Brainhole Technology Limited — Capital/Financing Update 2024

Feb 15, 2024

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)

DISCLOSEABLE 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 Coinbase Shares

On 14 February 2024 (after trading hours of the Stock Exchange), further to the Previous Acquisitions of Coinbase Shares and the Previous Disposals of Coinbase Shares as disclosed in the Previous Announcements, the Company has further acquired an aggregate of 5,710 Coinbase 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 IMPLICATION

Further Acquisition of Coinbase 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 Coinbase Shares, the Previous Disposals of Coinbase Shares and the Further Acquisition of Coinbase Shares involve acquisitions and disposals of Coinbase 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$1.4 million (equivalent to approximately HK$11.1 million).

As one or more of the applicable percentage ratio(s) (as defined in the Listing Rules) in respect of the (i) Further Acquisition of Coinbase Shares (standing alone) and (ii) the Previous Acquisitions of Coinbase Shares, the Previous Disposals of Coinbase Shares and the Further Acquisition of Coinbase Shares (in aggregate) exceed 5% but all are less than 25%, the Further 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.

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

Further Acquisition of Coinbase Shares

On 14 February 2024 (after trading hours of the Stock Exchange), further to the Previous Acquisitions of Coinbase Shares and the Previous Disposals of Coinbase Shares as disclosed in the Previous Announcements, the Company has further acquired an aggregate of 5,710 Coinbase 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 Coinbase Share was approximately US$156.76 (equivalent to approximately HK$1,219.63). 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 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.

INFORMATION ON COINBASE

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.

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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	7,839,444 60,990,874	3,194,208	24,850,938
(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.

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 at 30 September 2023.

REASONS FOR AND BENEFITS OF THE FURTHER 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.

Coinbase is the largest cryptocurrency exchange in the United States by trading volume. As set out in the Previous Announcements, the Board holds positive views towards the financial performance and future prospect of Coinbase. The Group considers that the Further Acquisition of Coinbase 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.

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As the Further 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 Further Acquisition of Coinbase Shares are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

Further Acquisition of Coinbase 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 Coinbase Shares, the Previous Disposals of Coinbase Shares and the Further Acquisition of Coinbase Shares involve acquisitions and disposals of Coinbase 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$1.4 million (equivalent to approximately HK$11.1 million).

As one or more of the applicable percentage ratio(s) (as defined in the Listing Rules) in respect of the (i) Further Acquisition of Coinbase Shares (standing alone) and (ii) the Previous Acquisitions of Coinbase Shares, the Previous Disposals of Coinbase Shares and the Further Acquisition of Coinbase Shares (in aggregate) exceed 5% but all are less than 25%, the Further 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.

DEFINITIONS

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

“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)

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“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 5,710 Coinbase Shares by the Company Coinbase Shares” as disclosed in this announcement

• “Group” the Company and its subsidiaries

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “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

• “Previous Acquisitions of Coinbase Shares”

• the series of acquisitions of an aggregate of 17,370 Coinbase Shares by the Company during the period from 4 December 2023 (after trading hours the Stock Exchange) and up to (and inclusive of) 27 December 2023 (after trading hours the Stock Exchange) as set out in the relevant Previous Announcements

• “Previous Announcements”

• the announcements of the Company dated 5 December 2023, 20 December 2023, 28 December 2023 and 25 January 2024 in relation to, inter alia, the Previous Acquisitions of Coinbase Shares and the Previous Disposals of Coinbase Shares

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• “Previous Disposals of the series of disposals of an aggregate of 13,920 Coinbase Coinbase Shares” Shares by the Company (including non-notifiable and notifiable transactions for the Company under Chapter 14 of the Listing Rules) during the period from 24 January 2024 (after trading hours the Stock Exchange) and up to (and inclusive of) 6 February 2024 (after trading hours the Stock Exchange) as set out in the relevant Previous Announcements

• “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

• “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, 15 February 2024

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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