Cornerstone Technologies Holdings Limited — Capital/Financing Update 2020

Jul 31, 2020

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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ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED 精雅商業財經印刷集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8391)

CHANGE IN USE OF PROCEEDS FROM THE LISTING

References are made to the prospectus (the “ Prospectus ”) issued by Elegance Commercial and Financial Printing Group Limited (the “ Company ”, together with its subsidiaries, the “ Group ”) dated 30 April 2018 in relation to the public offering and placing of the shares of the Company (the “ Share Offer ”) for the listing on GEM (the “ Listing ”) of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) and the annual report of the Company for the year ended 31 March 2020 dated 22 June 2020 (the “ Annual Report ”) in relation to the use of the Net Proceeds (as defined below) from the Share Offer. Unless otherwise defined, capitalised terms used in this announcement shall have the same meanings as defined in the Prospectus and the Annual Report.

PLANNED USE OF PROCEEDS

According to the Annual Report, the actual amount of the net proceeds from the Share Offer after deducting underwriting commission and other relevant expenses was approximately HK$41.0 million (the “ Net Proceeds ”). As disclosed in the Prospectus, the Net Proceeds would be applied to (i) continue organic growth by solidifying existing customer relation and developing new relationship; (ii) acquire a permanent office space for the Group’s business expansion in financial printing services; and (iii) upgrade and acquire new equipment, hardware and software for financial printing services. As at 31 March 2020, according to the audited financial statements of the Group, the Group had used approximately HK$2.3 million, representing approximately 5.6% of the Net Proceeds, and the remaining balance of the Net Proceeds was approximately HK$38.7 million.

CHANGE OF USE OF PROCEEDS

Having carefully considered the current challenging business environment of the commercial printing and financial printing services and future development needs of the Group, the board (the “ Board ”) of directors (the “ Directors ”) of the Company has reviewed the utilisation of the Net Proceeds and resolved to reallocate part of the Net Proceeds.

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The Board has resolved and approved on 31 July 2020 to adjust the proposed uses and allocation of the Net Proceeds. Set out below are details of the intended use of Net Proceeds, the original allocation of Net Proceeds, the amount of Net Proceeds utilised before the revised allocation as at the date of this announcement, the revised allocation of Net Proceeds and the amount of unutilised Net Proceeds after the revised allocation as at the date of this announcement:

Intended uses of the Net Proceeds Continue organic growth by solidifying existing customer relationship and developing new relationship Acquire a permanent office space Upgrade and acquire new equipment, hardware and software Explore new sustainable business opportunities Working capital and general corporate purposes Total:	Original allocation Amount of Net Proceeds utilised before the revised allocation as the date of this announcement HK$’000 HK$’000 1,500 1,500 37,000 — 2,500 1,018 — — — — 41,000 2,518	Adjustment in the use of Net Proceeds Amount of unutilised Net Proceeds after the revised allocation as at the date of this announcement Expected time of full utilisation of remaining balance HK$’000 HK$’000 1,680 1,680 End of 2022 (37,000) — — — 1,482 End of 2022 20,000 20,000 End of 2021 15,320 15,320 End of 2022 — 38,482

REASONS FOR THE CHANGE IN USE OF PROCEEDS

Due to the outbreak of the novel coronavirus (COVID-19) pandemic since early 2020 and the unsettled Sino-U.S. trade war which has caused uncertainty on the global economic outlook, the Board believes that the current economy will have an adverse impact on the number of new listing application, which may lead to a weak demand for commercial printing and financial printing services. Moreover, as proposed in the consultation paper published by the Stock Exchange on 24 July 2020 together with the Guidance Letter HKEX-GL86-16 updated on 24 July 2020, a paperless listing and subscription regime and producing simplified listing documents will be introduced, the Board believes that it will shrink the scope of services provided by the Group. As the provision of printing services is one of the major sources of income for the Group, the simplification of the listing documents may lead to the decrease in demand on typesetting and translation services for listing documents. The Board expects that the importance and/or the potential growth of revenue for the Group from preparing listing documents will decline and the negative impact of coronavirus epidemic will last for the next 12 to 24 months at least. As a results, the Board has resolved to change the original use of the Net Proceeds and re-allocate approximately HK$37.0 million out of the Net Proceeds originally earmarked for the Group’s acquisition of a permanent office space,

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as to HK$1.7 million of it to finance the Group’s continue organic growth by solidifying existing customer relationship and developing new relationship, HK$20.0 million of it to finance the Group’s exploring new sustainable business opportunities, and the remaining HK$15.3 million of it as working capital and general corporate purposes for the Group. For the latest information of exploring new sustainable business opportunities, please refer to the circular of the Company dated 30 June 2020.

THE BOARD’S VIEWS

The Board considers that the change in the use of the Net Proceeds is fair and reasonable, which allows the Group to meet its financial needs and more efficiently and flexibly. The Board is of the view that the change in use of the Net Proceeds is in line with the business strategy of the Group and will not materially adversely affect the operation and business of the Group and is in the best interest of the Company and the Shareholders as a whole.

The Directors will continuously assess the plans for the use of the Net Proceeds as set out in the Prospectus, the Annual Report and the above, and may revise or amend such plans where necessary, to cope with the changing market conditions and strive for better business performance for the Group. The Board confirms that, save as disclosed in this announcement, there are no other changes to the use of Net Proceeds.

By Order of the Board Elegance Commercial and Financial Printing Group Limited LIANG Zihao Executive Director

Hong Kong, 31 July 2020

As at the date of this announcement, the executive Directors are Mr. LIANG Zihao and Mr. SAM WENG WA Michael, the non-executive Director is Mr. WU Jianwei and the independent nonexecutive Directors are Mr. TAM Ka Hei Raymond, Mr. YUEN Chun Fai and Ms. ZHU Xiaohui.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the “Latest Listed Company Information” page of the GEM website at www.hkgem.com for at least seven days after the date of publication and on the Company’s website at www.elegance.hk.

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