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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company.

Link-Asia International MedTech Group Limited 環亞國際醫療科技集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 1143)

PROPOSED RIGHTS ISSUE ON THE BASIS OF ONE (1) RIGHTS SHARE FOR EVERY TWO (2) EXISTING SHARES HELD ON RECORD DATE

Financial adviser to the Company

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Underwriter to the Rights Issue

PROPOSED RIGHTS ISSUE

The Company proposes to implement the Rights Issue on the basis of one (1) Rights Share for every two (2) existing Shares held on the Record Date at the Subscription Price of HK$0.20 per Rights Share, to raise up to approximately HK$65.2 million (before expenses) by issuing up to 325,773,210 Rights Shares (assuming all outstanding Share Options are being exercised and no other change in the share capital of the Company on or before the Record Date) to the Qualifying Shareholders.

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The net proceeds from the Rights Issue after deducting the expenses, which will be borne by the Company, are estimated to be not more than approximately HK$62.2 million (assuming all outstanding Share Options are being exercised and no other change in the share capital of the Company on or before the Record Date). Assuming the net proceeds from the Rights Issue will amount to approximately HK$62.2 million, the Company intends to apply the net proceeds from the Rights Issue as to (i) approximately HK$36.2 million for the expansion of the Group’s product range under the EMS and Distribution Products Businesses; (ii) approximately HK$18.1 million for the funding of potential merger and acquisition opportunities of ARS-licensed providers (i.e. assisted reproductive medical facilities such as hospitals and IVF centers) located in regions in the PRC, opening of new assisted reproductive medical centers in these regions, and/or operation of these medical centers; and (iii) approximately HK$7.9 million for general corporate and working capital purposes. In the event that there is an under-subscription of the Rights Issue, the net proceeds of the Rights Issue will be utilised in proportion to the above uses.

THE UNDERWRITING AGREEMENT

On 15 October 2021 (after trading hours), the Company entered into the Underwriting Agreement with the Underwriter, pursuant to which the Underwriter has conditionally agreed to underwrite, on a best effort basis, the Underwritten Shares up to 325,773,210 (assuming all outstanding Share Options are being exercised and no other change in the share capital of the Company on or before the Record Date), subject to the terms and conditions set out in the Underwriting Agreement, in particular the fulfilment of the conditions precedent contained therein. Details of the major terms and conditions precedent of the Underwriting Agreement are set out in the section headed ‘‘The Underwriting Agreement’’ in this announcement.

The Rights Issue is only underwritten on a best effort basis. Pursuant to the Company’s constitutional documents and the Companies Act, there are no requirements for minimum levels of subscription in respect of the Rights Issue. Subject to fulfilment or satisfaction of the conditions precedent of the Rights Issue, the Rights Issue shall proceed regardless of its level of acceptances, and up to 325,773,210 Rights Shares are committed to be subscribed subject, however, to any Scaling-down vis-a-vis the MGO Obligation or the Public Float Requirement.

In the event of under-subscription, any Rights Shares not taken up by the Qualifying Shareholders whether under PAL(s) or EAF(s), or transferees of nil-paid Rights Shares, and not subscribed by subscribers procured by the Underwriter (or either of them, whichever shall be appropriate) will not be issued, and hence, the size of the Rights Issue will be reduced accordingly. Investors are advised to exercise caution when dealing in the Shares.

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LISTING RULES IMPLICATIONS

As the Company has not conducted any rights issue or open offer within the 12-month period prior to the date of this announcement and the Rights Issue will not increase the issued share capital or the market capitalisation of the Company by more than 50% within the 12-month period immediately preceding the date of this announcement and the Rights Issue is not underwritten by a Director, chief executive or substantial shareholder of the Company (or any of their respective close associates), the Rights Issue is not subject to Shareholders’ approval under the Listing Rules.

GENERAL

Subject to the fulfillment of certain conditions of the Rights Issue, the Company will despatch the Prospectus Documents containing, among other matters, details of the Rights Issue, to the Qualifying Shareholders. The Company will despatch the Prospectus to the Excluded Shareholders for their information only, but the Company will not send the PALs and EAFs to the Excluded Shareholders.

WARNING OF THE RISKS OF DEALING IN SHARES AND THE NIL-PAID RIGHTS SHARES

Shareholders and potential investors of the Company should note that the Rights Issue is conditional upon, among others, the Underwriting Agreement having become unconditional and the Underwriter not having terminated the Underwriting Agreement in accordance with the terms thereof (a summary of which is set out in the paragraph headed ‘‘Termination of the Underwriting Agreement’’ under the section headed ‘‘The Underwriting Agreement’’). Accordingly, the Rights Issue may or may not proceed.

The Shares are expected to be dealt in on an ex-rights basis from Thursday, 21 October 2021. Dealings in the Rights Shares in nil-paid form are expected to take place from Wednesday, 3 November 2021 to Wednesday, 10 November 2021 (both days inclusive). Any Shareholder or other person contemplating transferring, selling or purchasing the Shares and/or Rights Shares in their nil-paid form is advised to exercise caution when dealing in the Shares and/or the nil-paid Rights Shares.

Any party who is in any doubt about his/her/its position or any action to be taken is recommended to consult his/her/its own professional adviser(s). Any Shareholder or other person dealing in the Shares or in the nil-paid Rights Shares up to the date on which all the conditions to which the Rights Issue is subject are fulfilled (and the date on which the Underwriter’s right of termination of the Underwriting Agreement ceases) will accordingly bear the risk that the Rights Issue may not become unconditional or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

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PROPOSED RIGHTS ISSUE

Further details of the Rights Issue are set out below:

Issue statistics

Basis of the Rights Issue : one (1) Rights Share for every two (2) existing Shares held on the Record Date Subscription Price : HK$0.20 per Rights Share Number of existing Shares in : 616,242,570 Shares issue as at the date of this announcement Number of Rights Shares : Up to 325,773,210 Rights Shares (assuming all outstanding Share Options are being exercised and no other change in the share capital of the Company on or before the Record Date)

Aggregate nominal value of : Up to HK$6,515,464.20 (assuming all outstanding the Rights Shares Share Options are being exercised and no other change in the share capital of the Company on or before the Record Date)

Number of Shares as enlarged : Up to 977,319,630 Shares (assuming all outstanding by the allotment and issue Share Options are being exercised and no other change of the Rights Shares in the share capital of the Company on or before the Record Date)

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Maximum funds to be raised : Up to approximately HK$65.2 million (assuming all before expenses outstanding Share Options are being exercised and no other change in the share capital of the Company on or before the Record Date)

Right of excess applications : Qualifying Shareholders may apply for Rights Shares in excess of their provisional entitlements

As at the date of this announcement, save for 35,303,850 outstanding Share Options, the Company had no other outstanding derivatives, options, warrants, convertible or exchangeable securities carrying rights to subscribe for, convert or exchange into Shares. Given the exercise price of the Share Options (i.e. HK$0.359) is higher than the prevailing market prices of the Shares, the Directors expected that no Share Options will be exercised on or before the Record Date.

Assuming no exercise of any outstanding Share Options and no change in the share capital of the Company on or before the Record Date, 308,121,285 Rights Shares to be issued pursuant to the terms of the Rights Issue represents (i) approximately 50% of the total number of issued Shares as at the date of this announcement; and (ii) approximately 33.33% of the issued share capital of the Company as enlarged by the allotment and issue of the Rights Shares.

As at the date of this announcement, the Company has not received any information from any Shareholders of their intention to take up the Rights Shares to be provisionally allotted to them under the Rights Issue.

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Subscription Price

The Subscription Price is HK$0.20 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares and, where applicable, application for Excess Rights Shares under the Rights Issue or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

The Subscription Price represents:

(i) a discount of approximately 7.83% to the closing price of HK$0.217 per Share as quoted on the Stock Exchange on the Last Trading Day;
(ii) a discount of approximately 9.91% to the average of the closing prices of approximately HK$0.222 per Share as quoted on the Stock Exchange for the five consecutive trading days up to and including the Last Trading Day;
(iii) a discount of approximately 10.19% to the average of the closing prices of approximately HK$0.2227 per Share as quoted on the Stock Exchange for the ten consecutive trading days up to and including the Last Trading Day;
(iv) a discount of approximately 13.38% to the average of the closing prices of approximately HK$0.2309 per Share as quoted on the Stock Exchange for the 30 consecutive trading days up to and including the Last Trading Day;
(v) a discount of approximately 5.35% to the theoretical ex-rights price of approximately HK$0.2113 per Share as adjusted for the effect of the Rights Issue, based on the closing price of HK$0.217 per Share as quoted on the Stock Exchange on the Last Trading Day;
(vi) a discount of approximately 61.55% to the net asset value (‘‘NAV’’) per Share of approximately HK$0.5201 as at 30 June 2021, based on the unaudited equity attributable to the Shareholders of approximately HK$320.5 million as at 30 June 2021 and 616,242,570 issued Shares as at the date of this announcement; and
(vii) a theoretical dilution effect (as defined under Rule 7.27B of the Listing Rules) represented by a discount of approximately 6.93% to the theoretical diluted price of approximately HK$0.2149 per Share (assuming no exercise of the Share Options) based on the benchmarked price of approximately HK$0.2224 per Share (as defined under Rule 7.27B of the Listing Rules, taking into account the higher of the closing price on the Last Trading Day of HK$0.217 per Share and the average of the closing prices of the Shares as quoted on the Stock Exchange for the five consecutive trading days immediately prior to the Last Trading Day of approximately HK$0.2224 per Share).

