Prosperousprint (08385) announced that, on June 9, 2024, Zhongwan (Shenzhen) (a wholly-owned subsidiary of the company) and the buyer Shenzhen Xunlid In the agreement reached by the Taold Electrical Trading Co., Ltd. and Zhongwan (Shenzhen) employees, the outstanding payments for salaries, social security funds, housing provident funds, and other employment-related payments of Shenzhen factory employees are settled in accordance with the price of RMB 20.68 million (which may increase to RMB 20.78 million).

The assets to be sold include equipment, fixtures, and materials of the Shenzhen factory, including 52 printing machines, such as four-color printing machines, gluing machines, saddle-stitching machines, wire-stitching machines, paper-cutting machines, folding machines, book-binding machines, laminating machines, automatic beer machines, shrink-wrapping machines, automatic plate paper sticking machines, trademark machines, punching machines, paper-cutting machines, and plate-making machines; 7 vehicles for production inside the factory, such as electric vehicles, hand-held cars, and forklifts; Scrap, raw materials, and auxiliary materials.

Due to the challenging business environment, the Shenzhen factory has stopped production, and the company plans to sell the machines to pay off the unpaid payments for Shenzhen factory employees, including salaries, social security funds, and housing provident funds. The directors believe that the agreement and the transactions to be conducted under it represent a good opportunity for the company to sell assets and settle outstanding payments for the Shenzhen factory. The directors believe that the terms of the agreement and the transactions to be conducted under it are fair and reasonable and are in the overall interests of the company and its shareholders.

In addition, a group of 291 employees (applicants) of Zhongwan (Shenzhen) have filed an arbitration application against Zhongwan (Shenzhen), and the Shenzhen Labor Dispute Arbitration Commission issued a labor arbitration award on June 12, 2024, which decided the following:

(1) Zhongwan (Shenzhen) should pay the applicants a salary of RMB 3.2668 million during the period from March 1, 2024 to May 31, 2024;

(2) The applicants were dismissed because they terminated their employment contract in advance;

(3) Zhongwan (Shenzhen) should pay the applicants RMB 21.4698 million as economic compensation for the termination of their employment contract;

(4) For the 16 applicants who received one-time disability employment subsidies, Zhongwan (Shenzhen) should pay a total of RMB 0.6631 million in one-time disability employment subsidies.

Therefore, Zhongwan (Shenzhen) has a legal obligation to fulfill the judgment as soon as possible. Therefore, Zhongwan (Shenzhen) needs to use the proceeds from the sale to settle the labor arbitration award. The total amount of the labor arbitration award is approximately RMB 25.3996 million, which is expected to be settled with the proceeds from the sale, but 65% of the economic compensation cannot be settled due to insufficient proceeds from the sale.