NetDragon Websoft Holdings Limited (NetDragon) signed a legally binding memorandum on 28 September 2026 with Jiaxing Jiuzhou Culture Media Co., Ltd. (Jiuzhou) to create a new artificial-intelligence joint venture (JV) and issue up to 25.00 million unlisted warrants to Jiuzhou as a performance incentive.

Joint-Venture Structure and Capital • Jiuzhou will first transfer all intellectual property and assets of its Harness system business into a newly incorporated JV company. • Upon completion, NetDragon’s wholly owned subsidiary NetDragon BVI will inject RMB50.00 million (Hong Kong dollar equivalent) in cash for a 51 % stake; Jiuzhou will retain 49 %. • The JV will focus on foundational AI software, large-scale models, content-creation platforms, model APIs, and related digital-technology services. • NetDragon will consolidate the JV’s financials, and the JV term is set for two to three years. • A five-member board will oversee the JV, with NetDragon nominating three directors, including the chairman.

Performance-Based Warrant Programme • At completion, NetDragon will issue 25.00 million unlisted warrants to Jiuzhou (or its designee) at HK$0.10 each, raising HK$2.50 million in gross proceeds. • The warrants are divided into three tranches: – 8.00 million warrants at an exercise price of HK$10.00 per share (31.67 % premium to the last trading price). – 8.00 million warrants at HK$12.00 (58.00 % premium). – 9.00 million warrants at HK$15.00 (97.50 % premium). • Exercise windows open only when specified KPIs are met: – Tranche 1: monthly ARR ≥ RMB72.00 million and cumulative net loss ≤ RMB5.00 million, assessed three months post-injection. – Tranche 2: monthly ARR ≥ RMB108.00 million and cumulative net loss ≤ RMB10.00 million, assessed nine months post-injection. – Tranche 3: monthly ARR ≥ RMB153.00 million, external revenue ≥ 40 % of ARR, and cumulative net loss ≤ RMB15.00 million, assessed 15 months post-injection. • Each tranche carries a 12-month exercise period extendable by another 12 months.

Potential Dilution and Proceeds • Full exercise would add 25.00 million new shares, equivalent to 4.54 % of enlarged share capital (excluding treasury shares). • NetDragon would receive HK$311.00 million in exercise proceeds—HK$80.00 million, HK$96.00 million, and HK$135.00 million from Tranches 1-3, respectively—bringing total gross proceeds (including the issue price) to HK$313.50 million. • Management plans to deploy roughly 90 % of net proceeds to expand AI capabilities (computing power, AI-driven gaming and education initiatives) and 10 % for general working capital.

Regulatory Position • The JV formation falls below the 5 % thresholds under Rule 14.07 of the Hong Kong Listing Rules, so no notification is required. • Issuing the warrants and allotting underlying shares require shareholder approval at an extraordinary general meeting and separate Stock Exchange listing approval for the warrant shares.

Shareholder Structure Impact Assuming full exercise, the warrant holder would own 4.54 % of NetDragon’s enlarged share base, while existing substantial shareholder DJM Holding Ltd. would decline from 42.69 % to 40.75 %.

Key Dates and Conditions • Long stop date for satisfying all conditions precedent is 31 December 2026. • If conditions, including shareholder approval, are unmet by that date, NetDragon has no obligation to complete the investment or issue the warrants.

Investors are advised that completion of the JV and warrant issuance—and subsequent warrant exercises—remain conditional and may not proceed.