CLOUDBREAK-B (02592) announced that on January 6, 2026, CLOUDBREAK Biopharmaceutical Technology (Guangzhou) Co., Ltd., an indirect wholly-owned subsidiary, received a notice issued by the Guangzhou Huangpu District People's Court dated December 24, 2025.

The court, upon the application of Cedar Wealth Management SPC, ruled through legal proceedings to impose judicial preservation on a bank account held by CLOUDBREAK Guangzhou at Industrial and Commercial Bank of China (ICBC), effective until November 30, 2026.

The account preservation includes a cash balance of approximately RMB 2.55 million as of the court notice date.

After consulting its Chinese legal advisors, the company believes the legal proceedings originate from an arbitration initiated by Cedar Wealth against the company and CLOUDBREAK Guangzhou through an application submitted to the Shanwei Arbitration Commission on August 11, 2025.

The application's content relates to several service agreements for corporate, marketing, and other services, along with supplementary agreements concerning the payment of related service fees, which were entered into prior to the company's securities listing on the Stock Exchange on July 3, 2025.

It is alleged that the defendants owe Cedar Wealth certain payments.

In the arbitration application, Cedar Wealth made the following claims: (a) payment from the company to Cedar Wealth comprising: (i) outstanding service fees and other expenses totaling $2.05 million; (ii) interest on the alleged outstanding fees calculated based on the one-year loan prime rate published by the National Interbank Funding Center; and (iii) legal costs and asset preservation insurance costs totaling approximately RMB 1.04 million; (b) CLOUDBREAK Guangzhou assumes joint liability for the payment of these claimed amounts; and (c) the defendants shall bear the costs of the arbitration proceedings.

As the defendants had not received any invoices, fee notices, or demands for the alleged outstanding fees prior to the service date of the arbitration application, the Group has actively maintained contact with Cedar Wealth to gather necessary information and details related to these claims.

However, as of the date of this announcement, Cedar Wealth has not provided the Group with further details; therefore, the Board believes that prior to receiving the court notice on January 6, 2026, there was insufficient information available to assess the nature, potential impact, and consequences of the arbitration proceedings.

The Board is currently seeking legal advice regarding the legal and arbitration proceedings and will continue to assess and monitor their potential legal, operational, and financial impact on the Group.

As of the date of this announcement, to the best of the Board's knowledge: (a) these proceedings and the asset preservation order have not had a significant adverse impact on the Group's overall business, operations, and cash flow position; and (b) the Group's business and operations remain normal.

The Group will continue to seek negotiations with Cedar Wealth to explore the possibility of a mutually acceptable settlement, aiming to resolve misunderstandings between the relevant parties, including terminating or withdrawing these proceedings and lifting the asset preservation order, to safeguard the overall interests of the company and its shareholders.