EXPERT SYS (08319) announced that its wholly-owned subsidiary, EXPERT SYS Limited (ESL), submitted a bid on October 24, 2022, to a client for the supply of certain software licenses and services. The bid was based on a quotation provided by a software product supplier, who agreed to supply the software products under a licensing plan at an agreed price, with an initial term from March 2023 to March 2026, followed by a second term from March 2026 to March 2028.

Subsequently, ESL was awarded a service agreement to supply the software products under the licensing plan. However, ESL was later informed by the supplier that the latter would discontinue supplying the software products under the licensing plan starting March 2026 for the second term. As a result, ESL will be unable to continue providing the software products to the client under the service agreement for the second term.

In light of this, ESL has been negotiating with the client to terminate the service agreement after the initial term and has proposed an alternative solution. Under this alternative arrangement, ESL will supply an agreed quantity of software licenses and services to the client. The total estimated cost for terminating the service agreement and providing alternative software products ranges between HKD 4 million and HKD 8 million.

As of the announcement date, ESL is still in discussions with the client regarding the terms of terminating the service agreement and providing the alternative solution, and no binding agreement has been reached yet.