OFA Group (NASDAQ:OFAL) ("OFA" or the "Company") today announced the completion of a strategic intellectual property ownership restructuring related to its QIKBIM platform, pursuant to a newly executed Intellectual Property Assignment and Co-Ownership Agreement (the "Agreement").

Under the Agreement, the Company has acquired a 50% undivided co-ownership interest in the QIKBIM system and related intellectual property assets, while securing full operational and commercial control over the platform.

Reclassification of Historical Investment into Strategic Intangible Assets

A key financial highlight of the transaction is the conversion of previously incurred development expenditures into IP ownership.

Approximately $12.0 million of historical payments have been credited toward the total purchase price and will be recognized as capitalized intangible assets, transitioning from prior co-development expenditures.

From a financial reporting perspective, this reclassification:

  • Enhances the Company's balance sheet through recognition of durable IP assets
  • Reduces reliance on expense-based accounting for core technology investments
  • Improves earnings visibility and margin stability over time



     

The transaction represents a meaningful shift from a cost-based development model to an asset-backed value model.

Control Rights Support Revenue Recognition and Strategic Execution

While structured as a co-ownership arrangement, OFA has secured exclusive decision-making authority across all key aspects of the business, including:

  • Product roadmap and technical architecture
  • Pricing, licensing, and customer contracting
  • Commercialization strategy and deployment
  • Revenue collection, accounting, and distribution



     

These rights position the Company as the primary economic operator of the QIKBIM platform and are expected to support enhanced control over revenue generation, alignment with long-term monetization strategies, and global scalability.

Improved Cash Flow Profile and Capital Recovery Structure

The Agreement establishes a structured monetization framework under which:

  • Net proceeds from IP commercialization will be shared on a 50/50 basis
  • The Company is entitled to recover certain development investments prior to profit sharing



     

This structure is expected to accelerate capital recovery timelines, improve near- to mid-term cash flow visibility, and establish a recurring IP-driven revenue stream.

Reduced Structural Risk and Increased Asset Certainty

The transaction simplifies and replaces prior co-development arrangements, eliminating contractual complexity and reducing structural uncertainty.

In addition, the Agreement includes:

  • Restrictions on counterparty transfer and competitive use
  • Protective provisions safeguarding the Company's control
  • Call options to acquire additional ownership under specified conditions



     

These features collectively reduce counterparty and structural risk, enhance asset security and auditability, and lower the likelihood of future impairment.

Positioning for Scalable, IP-Driven Growth

This transaction marks a strategic transition for OFA:

  • From project-based development spending to scalable IP ownership
  • From collaborative participation to operational control
  • From cost center dynamics to long-term value generation



     

Management believes the transaction will strengthen earnings quality and predictability, support valuation through recognized intangible assets, and provide a foundation for sustainable, IP-driven growth.