Brainhole Technology Limited — Capital/Financing Update 2023

Dec 21, 2023

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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BRAINHOLE TECHNOLOGY LIMITED ��������

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2203)

MAJOR TRANSACTION IN RELATION TO FURTHER ACQUISITION OF LISTED SECURITIES

The Board announces that the Company has entered into the following transaction involving acquisition of listed securities.

Further Acquisition of Affirm Shares

On 20 December 2023 (after trading hours of the Stock Exchange), further to the Previous Acquisitions of Affirm Shares as disclosed in the Previous Announcements, the Company has further acquired of an aggregate of 17,650 Affirm Shares through the open market at an aggregate consideration of approximately US$0.9 million (equivalent to approximately HK$7.0 million) (excluding transaction costs).

LISTING RULES IMPLICATIONS

Further Acquisition of Affirm Shares

Pursuant to Rule 14.22 and Rule 14.23 of the Listing Rules for the purpose of classification of the transactions, as the Previous Acquisitions of Affirm Shares and the Further Acquisition of Affirm Shares involve the acquisition of Affirm Shares within a 12-month period, all transactions respectively contemplated thereunder are considered and are aggregated as one transaction at a total consideration of approximately US$3.2 million (equivalent to approximately HK$25.0 million).

The Further Acquisition of Affirm Shares, on a standalone basis, constitutes a discloseable transaction since one or more of the applicable percentage ratios (as defined under the Listing Rules) are more than 5% but all of such ratios are less than 25%.

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As the highest applicable percentage ratio under Rule 14.07 of the Listing Rules in respect of the Further Acquisition of Affirm Shares, when aggregated with Previous Acquisitions of Affirm Shares by the Company in the preceding 12-month period, exceeds 25% but is less than 100%, the Further Acquisition of Affirm Shares constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and will be subject to reporting, announcement, circular and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

WRITTEN SHAREHOLDER’S APPROVAL

Pursuant to Rule 14.44 of the Listing Rules, shareholders’ approval may be obtained by written shareholders’ approval in lieu of convening a general meeting if (a) no shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Further Acquisition of Affirm Shares; and (b) written approval has been obtained from a shareholder or a closely allied group of shareholders who together hold more than 50% of the issued share capital of the Company giving the right to attend and vote at general meetings to approve the Further Acquisition of Affirm Shares.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder has any material interest in the Further Acquisition of Affirm Shares. Thus, if the Company were to convene a general meeting to approve the Further Acquisition of Affirm Shares, no Shareholder is required to abstain from voting on the resolutions in relation to the Further Acquisition of Affirm Shares. As such, the Further Acquisition of Affirm Shares may be approved by written Shareholders’ approval in accordance with Rule 14.44 of the Listing Rules.

The Board is pleased to announce that, in relation to written approval in lieu of holding a general meeting in respect of the Further Acquisition of Affirm Shares, it obtained the Shareholder’s approval from Yoho Bravo Limited which holds 599,658,000 shares (representing approximately 74.96% of the total issued share capital of the Company as at the date of this announcement) pursuant to Rule 14.44 of the Listing Rules. As a result, no extraordinary general meeting will be convened to consider the Further Acquisition of Affirm Shares.

A circular in relation to the Further Acquisition of Affirm Shares and other information required to be disclosed under the Listing Rules will be dispatched to the Shareholders, for information purposes only within 15 business days after the publication of this announcement, i.e., on or before 16 January 2024.

The Board announces that the Company has entered into the following transaction involving acquisition of listed securities.

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Further Acquisition of Affirm Shares

On 20 December 2023 (after trading hours of the Stock Exchange), further to the Previous Acquisitions of Affirm Shares as disclosed in the Previous Announcements, the Company has further acquired of an aggregate of 17,650 Affirm Shares through the open market at an aggregate consideration of approximately US$0.9 million (equivalent to approximately HK$7.0 million) (excluding transaction costs). The average price (excluding transaction costs) for the further acquisition of each Affirm Share was approximately US$50.74 (equivalent to approximately HK$394.75). The aggregate consideration of approximately US$0.9 million (equivalent to approximately HK$7.0 million) (excluding transaction costs) was financed by the Group’s existing internal financial resources.