The net price per Rights Share (i.e. Subscription Price less cost and expenses incurred in the Rights Issue) upon full acceptance of the provisional allotment of Rights Shares will be approximately HK$0.191.

The Group has been incurring significant losses in the past few years. For the three years ended 31 December 2020 and the six months ended 30 June 2021, the Group incurred loss attributable to the Shareholders of approximately HK$58.0 million, HK$171.7 million, HK$173.1 million and HK$32.0 million, respectively. As at 30 June 2021, the NAV per

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Share was approximately HK$0.5201. The Directors are aware that the Shares had been traded at a discount to the NAV per Share (the ‘‘Discounts’’) in most of the time (i.e. 179 out of 246 trading days, or approximately 72.8% of the trading days) in the last 12 months from 5 October 2020 to 30 September 2021 (the ‘‘Review Period’’). The Discounts ranged from approximately 0.02% to approximately 57.12% with an average and median of approximately 36.42% and 33.67%, respectively. Having considered the financial performance of the Group in the past few years and the prevailing market prices which have been generally low during the last 12 months, the Directors consider the discount represented by the Subscription Price to the NAV per Share to be fair and reasonable.

The Subscription Price was set at a discount to the recent closing prices of the Shares aiming at lowering the further investment cost of the Shareholders so as to encourage them to take up their entitlements to maintain their shareholdings in the Company, thereby minimising dilution impact. The Subscription Price was determined after arm’s length negotiation between the Company and the Underwriter with reference to, among other things, (i) the market price of the Shares under the prevailing market conditions; (ii) the latest business performance and financial position of the Group; and (iii) the reasons for and benefits of Rights Issue as discussed in the section headed ‘‘Reasons for and benefits of the Rights Issue’’ in this announcement.

The Directors (including the independent non-executive Directors) consider the terms of the Rights Issue, including the Subscription Price, to be fair and reasonable and in the best interests of the Company and the Shareholders as a whole, after taking into account that (i) the Qualifying Shareholders who do not wish to take up their provisional entitlements under the Rights Issue are able to sell the nil-paid rights in the market; (ii) the Rights Issue allows the Qualifying Shareholders to subscribe for their pro-rata Rights Shares for the purpose of maintaining their respective existing shareholding interests in the Company and apply for Excess Rights Shares subject to the level of acceptance; (iii) the proceeds from the Rights Issue can fulfil the development plan of the Group; and (iv) the Subscription Price was determined with reference to the prevailing market prices and the financial performance of the Group in the past few years.

Qualifying Shareholders

The Company will send the Prospectus Documents to the Qualifying Shareholders only. For the Excluded Shareholders, the Company will send copies of the Prospectus to them for their information only, but no PALs and EAFs will be sent to the Excluded Shareholders. To qualify for the Rights Issue, a Shareholder must be registered as a member of the Company and not be an Excluded Shareholder on the Record Date. As at the date of this announcement, the Shares were not eligible securities for Southbound Trading under Shanghai Connect and Shenzhen Connect. As a result, the PRC Southbound Trading Investors cannot participate in the Rights Issue through ChinaClear.

Shareholders whose Shares are held by nominee companies (or which are deposited in CCASS) should note that the Board will regard a nominee company (including HKSCC Nominees Limited) as a single Shareholder according to the register of members of the Company. Shareholders with their Shares held by nominee companies (or which are deposited in CCASS) are advised to consider whether they would like to arrange for

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registration of the relevant Shares in the name of the beneficial owner(s) prior to the Record Date. Shareholders and investors of the Company should consult their professional advisers if they are in doubt.

In order to be registered as members of the Company on the Record Date, a Shareholder must lodge the relevant transfer(s) of Share(s) (with the relevant share certificates) with the Registrar at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong by 4:30 p.m. on Friday, 22 October 2021.

The last day of dealing in the Shares on cum-rights basis is Wednesday, 20 October 2021. The Shares will be dealt with on an ex-rights basis from Thursday, 21 October 2021.

Qualifying Shareholders who do not take up the Rights Shares to which they are entitled and Excluded Shareholders should note that their shareholdings in the Company will be diluted.

Rights of Overseas Shareholders

The Prospectus Documents are not intended to be registered under the applicable securities legislation of any jurisdiction other than Hong Kong. Overseas Shareholder(s) may not be eligible to take part in the Rights Issue as explained below.

In compliance with the necessary requirements of the Listing Rules, the Company will make enquiries regarding the feasibility of extending the Rights Issue to the Overseas Shareholder(s) (if any). If based on legal opinions provided by the legal advisers to the Company, the Directors consider that it is necessary or expedient not to offer the Rights Shares to the Overseas Shareholder(s) on account either of the legal restrictions under the laws of the relevant place(s) or the requirements of the relevant regulatory body or stock exchange in that (those) place(s), the Rights Issue will not be extended to such Overseas Shareholder(s). As at the date of this announcement, there is one Overseas Shareholder with registered addresses situated in the British Virgin Islands. The basis for excluding the Excluded Shareholder(s), if any, from the Rights Issue will be set out in the Prospectus. The Company will send the Prospectus only (without the PAL and the EAF) and a letter explaining the circumstances in which the Excluded Shareholders are not permitted to participate in the Rights Issue to the Excluded Shareholders for their information only.

Arrangements will be made for Rights Shares which would otherwise have been provisionally allotted to the Excluded Shareholder(s) to be sold in the market in their nilpaid form as soon as practicable after dealings in the nil-paid Rights Shares commence, if a premium (net of expenses) can be obtained. The proceeds of such sale, less expenses and stamp duty, of more than HK$100 will be paid pro rata to the relevant Excluded Shareholder(s). The Company will retain individual amounts of HK$100 or less for the benefit of the Company. Any unsold entitlement of Excluded Shareholder(s) to the Rights Shares and any Rights Shares provisionally allotted but not accepted by the Qualifying Shareholders will be made available for excess applications by Qualifying Shareholders under the EAF(s).

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Overseas Shareholders should note that they may or may not be entitled to the Rights Issue subject to the results of the enquiries made by the Company pursuant to the Listing Rules. Accordingly, Overseas Shareholders should exercise caution when dealing in the securities of the Company.

Closure of register of members

The register of members of the Company will be closed from Monday, 25 October 2021 to Friday, 29 October 2021 (both dates inclusive) for determining the Shareholders’ entitlements to the Rights Issue.

No transfer of Shares will be registered during the above book closure periods.

Basis of provisional allotments

The basis of the provisional allotment shall be one (1) Rights Share for every two (2) existing Shares in issue and held by the Qualifying Shareholders at the close of business on the Record Date at the Subscription Price payable in full on acceptance and otherwise on the terms and subject to the conditions set out in the Underwriting Agreement and the Prospectus Documents.

Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by lodging a duly completed PAL and a cheque or a banker’s cashier order for the sum payable for the Rights Shares being applied for with the Registrar on or before the Latest Time for Acceptance. Any holdings (or balance of holdings) of less than two (2) Shares will not entitle their holders to be provisionally allotted a Rights Share. Please refer to the arrangement as referred to in the paragraph headed ‘‘Fractional entitlements of the Rights Shares’’ below.

Fractional entitlements of the Rights Shares

In any event, fractions of the Rights Shares will not be provisionally allotted to any of the Qualifying Shareholders. Fractional entitlements will be rounded down to the nearest whole number of Rights Shares. Any Rights Shares created from the aggregation of fractions of the Rights Shares will be made available for excess application by the Qualifying Shareholders as described in the paragraph headed ‘‘Application for Excess Rights Shares’’ below. Should there be no excess application by the Qualifying Shareholders, those Rights Shares created from the aggregation of fraction of the Rights Shares may or may not be taken up by the Underwriter (or either of them, whichever shall be appropriate).

Status of the Rights Shares

The Rights Shares, when allotted and issued, shall rank pari passu in all respects with the Shares then in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of allotment of the Rights Shares in their fully-paid form.

