Brainhole Technology Limited — Capital/Financing Update 2023

Dec 5, 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)

(1) DISCLOSEABLE TRANSACTION IN RELATION TO ACQUISITION OF LISTED SECURITIES; AND

(2) DISCLOSEABLE TRANSACTION IN RELATION TO DISPOSAL OF LISTED SECURITIES

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

Acquisition of Coinbase Shares

On 4 December 2023 (after trading hours of the Stock Exchange), the Company has acquired an aggregate of 10,700 Coinbase Shares through the open market at an aggregate consideration of approximately US$1.5 million (equivalent to approximately HK$11.9 million) (excluding transaction costs).

Disposal of NVIDIA Shares

On 4 December 2023 (after trading hours of the Stock Exchange), the Company has disposed of an aggregate of 1,970 NVIDIA 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).

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LISTING RULES IMPLICATION

Acquisition of Coinbase Shares

As one or more of the applicable percentage ratio(s) (as defined in the Listing Rules) in respect of the Acquisition of Coinbase Shares exceed 5% but all are less than 25%, the Acquisition of Coinbase Shares constitutes a discloseable transaction on the part of the Company and is subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

Disposal of NVIDIA Shares

As one or more applicable percentage ratio(s) (as defined under the Listing Rules) in respect of the Disposal of NVIDIA Shares exceed 5% but all are less than 25%, the Disposal of NVIDIA Shares constitutes a discloseable transaction on the part of the Company and is subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

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

Acquisition of Coinbase Shares

On 4 December 2023 (after trading hours of the Stock Exchange), the Company has acquired an aggregate of 10,700 Coinbase Shares through the open market at an aggregate consideration of approximately US$1.5 million (equivalent to approximately HK$11.9 million) (excluding transaction costs). The average price (excluding transaction costs) for the acquisition of each Coinbase Share was approximately US$143.35 (equivalent to approximately HK$1,115.28). The aggregate consideration of approximately US$1.5 million (equivalent to approximately HK$11.9 million) (excluding transaction costs) was financed by the Group’s existing internal financial resources.

As the Acquisition of Coinbase Shares was conducted in the open market, the identities of the counterparties of the acquired Coinbase 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 Coinbase Shares are Independent Third Parties.

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Disposal of NVIDIA Shares

On 4 December 2023 (after trading hours of the Stock Exchange), the Company has disposed of an aggregate of 1,970 NVIDIA 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), which are receivable in cash on settlement. The average price (excluding transaction costs) for the disposal of each NVIDIA Share was approximately US$457.67 (equivalent to approximately HK$3,560.69).

As the Disposal of NVIDIA Shares was conducted in the open market, the identities of the counterparties of the disposed NVIDIA 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 disposed NVIDIA Shares are Independent Third Parties.

INFORMATION ON COINBASE AND NVIDIA

Coinbase

Coinbase is a Delaware corporation and a cryptocurrency learning platform that build safe, trusted, easy-to-use technology and financial infrastructure products and services to enable any person or business with an internet connection to discover, transact, and engage with crypto assets and decentralised applications. Its products enable customers to access and participate in the cryptoeconomy, a new open financial system built upon crypto, in more than 100 countries and serve as a critical infrastructure layer to web3, a broad category of cryptopowered technologies including self-custody wallets, decentralised apps and services, and open community engagement platforms.

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

	For the year ended	For the year ended
	31 December 2021	31 December 2022
	(audited)	(audited)
	US$’000 HK$’000	US$’000 HK$’000
Revenue	7,354,753 57,219,978	3,148,815 24,497,781
(Loss)/Income before income taxes	3,026,947 23,549,648	(3,064,582) 23,842,448
Net (loss)/income	3,624,120 28,195,654	(2,624,949) (20,422,103)

Based on Coinbase’s published documents, the Coinbase Group has an audited consolidated net assets value of approximately US$6,382 million (equivalent to approximately HK$49,652 million) as at 31 December 2021 and US$5,455 million (equivalent to approximately HK$42,440 million) as at 31 December 2022.

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Based on Coinbase’s published documents, the Coinbase Group has an unaudited consolidated net asset value of approximately US$5,921 million (equivalent to approximately HK$46,065 million) as 30 September 2023.