As the Further Acquisition of Affirm Shares was conducted in the open market, the identities of the counterparties of the acquired Affirm Shares cannot be ascertained. To the best knowledge, information and belief of the Directors and having made all reasonable enquiries, the counterparties and the ultimate beneficial owner(s) of the counterparties of the acquired Affirm Shares are Independent Third Parties.

REASONS FOR AND BENEFITS OF THE FURTHER ACQUISITION OF AFFIRM SHARES

The Group is principally engaged in the manufacturing and trading of semiconductors, broadband infrastructure construction and the provision of integrated solution for smart domain application (including smart home, smart campus and smart communities).

The Group believes that technological innovation is an important engine for future economic development, and it can also drive the emerging applications in the smart living sector. The Group always hopes to leverage our own advantages in the field of smart technology to actively diversify the investments in the field of innovative technologies, in order to facilitate the technological development and create greater value for the Shareholders. Coinbase is the largest cryptocurrency exchange in the United States by trading volume.

Affirm is a financial technology company in the United States. As set out in the Previous Announcements, the Board holds positive views towards the financial performance and future prospect of Affirm. The Group considers that Further Acquisition of Affirm Shares can increase our holdings in these attractive investments and to further expand its investment portfolio with quality assets, which will enhance investment return for the Group.

As the Further Acquisition of Affirm Shares was made in the open market at prevailing market prices, the Directors are of the view that the terms of the Further Acquisition of Affirm Shares are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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INFORMATION ON THE COMPANY

The Company is an investment holding company and the Group is principally engaged in the manufacture and trading of electronic and electrical parts and components. The Group operates its business through three segments: (i) The Manufacturing segment is engaged in the sale of electronics and electrical parts and components produced by the Company. The products manufactured by the Company are mainly applied in smart consumer electronic devices; (ii) The Broadband Infrastructure and Smart Domain segment is engaged in the provision of broadband infrastructure construction services, broadband promotion services, and smart domain solutions; and (iii) The Trading segment is engaged in the trading of electronic and electrical parts and components sourced from third party suppliers.

INFORMATION ON AFFIRM

Affirm is a Delaware corporation and a financial technology company that builds the next generation platform for digital and mobile-first commerce. Affirm’s solutions, which are built on trust and transparency, are designed to make it easier for consumers to spend responsibly and with confidence, easier for merchants and commerce platforms to convert sales and grow, and easier for commerce to thrive.

The following financial information is extracted from the published documents of the Affirm Group:

	For the year ended	For the year ended	For the year ended	For the year ended
	30 June	2022	30 June	2023
	(audited)		(audited)
	US$’000	HK$’000	US$’000	HK$’000
Revenue	1,349,292	10,497,492	1,587,985	12,354,523
(Loss) before income taxes	(724,831)	(5,639,186)	(989,245)	(7,696,326)
Net (loss)	(707,417)	(5,503,704)	(985,345)	(7,665,984)

Based on Affirm’s published documents, the Affirm Group has an audited consolidated net assets value of approximately US$2,618 million (equivalent to approximately HK$20,368 million) as at 30 June 2022 and US$2,534 million (equivalent to approximately HK$19,715 million) as at 30 June 2023.

Based on Affirm’s published documents, the Affirm Group has an unaudited consolidated net asset value of approximately US$2,567 million (equivalent to approximately HK$19,971 million) as at 30 September 2023.

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IMPLICATIONS UNDER THE LISTING RULES

Further Acquisition of Affirm Shares

Pursuant to Rule 14.22 and Rule 14.23 of the Listing Rules for the purpose of classification of the transactions, as the Previous Acquisitions of Affirm Shares and the Further Acquisition of Affirm Shares involve the acquisition of Affirm Shares within a 12-month period, all transactions respectively contemplated thereunder are considered and are aggregated as one transaction at a total consideration of approximately US$3.2 million (equivalent to approximately HK$25.0 million).

The Further Acquisition of Affirm Shares, on a standalone basis, constitutes a discloseable transaction since one or more of the applicable percentage ratios (as defined under the Listing Rules) are more than 5% but all of such ratios are less than 25%.