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Share certificates and refund cheques for the Rights Issue

Subject to the fulfillment of the conditions of the Rights Issue, certificates for all fully paid Rights Shares are expected to be posted to those entitled thereto by ordinary post at their own risk on or before Tuesday, 23 November 2021. Refund cheques in respect of wholly or partially unsuccessful applications for Excess Rights Shares (if any) are expected to be posted on or before Tuesday, 23 November 2021 by ordinary post to the applicants at their own risk, to their registered addresses.

Application for Excess Rights Shares

The Company shall make the Excess Rights Shares available for subscription by the Qualifying Shareholders by means of EAFs, and the Excess Rights Shares represent:

(i) any nil-paid Rights Shares provisionally allotted but not accepted by any of the Qualifying Shareholders or otherwise subscribed for by transferees of nil-paid Rights Shares prior to the Latest Time for Acceptance;
(ii) subject to the provisions of the Underwriting Agreement, any entitlements of the Excluded Shareholders provisionally allotted to a nominee of the Company which are left unsold;
(iii) any of the Rights Shares created from the aggregation of fractions of the Rights Shares; and
(iv) the Scale-down PAL Shares (if any) and the Scale-down EAF Shares (if any).

Application for Excess Rights Shares can be made by the Qualifying Shareholders only and by duly completing and signing an EAF (in accordance with the instructions printed therein) and lodging the same with a separate remittance for the Excess Rights Shares being applied for with the Registrar no later than 4:00 p.m. on Monday, 15 November 2021.

The Directors will, upon consultation with the Underwriter, allocate any Excess Rights Shares at their discretion on a fair and equitable basis on the following principles:

(i) any Excess Rights Shares will be allocated to Qualifying Shareholders who apply for them on a pro rata basis by reference to the number of the Excess Rights Shares applied for;
(ii) reference will only be made to the number of Excess Rights Shares being applied for but no reference will be made to the Rights Shares subscribed through applications by PALs or the existing number of Shares held by Qualifying Shareholders;
(iii) if the aggregate number of Rights Shares not taken up by the Qualifying Shareholders and/or transferees of nil-paid Rights Shares under the PALs is greater than the aggregate number of Excess Rights Shares applied for through the EAFs, the Company will allocate to each Qualifying Shareholder who applies for Excess Rights Shares in full application; and
(iv) no preference will be given to topping up odd-lots to whole board lots.

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Shareholders with their Shares held by a nominee company (or which are deposited in CCASS) should note that the Board will regard such nominee company (including HKSCC Nominees Limited) as a single Shareholder according to the register of members of the Company. Accordingly, Shareholders should note that the aforesaid arrangement in relation to the allocation of the Excess Rights Shares will not be extended to the relevant beneficial owners individually save and except for the beneficial owner(s) which the Company may permit in its absolute discretion. Shareholders with their Shares held by a nominee company (or which are held in CCASS) are advised to consider whether they would like to arrange for the registration of the relevant Shares under their own names on or prior to the Record Date for the purpose of the Rights Issue. Shareholders who would like to have their names registered on the register of members of the Company on the Record Date, must lodge all necessary documents with the Registrar for registration by no later than 4:30 p.m. on Friday, 22 October 2021. Shareholders and investors of the Company should consult their professional advisers if they are in doubt as to their status.

Scale-down of subscriptions to avoid the triggering of the MGO Obligation and noncompliance of the Public Float Requirement

Pursuant to the Underwriting Agreement, as the Rights Issue is only underwritten by the Underwriter on a best effort basis, and so as to avoid the unwitting triggering of the MGO Obligation and/or any non-compliance with the Public Float Requirement, all applications for Rights Shares whether under the PAL(s) or the EAF(s), or by transferees of nil-paid Rights Shares, or by subscribers procured by the Underwriter (or either of them, whichever shall be appropriate) will be made on the basis that the applications are to be scaled-down by the Company to a level which (i) does not trigger an MGO Obligation on the part of the applicant or parties acting in concert with him/her/it; and/or (ii) does not result in the noncompliance of the Public Float Requirement on the part of the Company. Any subscription monies for the Scale-down PAL Shares or the Scale-down EAF Shares will be refunded to the applicants, and the Scale-down PAL Shares and the Scale-down EAF Shares will be made available for subscription by other Qualifying Shareholders through the EAF(s).

In addition, under and/or pursuant to the Scaling-down, any application for Rights Shares, whether under PAL(s) or EAF(s), shall be subject to the scale-down mechanisms of the Rights Issue as determined by the Company to levels which do not trigger any MGO Obligation or non-compliance of the Public Float Requirement. Such scale-down of applications of Rights Shares shall operate on a fair and equitable basis under the following principles: (i) EAF(s) should be scaled down before PAL(s); and (ii) where the scale-down is necessitated by the exceeding of shareholding by a group rather than an individual Shareholder, the allocations of EAF(s) and PAL(s) to members of the affected group should be made on a pro rata basis by reference to the number of Shares held by the affected applicants on the Record Date, but for avoidance of any doubt, any or any such onward allocation(s) shall be subject to the Scaling-down as well.

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Arrangement on odd lots trading

In order to facilitate the trading of odd lots (if any) of the Shares, the Company will appoint a designated broker to arrange for matching service on a best effort basis regarding the sale and purchase of odd lots of the Shares for a limited period of time. Shareholders should note that matching of the sale and purchase of odd lots of the Shares is not guaranteed. Any Shareholder who is in any doubt about the odd lots arrangement is recommended to consult his/her/its own professional advisers. Further details in respect of the odd lots trading arrangement will be set out in the Prospectus.

Application for listing of the Rights Shares

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Rights Shares, in both their nil-paid and fully-paid forms.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms on the Stock Exchange as well as compliance with the stock admission requirements of HKSCC, the Rights Shares in both their nil-paid and fullypaid forms will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement dates of the dealings in the Rights Shares in both their nil-paid and fully-paid forms or such other dates as may be determined by HKSCC.

Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Dealing in the Rights Shares in both their nil-paid and fully-paid forms which are registered in the register of members of the Company in Hong Kong will be in the board lots of 4,000 Rights Shares and will be subject to the payment of stamp duty, Stock Exchange trading fee, SFC transaction levy, investor compensation levy or any other applicable fees and charges in Hong Kong.

Shareholders are advised to consult their professional advisers if they are in doubt as to the taxation implications of the receipt, purchase, holding, exercising, disposing of or dealing in, the nil-paid Rights Shares or the fully-paid Rights Shares and, regarding Excluded Shareholders, their receipt of the net proceeds, if any, from sales of the nil-paid Rights Shares on their behalf.

Condition of the Rights Issue

The Rights Issue is conditional upon the Underwriting Agreement having become unconditional and not being terminated in accordance with the terms thereof.

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THE UNDERWRITING AGREEMENT

The Underwriting Agreement

Principal terms of the Underwriting Agreement

Date : 15 October 2021 (after trading hours) Underwriter : KOALA Securities Limited Number of Rights Shares to : Up to 325,773,210 Rights Shares (assuming all be underwritten outstanding Share Options are being exercised and no other change in the share capital of the Company on or before the Record Date) underwritten by the Underwriter on a best effort basis pursuant to the terms and conditions of the Underwriting Agreement. Underwriting Commission : 3% of the aggregate Subscription Price in respect of such number of the Rights Shares being subscribed under the Rights Issue.

The Underwriter is a company incorporated in Hong Kong with limited liability and a corporation licensed to carry on Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities under the SFO whose ordinary course of business includes underwriting of securities. To the best of the Directors’ knowledge, information and belief, the Underwriter and its ultimate beneficial owner(s) are Independent Third Parties.

The terms of the Underwriting Agreement, including the underwriting commission rate, were determined after arm’s length negotiation between the Company and the Underwriter with reference to the existing financial position of the Group, the size of the Rights Issues, and the current and expected market condition. The Directors consider the entering into of the Underwriting Agreement with the Underwriter and the terms of the Underwriting Agreement (including the underwriting commission) to be fair and reasonable and in the interest of the Company and the Shareholders as a whole.

Save for the Underwriting Agreement, the Company has not entered into any agreement, arrangement, understanding or undertaking in regard of the Rights Issue with the Underwriter or any of its connected persons and their respective associate.