NVIDIA

NVIDIA is a Delaware corporation and a software and fabless company which designs graphics processing units (GPUs), application programming interface (APIs) for data science and high-performance computing as well as system on a chip units (SoCs) for the mobile computing and automotive market. NVIDIA is a dominant supplier of artificial intelligence hardware and software. Its professional line of GPUs are used in workstations for applications in such fields as architecture, engineering and construction, media and entertainment, automotive, scientific research, and manufacturing design. In addition to GPU manufacturing, NVIDIA provides an API called CUDA that allows the creation of massively parallel programs which utilize GPUs.

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

	For the year	ended	For the year	ended
	30 January	2022	29 January	2023
	(audited)		(audited)
	US$’000	HK$’000	US$’000	HK$’000
Revenue	26,914	209,391	26,974	209,858
Net income	9,752	75,871	4,368	33,983

Based on NVIDIA’s published documents, the NVIDIA Group has an audited consolidated net assets value of approximately US$26,612 million (equivalent to approximately HK$207,041 million) as at 30 January 2022 and US$22,101 million (equivalent to approximately HK$171,946 million) as at 29 January 2023.

Based on NVIDIA’s published documents, the NVIDIA Group has an unaudited consolidated net asset value of approximately US$24,520 million (equivalent to approximately HK$190,766 million) as at 30 April 2023.

REASONS FOR AND BENEFITS OF THE ACQUISITION OF COINBASE 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.

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Coinbase is the largest cryptocurrency exchange in the United States by trading volume. The Board holds positive views towards the financial performance and future prospect of Coinbase. The Group considers that the Acquisition of Coinbase Shares is a good opportunity to acquire attractive investment and to expand its investment portfolio with quality assets, which will enhance investment return for the Group.

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

REASONS FOR AND BENEFITS OF THE DISPOSAL OF NVIDIA SHARES

As a result of the Disposal of NVIDIA Shares, the Group is expected to recognise a gain of approximately US$0.03 million (equivalent to approximately HK$0.2 million) being the difference between the consideration received from the Disposal of NVIDIA Shares and the acquisition cost of disposed NVIDIA Shares.

The Group considers that the Disposal of NVIDIA Shares represents an opportunity to allow the Group to reallocate the resources and investment portfolio. The Group has applied all of the proceeds from the Disposal of NVIDIA Shares of approximately US$0.9 million (equivalent to approximately HK$7.0 million) for the consideration for the Acquisition of Coinbase Shares.

As the Disposal of NVIDIA Shares was made in the open market at prevailing market price, the Directors are of the view that the terms of the Disposal of NVIDIA Shares are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

Acquisition of Coinbase Shares

As one or more of the applicable percentage ratio(s) (as defined in the Listing Rules) in respect of the Acquisition of Coinbase Shares exceed 5% but all are less than 25%, the Acquisition of Coinbase Shares constitutes a discloseable transaction on the part of the Company and is subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

Disposal of NVIDIA Shares

As one or more applicable percentage ratio(s) (as defined under the Listing Rules) in respect of the Disposal of NVIDIA Shares exceed 5% but all are less than 25%, the Disposal of NVIDIA Shares constitutes a discloseable transaction on the part of the Company and is subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

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DEFINITIONS

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

“Acquisition of	acquisition of 10,700 Coinbase Shares by the Company as
Coinbase Shares”	disclosed in this announcement
“Board”	the board of Directors of the Company
“Coinbase”	Coinbase Global, Inc., a Delaware corporation whose Class A
	common stocks are listed on Nasdaq (trading symbol: COIN)
“Coinbase Group”	Coinbase and its subsidiaries
“Coinbase Share(s)”	Class A Common stock(s) of Coinbase
“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
“Disposal of NVIDIA	disposal of 1,970 NVIDIA Shares by the Company as disclosed
Shares”	in this announcement
“Group”	the Company and its subsidiaries
“Hong Kong”	means the Hong Kong Special Administrative Region of the
	PRC
“Independent Third	third party(ies) independent of and not connected with the
Party(ies)”	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

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“NVIDIA” NVIDIA Corporation, a Delaware corporation whose common stocks are listed on Nasdaq (trading symbol: NVDA) “NVIDIA Group” NVIDIA and its subsidiaries “NVIDIA Share(s)” Common stock(s) of NVIDIA “Shareholders” holder(s) of the Share(s) “Share(s)” ordinary share(s) in the issued share capital of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “United States” the United States of America “HK$” Hong Kong dollars, the lawful currency of Hong Kong “US$” 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, 5 December 2023

For the purpose of this announcement, all amounts denominated in US$ has 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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