JIAYUAN SER signs a mandatory execution mediation agreement

According to the announcement from JIAYUAN SER (01153), it concerns the provision of unauthorized guarantees to the then ultimate controlling shareholder regarding major and related transactions. On May 15, 2025, Shanghai Jinyuan and Shanghai Zhijin (as applicants) entered into a compulsory execution mediation agreement (the mediation agreement) with Chaohu Xutong (a company wholly owned by the former ultimate beneficial owner of the company), JIAYUAN Chuangsheng (a company wholly owned by the former ultimate beneficial owner of the company), Zhejiang Heyuan (a wholly-owned subsidiary of the company) and Zhejiang Zhixiang Dacheng (a wholly-owned subsidiary of the company) as the parties subject to enforcement (the parties subject to enforcement). According to the agreement, Shanghai Jinyuan and Shanghai Zhijin each agreed to pay the parties subject to enforcement a total of RMB 86 million (the mediation amount) for all obligations under the equity transfer agreement and guarantee agreement (the mediation). The mediation amount includes: (1) RMB 43 million, to be paid by JIAYUAN Chuangsheng and its affiliates within five business days after signing the mediation agreement by transferring 1,034 parking spaces (the parking spaces); and (2) the remaining RMB 43 million, to be paid in cash by Zhejiang Heyuan and Zhejiang Zhixiang Dacheng as follows:

(i) RMB 5 million (the initial mediation amount) will be paid to Shanghai Jinyuan and Shanghai Zhijin upon signing the mediation agreement;

(ii) RMB 10 million must be paid to Shanghai Jinyuan and Shanghai Zhijin by June 30, 2025;

(iii) RMB 5 million must be paid to Shanghai Jinyuan and Shanghai Zhijin by September 30, 2025; and

(iv) the remaining RMB 23 million must be paid to Shanghai Jinyuan and Shanghai Zhijin by December 31, 2025.

According to the mediation agreement, Shanghai Jinyuan and Shanghai Zhijin shall apply to the relevant court to unfreeze the bank accounts of Zhejiang Heyuan and Zhejiang Zhixiang Dacheng within five business days after receiving the initial mediation amount, terminate the enforcement litigation, and revoke all related restrictions. It is expected that the funds will be paid from the internal resources of the group.

Shanghai Jinyuan and Shanghai Zhijin further agreed that after the parties subject to enforcement fulfill the above obligations, they will no longer have any rights to claim against the parties subject to enforcement based on the arbitration mediation document. However, if any party subject to enforcement fails to fulfill their respective obligations under the terms of the mediation agreement, Shanghai Jinyuan and Shanghai Zhijin have the right to restore the arbitration mediation document. Nevertheless, Shanghai Jinyuan and Shanghai Zhijin further committed that if the restoration arises due to the breach of obligations under the mediation agreement by Chaohu Xutong, JIAYUAN Chuangsheng and/or their affiliates, they will not include Zhejiang Heyuan and Zhejiang Zhixiang Dacheng as parties subject to enforcement in that restoration.

In addition, Shanghai Jinyuan and Shanghai Zhijin have entered into a letter of commitment with Zhejiang Heyuan and Zhejiang Zhixiang Dacheng, whereby (including) Shanghai Jinyuan and Shanghai Zhijin commit that they will not restore the arbitration mediation document against Zhejiang Heyuan and Zhejiang Zhixiang Dacheng, provided that Zhejiang Heyuan and Zhejiang Zhixiang Dacheng have fully fulfilled their obligations under the mediation agreement, and they will not initiate any legal proceedings to hold Zhejiang Heyuan and Zhejiang Zhixiang Dacheng (including their directors, shareholders, senior management, employees, agents, and representatives) liable for any matters related to the arbitration Due to the mediation, the Group expects to record a loss reversal of approximately RMB 109 million. This reversal includes (i) RMB 66.34 million, which is the difference between the provision of RMB 152 million recorded as of December 31, 2024, and the mediation amount of RMB 86 million, and (ii) RMB 43 million, which is attributed to the transfer of parking spaces and will be paid by JIAYUAN CHUANGSHENG and its affiliates. As of March 31, 2025, the assessed value of the parking spaces is approximately RMB 44.49 million. The remaining provision of RMB 43 million (i.e., the unpaid cash obligation) will depend on compliance with the payment plan as of December 31, 2025, and may be partially alleviated due to potential recoveries or claims against relevant parties, depending on their repayment ability. The actual financial impact to be recorded by the Company will be subject to review by the Company's auditors and further audit procedures, which may differ from the estimates stated in this announcement.

Considering (i) the dismissal is a final ruling and not subject to appeal; (ii) the Group has incurred considerable legal fees in this regard; (iii) the repayment of RMB 43 million will release and discharge all remaining obligations and liabilities of the Group under the arbitration mediation agreement, while the release of frozen deposits will enhance the Group's cash flow and improve its operational liquidity; and (iv) according to the Company's legal advisor in China, Zhejiang Heyuan and Zhejiang Zhixiang Dacheng can pursue recoveries and claims for amounts paid to relevant parties, the Board believes that entering into a binding mediation agreement will allow the Company to resolve the arbitration amicably and effectively, avoiding further time, effort, and potential adverse impacts on the Group. Therefore, the Company believes that the binding mediation agreement is fair and reasonable and in the overall interest of the Company and its shareholders