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Conditions of the Underwriting Agreement

The Underwriting Agreement is conditional upon the following conditions being fulfilled or waived (as appropriate):

(i) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked the approval for the listing of, and permission to deal in, the Rights Shares (in their nil-paid and fully-paid forms) prior to the Latest Time for Termination;
(ii) the filing and registration of all the Prospectus Documents (together with any other documents required by applicable law or regulation to be annexed thereto) with the Registrar of Companies in Hong Kong by no later than the Prospectus Posting Date;
(iii) the posting of the Prospectus Documents to the Qualifying Shareholders and the posting of the Prospectus to the Excluded Shareholders for information only, if any, by no later than the Prospectus Posting Date;
(iv) the Underwriting Agreement not being terminated by the Underwriter pursuant to the terms hereof on or before the Latest Time for Termination;
(v) there being no breach of the undertakings and obligations of the Company under the terms of the Underwriting Agreement at the Latest Time for Termination;
(vi) the Company having complied with all applicable laws and regulations;
(vii) each party having obtained all necessary consent and/or approval for entering into the Underwriting Agreement or the transactions contemplated herein;
(viii) the entering into of binding agreements by the Underwriter with certain subscriber(s) procured by the Underwriter and/or sub-underwriter(s), which shall be Independent Third Parties, for placing and/or sub-underwriting the Rights Shares, such that neither the Underwriter nor any of the subscriber(s) procured by the Underwriter and/or subunderwriter(s) and/or party or parties acting in concert (having the meaning as set out in the Takeovers Code) with the respective subscribers or any of the connected persons or associates of the respective subscribers shall be interested in 30% or more of the issued share capital of the Company as enlarged by the Rights Issue;
(ix) each condition to enable the Rights Shares in their nil-paid or fully-paid forms to be admitted as eligible securities for deposit, clearance and settlement in CCASS having been satisfied on or before the Business Day prior to the commencement of trading of the Rights Shares (in their nil paid and fully-paid forms, respectively) and no notification having been received by the Company from HKSCC by such time that such admission or facility for holding and settlement has been or is to be refused;
(x) there being no Specified Event occurring on or before the Latest Time for Termination: and
(xi) the Underwriter having received from the Company all the documents required under the Underwriting Agreement in such form and substance satisfactory to the Underwriter.

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Save for the conditions (v) and (xi) which can be waived by the Underwriter and the Company jointly, none of the above conditions can be waived. If any of the conditions referred to above is not fulfilled, or waived (where applicable) by the Latest Time for Termination, the Rights Issue will not proceed.

Termination of the Underwriting Agreement

If, prior to the Latest Time for Termination:

(i) in the absolute opinion of the Underwriter, the success of the Rights Issue would be materially and adversely affected by:
(a) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the absolute opinion of the Underwriter materially and adversely affects the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Rights Issue; or
(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date hereof) of a political, military, financial, economic or other nature (whether or not ejusdem generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the absolute opinion of the Underwriter materially and adversely affects the business or the financial or trading position or prospects of the Group as a whole or materially and adversely prejudice the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue; or
(ii) any adverse change in market conditions (including without limitation, any change in fiscal or monetary policy, or foreign exchange or currency markets, suspension or material restriction on trading in securities) occurs which in the absolute opinion of the Underwriter is likely to materially or adversely affect the success of the Rights Issue or otherwise makes it inexpedient or inadvisable to proceed with the Rights Issue; or
(iii) there is any change in the circumstances of the Company or any member of the Group which in the absolute opinion of the Underwriter will adversely affect the prospects of the Company, including without limiting the generality of the foregoing the presentation of a petition or the passing of a resolution for the liquidation or winding up or similar event occurring in respect of any of member of the Group or the destruction of any material asset of the Group; or
(iv) any event of force majeure including, without limiting the generality thereof, any act of God, war, riot, public disorder, civil commotion or unrest, fire, flood, explosion, epidemic, pandemic, terrorism, strike or lock-out which would, in the absolute opinion of the Underwriter materially and adversely affects the business or the financial or trading position or prospects of the Group as a whole; or

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(v) in the absolute opinion of the Underwriter, there occurs any other material adverse change in relation to the business or the financial or trading position or prospects of the Group as a whole whether or not ejusdem generis with any of the foregoing; or
(vi) any matter which, had it arisen or been discovered immediately before the Prospectus Posting Date and not having been disclosed in the Prospectus Documents, would have constituted, in the absolute opinion of the Underwriter, a material omission in the context of the Rights Issue; or
(vii) any suspension in the trading of securities generally or the Company’s securities on the Stock Exchange for a period of more than twenty (20) consecutive trading days otherwise than due to or in connection with or in relation to the Underwriting Agreement and/or the Rights Issue and excluding any suspension in connection with the clearance of this announcement or other matters in connection with the Underwriting Agreement and/or the Rights Issue; or
(viii) the Prospectus Documents when published contains information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or any applicable regulations) which has not prior to the date hereof been publicly announced or published by the Company and which may in the absolute opinion of the Underwriter be material to the Group as a whole upon completion of the Rights Issue and is likely to affect materially and adversely the success of the Rights Issue.

the Underwriter shall be entitled by a notice in writing to the Company, served prior to the Latest Time for Termination, to terminate the Underwriting Agreement.

If the Underwriter terminates the Underwriting Agreement, the Rights Issue will not proceed. A further announcement would be made by the Company if the Underwriting Agreement is terminated by the Underwriter.

EXPECTED TIMETABLE

Set out below is the expected timetable for the Rights Issue which is indicative only and has been prepared on the assumption that all the conditions of the Rights Issue will be fulfilled:

Event 2021

Publication of this announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 15 October Last day of dealings in Shares on a cum-rights basis . . . . . . . . . . . . . . . . Wednesday, 20 October First day of dealings in the Shares on an ex-rights basis . . . . . . . . . . . . . . . Thursday, 21 October Latest time for lodging transfer of Shares in order to qualify for the Rights Issue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Friday, 22 October Register of members of the Company closes (both days inclusive) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 25 October to Friday, 29 October

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Record Date for determining entitlements to the Rights Issue. . . . . . . . . . . . . Friday, 29 October Register of members of the Company re-opens. . . . . . . . . . . . . . . . . . . . . . . . . Monday, 1 November Despatch of Prospectus Documents (in the case of Excluded Shareholders, the Prospectus only) . . . . . . . . . Monday, 1 November First day of dealing in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Wednesday, 3 November Latest time for splitting of the PAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Friday, 5 November Last day of dealing in nil-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . Wednesday, 10 November Latest Time for Acceptance of and payment for the Rights Shares and application and payment for Excess Rights Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Monday, 15 November Latest Time for Termination of the Underwriting Agreement and for the Rights Issue to become unconditional (if applicable) . . . . . . . . . . . . . 4:00 p.m. on Tuesday, 16 November Announcement of allotment results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 22 November Despatch of certificates for fully-paid Rights Shares and refund cheques, if any, in respect of wholly or partially unsuccessful application for Excess Rights Shares. . . . . . . . . Tuesday, 23 November Expected first day of dealings in fully-paid Rights Shares . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Wednesday, 24 November Designated broker starts to stand in the market to provide matching services for odd lots of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Wednesday, 24 November Designated broker ceases to stand in the market to provide matching services for odd lots of Shares. . . . . . . . . . . . . . . . . Wednesday, 15 December Dates or deadlines specified in expected timetable above or in other parts of this announcement are indicative only and may be varied by agreement between the Company and the Underwriter. Any changes to the expected timetable will be published or notified to the Shareholders and the Stock Exchange as and when appropriate.

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EFFECT OF BAD WEATHER ON THE LATEST TIME FOR ACCEPTANCE OF AND PAYMENT FOR THE RIGHTS SHARES

The latest time for acceptance of and payment for the Rights Shares will not take place if there is a tropical cyclone warning signal no. 8 or above, or a ‘‘black’’ rainstorm warning:

(i) in force in Hong Kong at any local time before 12: 00 noon and no longer in force after 12:00 noon on Monday, 15 November 2021. Instead, the latest time for acceptance of and payment for the Rights Shares will be extended to 5:00 p.m. on the same Business Day; or
(ii) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on Monday, 15 November 2021. Instead, the latest time for acceptance of and payment for the Rights Shares will be rescheduled to 4:00 p.m. on the following Business Day which does not have either of those warnings in force in Hong Kong at any time between 9:00 a.m. and 4:00 p.m.

If the latest time for acceptance of and payment for the Rights Shares does not take place on or before 4:00 p.m. on Monday, 15 November 2021, the dates mentioned in this section may be affected. An announcement will be made by the Company in such event.

REASONS FOR AND BENEFITS OF THE RIGHTS ISSUE

The Group is principally engaged in (i) provision of electronic manufacturing services (‘‘EMS’’); (ii) marketing and distribution of communication products; (iii) real estate supply chain services; (iv) assisted reproduction medical technology business; and (v) securities and other assets investment. The Group’s products under the EMS business and the business segment of marketing and distribution of communication products (collectively, the ‘‘EMS and Distribution Products Businesses’’) include corded and cordless residential telephones and small and medium business phone systems, appliances and appliances control products, portable storage devices, multimedia products and beauty care equipment.

