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Cheer Holding Announces Plan to Acquire 60% Equity Stake in ZKZG, Accelerating AI Development

1. Cheer Holding plans to acquire a 60% stake in ZKZG. The investment is non-binding pending due diligence. 2. The deal combines share issuance and cash payment for the equity stake. Specific valuation details will be disclosed later. 3. ZKZG specializes in synthetic data using generative AI and simulation technology. Its elite team underpins its innovation in AI. 4. The acquisition highlights Cheer Holding’s strategy to boost its AI and digital ecosystem. It aims to accelerate growth in the AI value chain.

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FAQ

Why Bullish?

The acquisition is a strategic investment that enhances CHR's position in the AI sector. Similar technology-driven acquisitions, like those in the telecom and tech industries, have historically supported sustained price appreciation.

How important is it?

The non-binding investment agreement signals a positive strategic move into AI. However, key details remain pending, making the outcome significant but subject to execution and due diligence risks.

Why Long Term?

The integration of ZKZG’s technology is expected to yield long-term benefits through expanded AI capabilities and market reach. The full benefits may take time as the synergies and integration evolve.

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NVDAMSFT
February 25, 2025 07:30 ET  | Source: Cheer Holding, Inc. BEIJING, Feb. 25, 2025 (GLOBE NEWSWIRE) -- Cheer Holding, Inc. (NASDAQ: CHR) (“Cheer Holding” or the “Company”), a leading provider of advanced mobile internet infrastructure and platform services, today announced it has entered into a non-binding investment framework agreement (the “Framework Agreement”) with all the shareholders of Beijing Zhong Ke Zhi Guo Technology Co., Ltd. (“ZKZG”), a provider of synthetic data utilizing generative AI and simulation technology. Pursuant to the Framework Agreement, Cheer Holding intends to acquire a 60% equity stake in ZKZG through a combination of share issuance and cash payment. Details regarding the overall valuation and specific terms of the transaction will be disclosed upon the signing of definitive agreements, following satisfactory completion of due diligence, audit, and evaluation of ZKZG. ZKZG stands out as a premier provider of synthetic data, effectively integrating generative AI with simulation technologies. Its distinguished team comprises highly qualified professionals, many of whom are graduates from top-tier universities both domestically and internationally, bringing significant academic expertise to the field. This team exemplifies diverse skill sets and an innovative spirit, driving advancements in intelligent product development and expanding application scenarios through the synergy of AI and hardware technology. ZKZG holds a substantial advantage in the application and commercialization of artificial intelligence technologies. This proposed acquisition reflects Cheer Holding's commitment to strengthening its presence in the artificial intelligence value chain and accelerating its growth in the AI sector, with the objective of creating transformative opportunities for the Company. About Cheer Holding, Inc. As a preeminent provider of next-generation mobile internet infrastructure and platform services in China, Cheer Holding is dedicated to building a digital ecosystem that integrates “platforms, applications, technology, and industry” into a cohesive digital eco-system, thereby creating a new, open business environment for web3.0 that leverages AI technology. The Company is developing a 5G+VR+AR+AI shared universe space that builds on cutting-edge technologies including blockchain, cloud computing, extended reality, and digital twin. Cheer Holding’s portfolio includes a wide range of products and services, such as CHEERS Telepathy, CHEERS Video, CHEERS e-Mall, CHEERS Open Data, CheerReal, CheerCar, CheerChat, Polaris Intelligent Cloud, AI-animated short drama series, short video matrix, variety show series, Livestreaming, and more. These offerings provide diverse application scenarios that seamlessly blend “online/offline” and “virtual/reality” elements. With “CHEERS+” at the core of Cheer Holding’s digital ecosystem, the Company is committed to utilizing innovative product applications and technologies to drive its long-term sustainable and scalable growth. For more information, please visit http://ir.gsmg.co/. Safe Harbor Statement Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic; the occurrence of any event, change or other circumstances that could affect the Company’s ability to continue successful development and launch of its metaverse experience centers; the ability to acquire 60% of the equity interests of Beijing Zhong Ke Zhi Guo Technology Co., Ltd. ; the possibility that the Company may not succeed in developing its new lines of businesses due to, among other things, changes in the business environment and technological developments, competition, changes in regulation, or other economic and policy factors; disruptions or other business interruptions that may affect the operations of our products and services, the possibility that the Company’s new lines of business may be adversely affected by other economic, business, and/or competitive factors; other factors, risks and uncertainties set forth in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company’s latest Annual Report on Form 20-F filed with the SEC on March 14, 2024, as amended. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release. For investor and media inquiries, please contact:Wealth Financial Services LLCConnie Kang, PartnerEmail: ckang@wealthfsllc.comTel: +86 1381 185 7742 (CN)

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