As the highest applicable percentage ratio under Rule 14.07 of the Listing Rules in respect of the Previous Further Acquisitions of Affirm Shares, when aggregated with Previous acquisitions of Affirm Shares by the Company in the preceding 12-month period, exceeds 25% but is less than 100%, the Further Acquisition of Affirm Shares constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and will be subject to reporting, announcement, circular and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

WRITTEN SHAREHOLDER’S APPROVAL

Pursuant to Rule 14.44 of the Listing Rules, shareholders’ approval may be obtained by written shareholders’ approval in lieu of convening a general meeting if (a) no shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Further Acquisition of Affirm Shares; and (b) written approval has been obtained from a shareholder or a closely allied group of shareholders who together hold more than 50% of the issued share capital of the Company giving the right to attend and vote at general meetings to approve the Further Acquisition of Affirm Shares.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder has any material interest in the Further Acquisition of Affirm Shares. Thus, if the Company were to convene a general meeting to approve the Further Acquisition of Affirm Shares, no Shareholder is required to abstain from voting on the resolutions in relation to the Further Acquisition of Affirm Shares. As such, the Further Acquisition of Affirm Shares may be approved by written Shareholders’ approval in accordance with Rule 14.44 of the Listing Rules.

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The Board is pleased to announce that, in relation to written approval in lieu of holding a general meeting in respect of the Further Acquisition of Affirm Shares, it obtained the Shareholder’s approval from Yoho Bravo Limited which holds 599,658,000 shares (representing approximately 74.96% of the total issued share capital of the Company as at the date of this announcement), pursuant to Rule 14.44 of the Listing Rules. As a result, no extraordinary general meeting will be convened to consider the Further Acquisition of Affirm Shares.

A circular in relation to the Further Acquisition of Affirm Shares and other information required to be disclosed under the Listing Rules will be dispatched to the Shareholders, for information purposes only within 15 business days after the publication of this announcement, i.e., on or before 16 January 2024.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

“Affirm”	Affirm Holdings, Inc., a Delaware corporation whose Class
	A common stocks are listed on Nasdaq (trading symbol:
	AFRM)
“Affirm Group”	Affirm and its subsidiaries
“Affirm Share(s)”	Class A common stock(s) of Affirm
“Board”	the board of Directors of the Company
“Company”	Brainhole Technology Limited, a company incorporated
	in the Cayman Islands with limited liability, the issued
	Shares of which are listed on the Main Board of the Stock
	Exchange (stock code: 2203)
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Director(s)”	the director(s) of the Company
“Further Acquisition of	further Acquisition of 17,650 Affirm Shares by the
Affirm Shares”	Company as disclosed in this announcement
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong

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“Hong Kong”	means the Hong Kong Special Administrative Region of the
	PRC
“Independent Third Party(ies)”	third party(ies) independent of and not connected with the
	Company and its connected persons and is not acting in
	concert (as defined in the Codes on Takeovers and Mergers
	and Share Buy-backs) with any of the connected persons
	of the Company or any of their respective associates (as
	defined under the Listing Rules)
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Nasdaq”	National Association of Securities Dealers Automated
	Quotations Stock Market
“PRC”	the People’s Republic of China
“Previous Announcements”	the announcements of the Company dated 15 December
	2023 and 20 December 2023 in relation to, inter alia, the
	Previous Acquisitions of Affirm Shares
“Previous Acquisitions of	the series of acquisitions of 33,500 and 15,700 Affirm
Affirm Shares”	Shares by the Company on 14 December 2023 (after trading
	hours the Stock Exchange) and 19 December 2023 (after
	trading hours the Stock Exchange) respectively, as set out
	in the Previous Announcements
“Shareholders”	holder(s) of the Share(s)
“Share(s)”	ordinary share(s) in the issued share capital of the Company
“United States”	the United States of America
“US$”	United States dollars, the lawful currency of the United
	States
“%”	per cent.

By order of the Board Brainhole Technology Limited Zhang Liang Johnson Chairman and Executive Director

Hong Kong, 21 December 2023

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For the purpose of this announcement, all amounts denominated in US$ have been translated (for information only) into HK$ using the exchange rate of US$1.00:HK$7.78. Such translations shall not be construed as a representation that amounts of US$ were or may have been converted.

As at the date of this announcement, the Board comprises Mr. Zhang Liang Johnson and Ms. Wan Duo as executive Directors and Mr. Xu Liang, Mr. Chen Johnson Xi and Ms. Zhang Yibo as independent non-executive Directors.

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