Circumstances leading to the Rights Issue

For the three years ended 31 December 2020 and the six months ended 30 June 2021, (i) revenue generated from the EMS and Distribution Products Businesses amounted to approximately HK$666.6 million, HK$619.0 million, HK$580.2 million and HK$321.9 million, accounting for approximately 97.8%, 98.3%, 97.5% and 99.1% of the Group’s revenue; (ii) the Group’s overall gross profit margin was approximately 21.6%, 21.6%, 26.0% and 21.7%; (iii) revenue generated from overseas markets (outside the PRC and Hong Kong) accounted for approximately 82.4%, 82.0%, 85.3% and 88.4%; and (iv) loss attributable to the Shareholders amounted to approximately HK$58.0 million, HK$171.7 million, HK$173.1 million and HK$32.0 million, respectively.

As a result of an overall weak demand for both residential and business phone sectors in the Group’s major markets, the EMS and Distribution Products Businesses recorded a contraction of approximately 7.1% for the year ended 31 December 2019 as compared to the previous year. Following the outbreak of the COVID-19 pandemic in early 2020 when factories in the PRC were forced to close and the weak market demand in face of economic uncertainty, revenue generated from the EMS and Distribution Products Businesses further

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decreased by approximately 6.3% for the year ended 31 December 2020 as compared to the previous year. As the market demand has started to recover since the last quarter of 2020, revenue generated from the EMS and Distribution Products Businesses increased by approximately 30.3% in the first half of 2021 as compared to the corresponding period in 2020. As disclosed in the interim report of the Company for the six months ended 30 June 2021 (the ‘‘2021 Interim Report’’), the Directors strive to continue developing the existing core business and actively explore and find new business growth. As at the date of this announcement, the Company did not have any intention to dispose of or scale down its existing core businesses (i.e. the EMS and Distribution Products Businesses).

Taking into account (i) the prolonged loss-making position of the Group for the three years ended 31 December 2020 and the six months ended 30 June 2021; (ii) the EMS and Distribution Products Businesses have experienced a contraction in revenue since 2018 before recovering from the COVID-19 pandemic in the first half of 2021; (iii) the financial performance and growth of the Group in the short to medium term are highly dependent on the EMS and Distribution Products Businesses which contributed over 95% of the Group’s total revenue in the past years; (iv) the Directors intend to continue developing the Group’s existing core business which is the EMS and Distribution Products Businesses, as disclosed in the 2021 Interim Report; (v) the EMS and Distribution Products Businesses are expected to experience gradual recovery as the COVID-19 pandemic fades, as evidenced in the financial performance of the Group in the first half of 2021; and (vi) it has been one of the Group’s business strategies to focus on potential market segments to target products with higher profit margins, including beauty care and medical electronic products, as disclosed in the Company’s prospectus dated 14 January 2011, the Directors consider that there is a need to expand and broaden its product range in the EMS and Distribution Products Businesses with a view to providing a growth engine to the Group’s existing core businesses and improving the Group’s profitability in the short to medium term.

While the Group will continue to develop and expand its existing core businesses, as disclosed in the 2021 Interim Report, it has proactively explored and looked for new business growth spots in high-end medical and healthcare services, including assisted reproductive services (‘‘ARS’’) and stem cell treatments, with a view to diversifying its income sources and providing a new growth engine to the Group’s businesses. The Directors consider that there is a growth potential in the ARS market in the PRC given an increased prevalence of infertility caused by lifestyle changes, an increase in the average age of the parents when having their first childbirth, an increase in public awareness on birth defects and prevention, the relaxation of three-child policy in the PRC to improve its population structure, and the relatively low market penetration of ARS in the PRC as compared with other countries such as Japan, Europe and the U.S..

The Company plans to tap into the ARS business given (a) its growth potential as stated above; (b) the synergy between the ARS business and sales of the New Products (defined below) as stated in the section headed ‘‘Intended use of proceeds’’ below; and (c) the relevant experience of the Group’s management team as stated in the section headed ‘‘Relevant experience of the Group’s management team in trading of the New Products and the ARS Business’’ below.

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Generally speaking, as stated in the 2021 Interim Report, the Group will (i) actively consolidate its resources and act with prudence in pursuing continuous development in its core businesses; and (ii) capture the trends and investment opportunities to diversify income sources for the Group.

Based on the above, the Group intends to conduct the Rights Issue to raise the required funds for the expansion of the existing EMS and Distribution Products Businesses in terms of the product offerings and the development of its ARS business.

The current financial resources are insufficient to fund the Group’s expansion of its existing core businesses and development of new business with growth potential

As at 30 June 2021, the Group had (i) trade receivables of approximately HK$140.3 million; (ii) bank and cash balances of approximately HK$208.6 million; (iii) trade payables of approximately HK$59.5 million; (iv) accruals and other payables of approximately HK$202.6 million; and (v) borrowings of approximately HK$18.6 million. Assuming all trade receivables were duly received which, together with the bank and cash balances, were used to settle all trade payables, accruals and other payables and borrowings, the remaining financial resources available would be approximately HK$68.2 million (the ‘‘Available Fund’’).

Based on the opening and ending inventory levels and cost of inventories, the Group’s total purchase amounted to approximately HK$446.7 million, HK$440.9 million and HK$261.8 million, translating into approximately HK$37.2 million, HK$36.7 million and HK$43.6 million per month (i.e. approximately HK$39.2 million per month on average), for the two years ended 31 December 2020 and the six months ended 30 June 2021, respectively. During the same periods, total employee benefits expenses (excluding equity-settled share-based payments) amounted to approximately HK$212.3 million, HK$178.8 million and HK$93.4 million, translating into approximately HK$17.7 million, HK$14.9 million and HK$15.6 million per month (i.e. approximately HK$16.1 million per month on average), respectively.

Taking into account (i) the Available Fund only represents approximately 1.2 times of the monthly average purchase and employee benefits expenses (i.e. approximately HK$55.3 million per month in aggregate); (ii) the uncertainty as to the timing of the settlement of trade receivables by the Group’s customers; and (iii) other working requirements of the Group such as other selling and distribution and administrative expenses (e.g. research and development expenses), the Directors consider that the existing financial resources of the Group can only serve as a buffer to support the Group’s daily operations and are not sufficient for the Group to expand its existing businesses and develop new business with growth potential.

Alternative means of fund raising

The Directors have considered other alternative means of fund raising, such as debt financing/bank borrowings and placing of new Shares, before resolving to the Rights Issue. The Company has considered the pros and cons of different fund-raising options. In respect of debt financing, the Directors consider it is difficult to obtain any debt financing at terms that are acceptable to the Company as, save for the collaterals for the existing banking facilities, the Group does not have any other significant assets which is satisfactory to the banks and can serve as collaterals for further bank loans. The Company has approached two

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commercial banks, but it has not received any concrete feedback from them. In addition, the Directors do not consider debt financing to be desirable given the requirement of interest payments and the impact on the Group’s gearing position.

The Company has conducted placing of new Shares on 15 June 2021 and such placing was completed on 30 June 2021. The Company has utilised all the general mandate granted to the Directors by the Shareholders at the previous annual general meeting of the Company held on 31 May 2021 to allot and issue new Shares and the Company cannot conduct further placing of new Shares unless the Shareholders approve the refreshment of general mandate limit at an extraordinary general meeting of the Company or the Company conduct further placing of new Shares by way of specific mandate.

In comparison, the Rights Issue is pre-emptive in nature, allowing Qualifying Shareholders to maintain their respective pro-rata shareholding through their participation in the Rights Issue. The Rights Issue allows the Qualifying Shareholders to (i) increase their respective interests in the shareholding of the Company by acquiring additional rights entitlement in the open market (subject to the availability); or (ii) reduce their respective interests in the shareholding of the Company by disposing of their rights entitlements in the open market (subject to the market demand). As an open offer does not allow the trading of rights entitlements, rights issue is preferred. Accordingly, the Directors consider that fund raising through the Rights Issue is in the interests of the Company and the Shareholders as a whole.

As at the date of this announcement, other than the Rights Issue, the Company did not have any other fund-raising plan.

INTENDED USE OF PROCEEDS

The net proceeds from the Rights Issue after deducting the expenses are estimated to be approximately HK$62.2 million (assuming no change in the number of Shares in issue on or before the Record Date other than the full exercise of the Share Options).

The Company intends to apply the net proceeds from the Rights Issue as to:

(i) approximately HK$36.2 million for the expansion of the Group’s product range under the EMS and Distribution Products Businesses, including but not limited to (a) obtaining distribution rights in respect of electronic products (the ‘‘New Products’’) which entail higher gross profit margins, including beauty care and medical electronic products; (b) purchasing the New Products; and (c) promoting and marketing the New Products to potential customers in the PRC and overseas.

Instead of manufacturing the New Products itself, the Group plans to procure the New Products from some authorised suppliers in the PRC and overseas. In addition to beauty care products, the New Products will include middle to high end medical electronic products, such as embryo incubator, used by ARS-licensed providers such as public and private hospitals and in vitro fertilisation (‘‘IVF’’) centers. The unit purchase prices of these middle to high end medical electronic products typically range from approximately RMB1.2 million to approximately RMB2.3 million. Depending on the market condition and the orders from ARS-licensed providers, the Group plans to procure 10 to 20 units of these middle to high end medical electronic products for sales to ARS-licensed providers in the PRC and/or IVF centers in Southeast Asia (e.g.

