XD INC (02400) announced that on August 4, 2025, the purchaser (an indirect wholly-owned subsidiary of the company), together with other parties, entered into a share subscription agreement with the target company MiAO (Cayman) Limited. Under the agreement, the purchaser conditionally agreed to subscribe for and purchase, while the target company conditionally agreed to allot and issue, 7.0864 million Series B1 preferred shares, representing approximately 5.30% of the target company's issued share capital on a fully diluted and converted basis immediately following completion, for a consideration of $14 million.

Upon completion of the purchase, the purchaser will hold a 5.30% equity interest in the target company, and the target company will not become a subsidiary of the company.

As of the announcement date, the target company is held 45.66% by founder parties and 39.94% by six shareholders, none of whom holds more than 10%. The majority of these shareholders are well-known investment institutions or large internet companies, with ultimate beneficial owners who are independent third parties. The remaining 14.40% of the target company's issued share capital has been reserved for its share incentive plan.

The target company's core business involves developing online games, self-publishing, and licensing. The target company's core team possesses extensive experience in developing and operating social games with over ten million daily active users, demonstrating deep insights into user behavior. The company aims to create a virtual world that integrates gaming and social interaction, enriching users' lives and enabling broader interpersonal connections. The target company's cutting-edge products highlight its ability to predict industry trends and create innovative immersive entertainment experiences with deeply integrated social interactions.

The purchase leverages the target company's exceptional development potential and proven innovation capabilities. Through forward-looking strategic cooperation, the group aims to bring more innovative games to players and further enhance user engagement. Should the target company's games successfully launch in the market and receive positive reception, the group, as its shareholder, may also benefit from the target company's potential financial returns and equity appreciation.

Overall, the purchase is expected to support the sustainable development of the group's business and promote the overall long-term interests of shareholders.