 0.192 million in H1 2024, primarily due to net foreign exchange losses partially offset by the absence of impairment losses on prepayments from the prior year Other Gains and Losses Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Net foreign exchange (losses)/gains | (132) | 110 | (242) | | Impairment loss on prepayments | — | (302) | 302 | | Total | (132) | (192) | 60 | 6. Income Tax Expense The Group incurred no income tax expense for the six months ended June 30, 2025, consistent with the prior year period - For the six months ended June 30, 2025, the Group incurred no income tax expense[187] 7. Loss for the Period In H1 2025, the Group's loss for the period was RMB 35.086 million; after deducting expenses including total staff costs of RMB 9.546 million (down 27.2% YoY) and total depreciation of RMB 0.290 million (down 38.8% YoY) Key Expense Details for Loss for the Period | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Lease expenses related to short-term leases | 148 | 124 | 24 | 19.4% | | Total depreciation | 290 | 474 | (184) | (38.8%) | | Total staff costs | 9,546 | 13,109 | (3,563) | (27.2%) | 8. Dividends The Directors did not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year period - The Directors did not recommend the payment of an interim dividend for the six months ended June 30, 2025[190][191] 9. Loss Per Share In H1 2025, basic loss per share attributable to owners of the Company increased to RMB 3.56 cents from RMB 1.84 cents in H1 2024, with diluted loss per share also RMB 3.56 cents as share options were anti-dilutive Loss Per Share Comparison | Metric | H1 2025 (RMB cents) | H1 2024 (RMB cents) | Change (RMB cents) | | :--- | :--- | :--- | :--- | | Basic loss per share | (3.56) | (1.84) | (1.72) | | Diluted loss per share | (3.56) | (1.84) | (1.72) | - The exercise of share options was not assumed in calculating diluted loss per share as their exercise price was higher than the average market price of the shares[194] 10. Property, Plant and Equipment In H1 2025, the Group's cost of acquiring property, plant, and equipment significantly increased to RMB 0.991 million from RMB 0.285 million in H1 2024 Cost of Property, Plant and Equipment Acquisitions | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Acquisition cost | 991 | 285 | 706 | 247.7% | 11. Investment Properties In June 2025, the Group acquired a property in China with a fair value of RMB 5.630 million, which was pledged for outstanding receivables and interest, and agreed upon as partial settlement with the borrower - In June 2025, the Group acquired a property in China with a fair value of RMB 5,630,000, which was pledged for outstanding receivables and interest, and agreed upon as partial settlement with the borrower[196][200] 12. Interest in Associates As of June 30, 2025, the Group's interest in associates, primarily a 32.6% ownership in NASDAQ-listed AGAE, significantly decreased to RMB 7.035 million from RMB 29.723 million on December 31, 2024, mainly due to the share of losses from AGAE accounted for using the equity method Interest in Associates Comparison | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest in associates | 7,035 | 29,723 | (22,688) | (76.3%) | - The decrease in interest was due to the share of losses from AGAE accounted for using the equity method[197][201] - As of June 30, 2025, the fair value of AGAE was approximately RMB 222.494 million[198][201] 13. Trade and Other Receivables As of June 30, 2025, trade and other receivables decreased to RMB 17.157 million from RMB 33.581 million on December 31, 2024, primarily due to significant reductions in loans and interest receivables (from RMB 19.271 million to RMB 7.838 million) and prepaid advertising expenses (from RMB 4.0 million to zero), alongside a decline in trade receivables Trade and Other Receivables Details | Item | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade receivables (net) | 827 | 1,597 | (770) | (48.2%) | | Prepayments (net) | 1,149 | 6,171 | (5,022) | (81.4%) | | Other receivables and deposits (net) | 7,343 | 6,542 | 801 | 12.2% | | Loans and interest receivables (net) | 7,838 | 19,271 | (11,433) | (59.3%) | | Total | 17,157 | 33,581 | (16,424) | (48.9%) | - The credit period for trade receivables is typically 30 to 90 days[205][207] Impairment Losses Recognized/(Reversed) | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | (6) | (6) | | Other receivables and deposits | — | 83 | | Loans and interest receivables | 178 | 165 | | Total | 172 | 242 | 14. Trade and Other Payables As of June 30, 2025, trade and other payables decreased to RMB 17.690 million from RMB 21.766 million on December 31, 2024, primarily due to significant reductions in accrued R&D expenses (from RMB 3.256 million to RMB 0.410 million) and VAT and other taxes payable (from RMB 1.347 million to RMB 0.115 million) Trade and Other Payables Details | Item | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 3,682 | 4,313 | (631) | (14.6%) | | Other payables and accrued expenses | 5,345 | 5,047 | 298 | 5.9% | | Staff costs and accrued benefits | 3,240 | 4,027 | (787) | (19.5%) | | Accrued R&D expenses | 410 | 3,256 | (2,846) | (87.4%) | | Accrued legal and professional fees | 4,192 | 3,038 | 1,154 | 38.0% | | VAT and other taxes payable | 115 | 1,347 | (1,232) | (91.5%) | | Total | 17,690 | 21,766 | (4,076) | (18.7%) | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 953 | 573 | | 31 to 60 days | 16 | 11 | | 61 to 90 days | 17 | 19 | | 91 to 180 days | 25 | 21 | | 181 to 365 days | — | 22 | | Over 1 year | 2,671 | 3,667 | | Total | 3,682 | 4,313 | 15. Bank Loans As of June 30, 2025, current bank loans increased to RMB 7.500 million from RMB 2.600 million on December 31, 2024; these unsecured, unguaranteed loans bear fixed annual interest rates of 3.05% to 3.50% and are repayable within one year Bank Loans Comparison | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank loans (current portion) | 7,500 | 2,600 | 4,900 | 188.5% | - Bank loans are unsecured, unguaranteed, bear fixed annual interest rates ranging from 3.05% to 3.50%, and are repayable within one year[217][218] 16. Share-Based Compensation Transactions The Group operates a 2014 Share Option Scheme and a 2017 Share Award Scheme; in H1 2025, 41,743,839 options lapsed under the 2014 scheme, leaving 20,370,000 unexercised, while the Share Award Scheme had 17,071,153 awards authorized and 725,000 awarded shares unexercised (37,288,483 vested), with total share-based compensation expense of RMB 34,000 recognized Share Option Scheme adopted by the Company in November 2014 The 2014 Share Option Scheme aims to provide eligible persons with an opportunity to acquire ownership interests in the Company; as of June 30, 2025, 20,370,000 options remained unexercised, with 41,743,839 options lapsing during the period, primarily from former directors and employees 2014 Share Option Scheme Movements (H1 2025) | Category of Grantees | Outstanding as at Jan 1, 2025 | Lapsed during the period | Outstanding as at June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors | 31,360,000 | (23,520,000) | 7,840,000 | | Employees | 30,753,839 | (18,223,839) | 12,530,000 | | Total | 62,113,839 | (41,743,839) | 20,370,000 | Share Award Scheme adopted by the Company in May 2017 The 2017 Share Award Scheme aligns eligible persons' interests with long-term Group growth; as of June 30, 2025, 17,071,153 awards were authorized, with 725,000 awarded shares unexercised and 37,288,483 shares vested, with no new awards granted, vested, cancelled, or lapsed in H1 2025 Number of Awards Available for Grant under Share Award Scheme | Metric | Jan 1, 2025 | June 30, 2025 | | :--- | :--- | :--- | | Number of Awards Available for Grant | 17,071,153 | 17,071,153 | Share Award Scheme Movements (H1 2025) | Category of Grantees | Outstanding as at Jan 1, 2025 | Granted during the period | Vested during the period | Cancelled during the period | Lapsed during the period | Outstanding as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors/Former Directors | 250,000 | — | — | — | — | 250,000 | | Employees | 475,000 | — | — | — | — | 475,000 | | Total | 725,000 | — | — | — | — | 725,000 | - As of June 30, 2025, 37,288,483 shares were vested[230][234] - For the six months ended June 30, 2025, the Group recognized total share-based compensation expenses of RMB 34,000[234] 17. Significant Related Party Transactions In H1 2025, the Group had no employee benefit expense transactions with former acting CEO and non-executive director (compared to RMB 0.5 million in H1 2024), and total key management personnel remuneration decreased from RMB 4.537 million to RMB 1.375 million Significant Related Party Transactions (Employee Benefit Expenses) | Related Party Name | Relationship | Nature of Transaction | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Former Acting CEO and Former Non-Executive Director of the Company | Major Shareholder of the Company | Employee benefit expenses | — | 500 | Key Management Personnel Remuneration | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Directors' fees | 376 | 492 | (116) | (23.6%) | | Basic salaries and allowances | 802 | 3,519 | (2,717) | (77.2%) | | Retirement benefit scheme contributions | 163 | 448 | (285) | (63.6%) | | Share-based compensation | 34 | 78 | (44) | (56.4%) | | Total | 1,375 | 4,537 | (3,162) | (69.7%) | 18. Fair Value Measurements of Financial Instruments The Group measures certain financial instruments at fair value, primarily unlisted equity investments classified within Level 3 of the fair value hierarchy, which remained at RMB 14.215 million as of June 30, 2025, with no transfers between fair value hierarchy levels during the period, and fair value determined using the asset approach considering significant unobservable inputs like marketability discount (15.6%) and minority interest discount (0% to 11.8%) - Certain financial instruments of the Group are measured at fair value, primarily unlisted equity investments classified within Level 3 of the fair value hierarchy[237][239][241] Financial Assets at Fair Value through Profit or Loss (FVTPL) | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Unlisted equity investments | 14,215 | 14,215 | - For the six months ended June 30, 2025, there were no transfers between Level 1 and Level 2, nor any transfers into or out of Level 3[245][247] - Fair value is determined using the asset approach, with significant unobservable inputs including marketability discount (15.6%) and minority interest discount (0% to 11.8%)[246][247] 19. Other Litigations/Arbitrations This section details three ongoing material legal disputes: arbitration and related litigation concerning the Fast Express/Merit Horizon loan, enforcement proceedings for the Spoville convertible bond arbitration, and two lawsuits by Knighted Pastures against associate AGAE, all of which are in progress without final rulings Arbitration from Mr. Ng Kwok Leung Frank ("Mr. Ng") against AGAE Former director Mr. Ng initiated arbitration against AGAE with the American Arbitration Association for USD 1 million in severance pay and alleged fraud in a prior settlement; USD 645,000 previously received by the Company to offset Mr. Ng's loan has been transferred to an escrow account, with discovery ongoing and hearings scheduled for early November 2025 - Mr. Ng (former Executive Director and former CEO of the Company) owed the Company a total of RMB 6,905,000 in loans and interest[251][255] - In October 2023, Mr. Ng filed an arbitration case with the American Arbitration Association, claiming USD 1,000,000 owed by AGAE and alleging fraud in settlement-related documents[254][256] - Approximately USD 645,000 previously received by the Company has been transferred to an escrow accoun