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Cambodia and Thailand). Although the Group has no capital commitment for the sales of the New Products, ARS-licensed providers will typically request a relatively long credit term from their suppliers including the Group.

The Directors consider that procurement and sales of the New Products is a natural extension of the existing EMS and Distribution Products Businesses, after taking into account (a) trading of electronic products has always been a part of the EMS and Distribution Products Businesses, in addition to EMS; (b) it has been one of the Group’s business strategies to focus on potential market segments to target products with higher profit margins, including beauty care and medical electronic products, as disclosed in the Company’s prospectus dated 14 January 2011; and (c) although the nature of the New Projects is different from that of current electronic products, the management team of the Group has relevant experience and expertise in procuring and selling the New Products including middle to high end medical electronic products, details of which are set out in the section headed ‘‘Relevant experience of the Group’s management team in trading of the New Products and the ARS Business’’ below. By engaging in trading of the New Products with higher gross profit margins, the Group will be able to offer a wider range of products in the EMS and Distribution Products Businesses with a view to providing a growth engine to its existing core businesses and improving its profitability in the short to medium term, as explained in the section headed ‘‘Reasons for and benefits of the Rights Issue’’ above;

(ii) approximately HK$18.1 million for the funding of potential merger and acquisition opportunities of ARS-licensed providers (i.e. assisted reproductive medical facilities such as hospitals and IVF centers) located in regions in the PRC such as East China, the Beijing-Tianjin-Hebei region and other highly potential regions, opening of new assisted reproductive medical centers in these regions, and/or operation of these medical centers (collectively, the ‘‘ARS Business’’). The ARS Business includes provision of pregnancy and pregnancy-assistance services which typically adopt two types of technology: artificial insemination and IVF, and involve medical examination, consultation and sales of pharmaceutical and health care products.

The Directors consider that there would be synergy between the ARS Business and sales of the New Products. By participating in the ARS Business, the Company could target and acquire a number of middle to high end customers who have demand on assisted reproductive and other related services. After carrying out the ARS Business, the Company could introduce these customers to hospitals and IVF centers for followon treatments and services which could be satisfied by the use of the New Products. Having a customer base from the ARS Business would be an advantage for the sales of the New Products to hospitals and IVF centers.

The Company plans to tap into the ARS Business given (a) its growth potential as stated in the section headed ‘‘Reasons for and benefits of the Rights Issue’’ above; (b) the synergy between the ARS business and sales of the New Products; and (c) the relevant experience of the Group’s management team as stated in the section headed ‘‘Relevant experience of the Group’s management team in trading of the New Products and the ARS Business’’ below.

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As disclosed in the announcement of the Company dated 20 May 2021, a wholly-owned subsidiary of the Company entered into a non-legally binding term sheet (the ‘‘Term Sheet’’) with a potential vendor and a target company in relation to a possible acquisition (the ‘‘Possible Acquisition’’) of a controlling stake in I.Baby Technology Holdings Limited (the ‘‘Target Company’’). Pursuant to the Term Sheet, the consideration for the Possible Acquisition will be no more than RMB39.2 million, subject to further negotiation among the parties, which will be financed by a combination of cash and/or issuance of new Shares and/or convertible bonds of the Company. The Target Company and its subsidiaries (collectively, the ‘‘Target Group’’) are principally engaged in provision of pregnancy and pregnancy-assistance services and other ARS, including provision of one-stop IVF services, telemedicine consultation services and sales of drugs and pharmaceutical products and health care products. Currently, the Target Group operates two medical centers in Shanghai and Hangzhou, the PRC.

As at the date of this announcement, the negotiation on the Possible Acquisition was close to finalisation. However, no definitive sale and purchase agreement has been signed by the parties in relation to the Possible Acquisition as at the date of this announcement. If the Possible Acquisition proceeds, it is expected that a majority of the net proceeds from the Rights Issue (i.e. approximately HK$18.1 million) for the funding of the ARS Business will be used to finance part of the consideration for the Possible Acquisition. Subject to the actual business development of the Target Group, the Group also intends to provide additional working capital of RMB6.0 million to the Target Group. As at the date of this announcement, other than the Target Group, the Company has not identified any other target companies for potential acquisition.

Notwithstanding the growth potential of the ARS Business, the Directors expect that the EMS and Distribution Products Businesses will remain as the principal business segment of the Group and will continue to contribute at least 50% of the Group’s total revenue;

(iii) approximately HK$7.9 million for general corporate and working capital purposes.

In the event that there is an under-subscription of the Rights Issue, the net proceeds of the Rights Issue will be utilised in proportion to the above uses.

RELEVANT EXPERIENCE OF THE GROUP’S MANAGEMENT TEAM IN TRADING OF THE NEW PRODUCTS AND THE ARS BUSINESS

In June 2021, the Group formed a joint venture company (the ‘‘JV Company’’) for the purpose of engaging in the business of endometrial stem cell storage and fertility health management with Hanguang Technology (Shanghai) Gene Technology Co., Ltd (漢光雲科(上海)生物醫藥科技有限公司) (‘‘Hanguang Technology’’). The JV Company, a non wholly-owned subsidiary of the Company, is owned as to 51% by the Group and as to 49% by Hanguang Technology which is in turn owned as to 79% and 21% by Mr. Wang Yuhong and Zhongkang Regenerative Medicine Technology (Hainan) Co., Ltd (中康再生醫學科技(海南)有限公司) (‘‘Zhongkang Regenerative’’). Zhongkang Regenerative is a company established in PRC with limited liability which is owned as to 40% and 60% by Dr. Sun Xiaohu (‘‘Dr. Sun’’) and Mr. Wang Xuejun (‘‘Mr. Wang’’), respectively.

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To the best of knowledge, information and belief of the Directors having made all reasonable inquiries, Mr. Wang Yuhong and Mr. Wang are third parties independent of the Company and its connected persons before establishing the JV Company. Dr. Sun was an independent non-executive director of the Company during the period from 6 January 2021 to 19 April 2021.

Mr. Wang and Dr. Sun have been appointed as the chairman and the general manager of the JV Company, respectively.

Set out below is the biographical details of Mr. Wang and Dr. Sun:

Mr. Wang holds a master’s degree in business administration from Nankai University. Mr. Wang has extensive experience in the stem cell industry. Mr. Wang served as an executive director and chief executive officer of China Regenerative Medicine International Limited (‘‘CRMI’’), whose shares are listed on the GEM of the Stock Exchange (stock code: 8158), during the period from September 2018 to July 2020. CRMI and its subsidiaries are principally engaged in (i) production and sale of (a) dermatology, cosmetic products and others; (b) cell and healthcare products and services; (c) ophthalmology products; and (d) stomatology products and others; and (ii) trading of medical equipment. Besides, Mr. Wang was an executive deputy general manager of Vcanbio Cell & Gene Engineering Corp., Ltd., whose shares are listed on Shanghai Stock Exchange (stock code: 600645). He was also the general manager of Heze Biotechnology Co., Ltd.

Dr. Sun holds a doctoral degree of medicine (immunology) from Shanghai Jiao Tong University School of Medicine and a certificate of EMBA (核心課程總裁高級研修班) issued by Center for National Strategic Studies, Shanghai Jiao Tong University (上海交通大學國家戰略研究中心). Dr. Sun has more than 30 years’ experience in biotechnology companies, pharmaceutical companies, medical enterprises, research institutes and hospitals; and nearly 20 years’ experience as senior management in domestic and international pharmaceutical and medical device companies. For details of Dr. Sun’s biographies, please refer to the announcement of the Company dated 6 January 2021.

In light of the managerial experience and expertise of Mr. Wang and Dr. Sun in (i) production and/or sales of medical equipment/ device; and (ii) biotechnology including assisted reproduction, the Directors consider that the management team of the Group has relevant experience and expertise in procuring and selling the New Products including middle to high end medical electronic products as well as operating and managing the ARS Business.

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CHANGE IN THE SHAREHOLDING STRUCTURE OF THE COMPANY ARISING FROM THE RIGHTS ISSUE

For illustration purposes only, set out below is the shareholding structure of the Company as at the date of the announcement, and the effect on the shareholding structure of the Company upon completion of the Rights Issue in the manner contemplated under the Underwriting Agreement, is as follow:

(i) Assuming there is no new Share being issued and no Share being repurchased by the Company on or before the Record Date:

Name of the substantial shareholders Power Port Holdings Limited (Note 1) Keywan Global Limited (Note 2) Mr. Cao Longbing (Note 3) Hearts Capital SPC-Hearts SP2 (Note 3) The Underwriter and/or its subscriber(s) procured by it (Note 4) Other Shareholders (Note 5) Total	As at the date of this announcement Number of issued Shares Approximate % 75,817,000 12.30% 49,500,000 8.03% 428,000 0.07% 35,930,000 5.83% — — 454,567,570 73.77% 616,242,570 100.00%	Immediately after completion of the Rights Issue (assuming all Shareholders have taken up all the entitled Rights Shares) Number of issued Shares Approximate % 113,725,500 12.30% 74,250,000 8.03% 642,000 0.07% 53,895,000 5.83% — — 681,851,355 73.77% 924,363,855 100.00%	Immediately after completion of the Rights Issue (assuming none of the Qualifying Shareholders have taken up any entitled Rights Shares) Number of issued Shares Approximate % 75,817,000 8.20% 49,500,000 5.35% 428,000 0.05% 35,930,000 3.89% 308,121,285 33.33% 454,567,570 49.18% 924,363,855 100.00%	Immediately after completion of the Rights Issue (assuming none of the Qualifying Shareholders have taken up any entitled Rights Shares) Number of issued Shares Approximate % 75,817,000 8.20% 49,500,000 5.35% 428,000 0.05% 35,930,000 3.89% 308,121,285 33.33% 454,567,570 49.18% 924,363,855 100.00%
				100.00%

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(ii) Assuming no new Shares being issued other than those falling to be issued upon full exercise of the Share Options and no Shares being repurchased by the Company before the Record Date:

Name of the substantial shareholders Power Port Holdings Limited (Note 1) Keywan Global Limited (Note 2) Mr. Cao Longbing (Note 3) Hearts Capital SPC-Hearts SP2 (Note 3) The Underwriter and/or its subscriber(s) procured by it (Note 4) Other Shareholders (Note 5) Total	As at the date of this announcement Number of issued Shares Approximate % 75,817,000 12.30% 49,500,000 8.03% 428,000 0.07% 35,930,000 5.83% — — 454,567,570 73.77% 616,242,570 100.00%	Immediately after completion of the Rights Issue (assuming all Shareholders have taken up all the entitled Rights Shares) Number of issued Shares Approximate % 113,725,500 11.64% 74,250,000 7.60% 642,000 0.07% 53,895,000 5.51% — — 734,807,130 75.18% 977,319,630 100.00%	Immediately after completion of the Rights Issue (assuming none of the Qualifying Shareholders have taken up any entitled Rights Shares) Number of issued Shares Approximate % 75,817,000 7.76% 49,500,000 5.07% 428,000 0.04% 35,930,000 3.68% 325,773,210 33.33% 489,871,420 50.12% 977,319,630 100.00%	Immediately after completion of the Rights Issue (assuming none of the Qualifying Shareholders have taken up any entitled Rights Shares) Number of issued Shares Approximate % 75,817,000 7.76% 49,500,000 5.07% 428,000 0.04% 35,930,000 3.68% 325,773,210 33.33% 489,871,420 50.12% 977,319,630 100.00%
				100.00%

Notes:

Power Port Holdings Limited, which is a company incorporated in the British Virgin Islands, is wholly-owned by Ms. Yang Changrong.
Keywan Global Limited, which is a company incorporated in the British Virgin Islands, is whollyowned by Mr. He Xiaoming.
Hearts Capital SPC-Hearts SP2, which is a company incorporated in the Cayman Islands, is whollyowned by Hearts Capital (Asia) Limited, which in turn is 70% controlled by Mr. Cao Longbing. Mr. Cao Longbing is also interested in 428,000 Shares. Long Asia Asset Management (HK) Limited is the investment manager of Hearts Capital SPC-Hearts SP2 and is therefore deemed to be interested in the shares owned by Hearts Capital SPC-Hearts SP2 under the SFO.
Pursuant to the Underwriting Agreement, the Underwriter shall confirm with the Company the actual number of Untaken Shares as at the Latest Time for Acceptance, and shall procure for subscription therefor on a best effort basis whilst using its best endeavours to ensure that (i) each of the subscribers of the Untaken Shares procured by the Underwriter (or the Underwriter concerned, whichever shall be appropriate) shall be an Independent Third Party and not connected with the Company, any of the Directors or chief executive or substantial Shareholders or their respective associates; (ii) the Public Float Requirement be fulfilled by the Company upon completion of the Rights Issue; and (iii) the Underwriter or each subscriber procured by the Underwriter (together with parties acting in concert with the respective subscribers or any of the connected persons or associates of the respective subscribers) shall not hold in aggregate 30% or more of the voting rights of the Company immediately after the Rights Issue.
Other Shareholders also includes the option holders who are Directors and employees of the Group.

– 26 –

FUND RAISING ACTIVITIES INVOLVING ISSUE OF SECURITIES IN THE PAST 12 MONTHS

The Company has conducted the following equity fund raising activities in the past twelve months immediately before the date of this announcement:

				Actual use of proceeds
Date of			Intended	as at the date of
announcement	Event	Net proceeds	use of proceeds	this announcement
30 December 2020	Placing of new Shares	HK$29.2 million	General working capital	Approximately HK$29.2
and 11 January	under refreshed		of the Group	million was used for
2021	general mandate			general working capital
				of the Group
15 June and	Placing of new Shares	Approximately	Approximately HK$10	Approximately HK$22.2
30 June 2021	under general	HK$22.2	million for developing	million is unutilised.
	mandate	million	the Group’s assisted
			reproduction medical
			technology business,
			and remaining balance
			of approximately
			HK$12.2 million for
			general working capital
			of the Group.

Save as disclosed in the above, the Company had not conducted any fund-raising activities involving issue of its securities in the past twelve months immediately preceding the date of this announcement.

ADJUSTMENTS IN RELATION TO OTHER SECURITIES OF THE COMPANY

As at the date of this announcement, there are outstanding options granted under the Share Option Scheme to subscribe for 35,303,850 Shares. The Rights Issue may lead to adjustments to the exercise price and/or the number of Shares to be issued upon exercise of the Share Options under the share option scheme of the Company. The Company will make further announcement(s) about the adjustments as and when appropriate.

LISTING RULES IMPLICATIONS

As the Company has not conducted any rights issue or open offer within the 12-months period prior to the date of this announcement and the Rights Issue will not increase the issued share capital or the market capitalisation of the Company by more than 50% within the 12-months period immediately preceding the date of this announcement and the Rights Issue is not underwritten by a Director, chief executive or substantial shareholder of the Company (or any of their respective close associates), the Rights Issue is not subject to Shareholders’ approval under the Listing Rules.

– 27 –

GENERAL

WARNING OF THE RISKS OF DEALING IN SHARES AND THE NIL PAID RIGHTS

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

DEFINITIONS

In this announcement, the following expressions shall have the following meanings unless the context otherwise requires:

‘‘acting in concert’’ has the meaning ascribed thereto under the Takeovers Code ‘‘associates’’ has the meaning ascribed thereto under the Listing Rules ‘‘Board’’ the board of Directors

– 28 –

‘‘Business Day(s)’’
a day (excluding Saturday, Sunday and any day on which a tropical cyclone warning signal no. 8 or above is hoisted or remains hoisted between 9:00 a.m. and 12:00 noon and is not lowered at or before 12:00 noon or on which a ‘‘black’’ rainstorm warning is hoisted or remains in effect between 9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon) on which licensed banks in Hong Kong are open for general business
‘‘CCASS’’
the Central Clearing and Settlement System established and operated by HKSCC
‘‘Companies Act’’
the Companies Act (Revised) of the Cayman Islands
‘‘Company’’
Link-Asia International MedTech Group 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: 1143)
‘‘connected person(s)’’
has the meaning ascribed thereto under the Listing Rules
‘‘Director(s)’’
director(s) of the Company
‘‘EAF(s)’’
the form(s) of application for use by the Qualifying Shareholders who wish to apply for Excess Rights Shares, being in such form as may be agreed between the Company and the Underwriter
‘‘Excess Rights Shares’’
any nil-paid Rights Share(s) provisionally allotted but not accepted by any of the Qualifying Shareholders or otherwise subscribed for by transferees of nil-paid Rights Shares prior to the Latest Time for Acceptance, any entitlements of the Excluded Shareholders provisionally allotted to a nominee of the Company which are left unsold, and shall include any of the Rights Shares created from the aggregation of fractions of the Rights Shares and the Scale-down PAL Shares (if any) and the Scale-down EAF Shares (if any)
‘‘Excluded Shareholder(s)’’
those Overseas Shareholder(s) whom the Directors, based on legal opinions provided by the Company’s legal advisers, consider it necessary or expedient not to offer the Rights Shares to such Shareholders on account either of restrictions under the laws of the relevant place or the requirements of a relevant regulatory body or stock exchange in that place
‘‘Group’’ the Company and its subsidiaries
‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong
‘‘HKSCC’’
Hong Kong Securities Clearing Company Limited

– 29 –

‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China

‘‘Independent Third Party(ies)’’
third party(ies) independent of and not connected (as defined under the Listing Rules) with the Company and connected person(s) of the Company
‘‘Last Trading Day’’
15 October 2021, being the last trading day of the Shares on the Stock Exchange before the release of this announcement
‘‘Latest Time for Acceptance’’
4:00 p.m. on Monday, 15 November 2021 or such later time or date as may be agreed between the Underwriter and the Company, being the latest time for acceptance of, and payment for, the Rights Shares as described in the Prospectus Documents
‘‘Latest Time for Termination’’
4:00 p.m. on the following Business Day after the Latest Time for Acceptance or such later time or date as may be agreed between the Underwriter and the Company, being the latest time to terminate the Underwriting Agreement
‘‘Listing Rules’’
the Rules Governing the Listing of Securities on the Stock Exchange
‘‘MGO Obligation’’
the obligation to make a mandatory general offer under the Takeovers Code
‘‘Overseas Shareholder(s)’’ Shareholder(s) whose name(s) appear on the register of members of the Company on the Record Date and whose address(es) as shown on such register is/are in a place(s) outside Hong Kong
‘‘PAL(s)’’
the provisional allotment letter(s) to be used in connection with the Rights Issue in such form as the Company may approve
‘‘Prospectus’’
the prospectus to be despatched to the Shareholders containing details of the Rights Issue
‘‘Prospectus Documents’’ the Prospectus and the PAL
‘‘Prospectus Posting Date’’
Monday, 1 November 2021 or such other date as the Company may determine in writing for the despatch of the Prospectus Documents
‘‘Public Float Requirement’’ the public float requirement under Rule 8.08 of the Listing Rules

– 30 –

‘‘Qualifying Shareholders’’
Shareholder(s), other than the Excluded Shareholder(s), whose name(s) appear on the register of members of the Company as at the close of business on the Record Date
‘‘Record Date’’
the date by reference to which entitlements under the Rights Issue are expected to be determined, which is currently scheduled to be on Friday, 29 October 2021 or such later date as announced by the Company
‘‘Registrar’’
the branch share registrar and transfer office of the Company in Hong Kong, being Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong
‘‘Rights Issue’’
the proposed issue by way of rights on the basis of one (1) Rights Share for every two (2) existing Shares held by the Qualifying Shareholders on the Record Date at the Subscription Price on the terms and subject to the conditions set out in the Underwriting Agreement and the Prospectus Documents
‘‘Rights Share(s)’’
the new Share(s) proposed to be allotted and issued by the Company pursuant to the Rights Issue
‘‘Scale-down EAF Shares’’
such number of Rights Shares applied for under the EAF(s) which would, if allotted by the Company, result in either the incurring of an MGO Obligation on the part of the applicant or the failure to comply with the Public Float Requirement on the part of the Company
‘‘Scale-down PAL Shares’’ such number of Rights Shares applied for under the PAL(s) which would, if allotted by the Company, result in either the incurring of an MGO Obligation on the part of the applicant or the failure to comply with the Public Float Requirement on the part of the Company
‘‘Scaling-down’’
the scale-down mechanisms of the Rights Issue as determined by the Company to which any application for the Rights Shares, whether under the PALs or EAFs, or transferees of nil-paid Rights Shares shall be subject to ensure that no application for the Rights Shares or the allotment thereof by the Company shall be at such level which may trigger any MGO Obligation or non-compliance with the Public Float Requirement
‘‘SFC’’
the Securities and Futures Commission of Hong Kong
‘‘SFO’’
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

– 31 –

‘‘Share(s)’’
ordinary share(s) in issue and unissued share capital of the Company
‘‘Shareholder(s)’’

the holder(s) of the issued Shares

‘‘Share Option(s)’’
35,303,850 outstanding options to subscribe for 35,303,850 existing Shares granted under the Share Option Scheme
‘‘Share Option Scheme’’
the share option scheme adopted by the Company on 10 March 2020
‘‘Specified Event’’
an event occurring or matter arising on or after the date of execution of the Underwriting Agreement and prior to the Latest Time for Termination which, if it had occurred or arisen before the date of execution of the Underwriting Agreement, would have rendered any of the warranties contained in the Underwriting Agreement untrue or incorrect in any material respect
‘‘Stock Exchange’’

The Stock Exchange of Hong Kong Limited

‘‘Subscription Price’’ HK$0.20 per Rights Share
‘‘substantial shareholder’’
has the meaning ascribed to it under the Listing Rules
‘‘Takeovers Code’’
The Code on Takeovers and Mergers of Hong Kong
‘‘Underwriter’’
KOALA Securities Limited, a corporation licensed to carry on Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities under the SFO whose ordinary course of business includes underwriting of securities
‘‘Underwriting Agreement’’ the underwriting agreement dated 15 October 2021 entered into between the Company and the Underwriter in relation to the underwriting arrangement in respect of the Rights Issue
‘‘Underwritten Share(s)’’
all the Rights Shares to be underwritten by the Underwriter pursuant to the terms of the Underwriting Agreement

– 32 –

‘‘Untaken Shares’’

all those Underwritten Shares not taken up by the Qualifying Shareholders on or before the Latest Time for Acceptance

‘‘U.S.’’

the United States of America

‘‘%’’

per cent.

By order of the Board Link-Asia International MedTech Group Limited Lin Dailian Chairman and executive Director

Hong Kong, 15 October 2021

As at the date of this announcement, the Board comprises Mr. Lin Dailian (Chairman), Mr. Wang Guozhen, Mr. Duan Chuanhong and Mr. Xia Xiaobing as executive Directors; Mr. Li Huiwu, Mr. Yang Weidong and Mr. Chak Chi Shing as independent non-executive Directors.

– 33 –

AI assistant

China Energy Storage Technology Development Limited — Capital/Financing Update 2021

49722_rns_2021-10-15_0ff98339-afe1-495d-bbb3-602d19fce63c.pdf

Link-Asia International MedTech Group Limited 環亞國際醫療科技集團有限公司

PROPOSED RIGHTS ISSUE ON THE BASIS OF ONE (1) RIGHTS SHARE FOR EVERY TWO (2) EXISTING SHARES HELD ON RECORD DATE

Underwriter to the Rights Issue

PROPOSED RIGHTS ISSUE

THE UNDERWRITING AGREEMENT

LISTING RULES IMPLICATIONS

GENERAL

WARNING OF THE RISKS OF DEALING IN SHARES AND THE NIL-PAID RIGHTS SHARES

PROPOSED RIGHTS ISSUE

Issue statistics

Subscription Price

Qualifying Shareholders

Rights of Overseas Shareholders

Closure of register of members

Basis of provisional allotments

Fractional entitlements of the Rights Shares

Status of the Rights Shares

Share certificates and refund cheques for the Rights Issue

Application for Excess Rights Shares

Scale-down of subscriptions to avoid the triggering of the MGO Obligation and noncompliance of the Public Float Requirement

Arrangement on odd lots trading

Application for listing of the Rights Shares

Condition of the Rights Issue

THE UNDERWRITING AGREEMENT

The Underwriting Agreement

Principal terms of the Underwriting Agreement

Conditions of the Underwriting Agreement

Termination of the Underwriting Agreement

EXPECTED TIMETABLE

EFFECT OF BAD WEATHER ON THE LATEST TIME FOR ACCEPTANCE OF AND PAYMENT FOR THE RIGHTS SHARES

REASONS FOR AND BENEFITS OF THE RIGHTS ISSUE

Circumstances leading to the Rights Issue

The current financial resources are insufficient to fund the Group’s expansion of its existing core businesses and development of new business with growth potential

Alternative means of fund raising

INTENDED USE OF PROCEEDS

RELEVANT EXPERIENCE OF THE GROUP’S MANAGEMENT TEAM IN TRADING OF THE NEW PRODUCTS AND THE ARS BUSINESS

CHANGE IN THE SHAREHOLDING STRUCTURE OF THE COMPANY ARISING FROM THE RIGHTS ISSUE

FUND RAISING ACTIVITIES INVOLVING ISSUE OF SECURITIES IN THE PAST 12 MONTHS

ADJUSTMENTS IN RELATION TO OTHER SECURITIES OF THE COMPANY

LISTING RULES IMPLICATIONS

GENERAL

WARNING OF THE RISKS OF DEALING IN SHARES AND THE NIL PAID RIGHTS

DEFINITIONS

By order of the Board Link-Asia International MedTech Group Limited Lin Dailian Chairman and executive Director

Hong Kong, 15 October 2021

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China Energy Storage Technology Development Limited Capital/Financing Update 2021