Cornerstone Technologies Holdings Limited — Capital/Financing Update 2021

Sep 30, 2021

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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CORNERSTONE TECHNOLOGIES HOLDINGS LIMITED 基石科技控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8391)

PLACING OF NEW SHARES IN TRANCHES UNDER SPECIFIC MANDATE

Financial Adviser to the Company

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Placing Agent

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PLACING OF NEW SHARES UNDER SPECIFIC MANDATE

• The Board is pleased to announce that on 30 September 2021 (after trading hours), the Company and the Placing Agent entered into the Placing Agreement, pursuant to which the Placing Agent has agreed, as agent of the Company, on a best effort basis, to procure not less than six (6) Placees who and whose ultimate beneficial owners shall be Independent Third Parties to subscribe for up to 72,000,000 Placing Shares at the Placing Price of HK$0.7 per Placing Share in up to two or more tranches within the Placing Period subject to the terms and conditions set out in this Agreement.

• The Placing Shares to be placed under the Placing Agreement will be issued and allotted pursuant to the Specific Mandate relating to Placing to be granted to the Directors by the Shareholders at the EGM.

• Placing Completion is subject to the fulfilment of the conditions referred to in the paragraph headed “ Conditions of the Placing ” of this announcement.

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• The 72,000,000 Placing Shares to be issued and allotted under the Placing Agreement represent:

• (i) approximately 12.00% of the existing issued share capital of the Company as at the date of this announcement; and

• (ii) approximately 10.72% of the issued share capital of the Company immediately upon completion of Placing (assuming there is no change in the issued share capital of the Company from the date of this announcement and up to the date of completion of all the Placing Shares) as enlarged by the allotment and issue of all the Placing Shares.

• The aggregate nominal value of the Placing Shares will be HK$50,400,000.

• The Placing Price of HK$0.7 per Placing Share which represents (i) a discount of approximately 30.69% to the closing price of HK$1.01 per Share as quoted on the Stock Exchange on 30 September 2021, being the last full trading day immediately before the execution of the Placing Agreement; and (ii) a discount of approximately 29.86% to the average closing price of approximately HK$0.998 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Placing Agreement.

• Assuming all the Placing Shares are fully placed, the gross proceeds from the Placing are expected to be approximately HK$50.4 million. The estimated net proceeds from the Placing after deduction of expenses, will amount to approximately HK$47.8 million. The Company intends to apply the net proceeds from the Placing for EV charging business development, commercial and financial printing business operation, working capital and general corporate purposes.

• Application will be made by the Company to the Listing Committee of the Hong Kong Stock Exchange for the listing of, and the permission to deal in, the Placing Shares.

LISTING RULES IMPLICATIONS

As the Placing Shares will be issued and allotted under the Specific Mandate to be obtained at the EGM, the Placing is subject to the Shareholders’ approval. A circular containing, among other things, (i) further details of the Placing; and (ii) a notice convening the EGM, will be despatched to the Shareholders as soon as practicable in accordance with the GEM Listing Rules.

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EGM

The EGM will be convened to consider and, if thought fit, approve (i) the Placing Agreement and (ii) the grant of the Specific Mandate for the issue and allotment of the Placing Shares and the transactions contemplated thereunder. To the best of the knowledge, information and belief of the Directors, none of the Shareholders has a material interest in the transactions contemplated under the Placing Agreement as at the date of this announcement. Accordingly, none of the Shareholder will be required to abstain from voting at the EGM in respect of the relevant resolution(s) relating to the Placing and the Specific Mandate.

GENERAL

Placing Completion is subject to the fulfillment of the conditions precedent set out in the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

PLACING OF NEW SHARES IN TRANCHES UNDER SPECIFIC MANDATE

The Board is pleased to announce that on 30 September 2021 (after trading hours), the Company and the Placing Agent entered into the Placing Agreement, pursuant to which the Placing Agent has agreed, as agent of the Company, on a best effort basis, to procure not less than six (6) Placees who and whose ultimate beneficial owners shall be Independent Third Parties to subscribe for up to 72,000,000 Placing Shares at the Placing Price of HK$0.7 per Placing Share in up to two or more tranches within the Placing Period subject to the terms and conditions set out in this Agreement.

Principal terms of the Placing Agreement are set below:

THE PLACING AGREEMENT

Date: 30 September 2021 (after trading hours)

Parties: (i) the Company (as issuer); and

• (ii) VBG Capital (as placing agent).

Independence of Placing Agents and Placees

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, as at the date of this announcement, the Placing Agent and the placees to be procured by the Placing Agent and their ultimate beneficial owner(s) are Independent Third Parties, which are independent of the directors, chief executive or substantial shareholders of the Company or any of their respective associates as at the date of this announcement.

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Placing Commission

Pursuant to the terms of the Placing Agreement, the Placing Agent will receive a placing commission of 5.0% of the amount of gross proceeds in each tranche of the Placing Shares actually placed by the Placing Agent. The Placing Agent is authorised to deduct from the payment to be made by it to the Company under the Placing Agreement. The placing commission in respect of the Placing was negotiated on arm’s length basis between the Company and the Placing Agent and was determined with reference to the prevailing market rates charged by other placing agents.

Placees

The Placing Shares will be placed to not less than six (6) Placees who shall be any person or entity, who is professional, institutional or other investors, who and whose ultimate beneficial owners are Independent Third Parties in up to two or more tranches.

Upon Placing Completion, it is expected that none of the Placees will become a substantial Shareholder. If any of the Placees will become a substantial Shareholder after Placing Completion, further announcement will be made by the Company.

The Placing Agreement provides that should any director, chief executive or substantial shareholder of the Company or any of its subsidiaries or any of their respective associates (the “ Interested Parties ”) in taking up any or all of the Placing Shares to the Placing Agent, the Interested Parties shall not be entitled to vote on the resolution(s) of the Company approving the Placing Agreement and the grant of the Specific Mandate for the issue and allotment of the Placing Shares at the EGM and that the Placing Agent and the Company shall ensure that this shall be so and that the issue and allotment of such Placing Shares shall not trigger general offer obligation as defined under the Takeovers Code. If, there shall be any Placing Shares taken up by Placee(s) who are connected person(s) of the Company as set out above, the Company will make further announcement(s) as and when appropriate in compliance with the GEM Listing Rules.

Placing Shares

The 72,000,000 Placing Shares to be issued and allotted under the Placing Agreement represent:

• (i) approximately 12.00% of the existing issued share capital of the Company as at the date of this announcement; and

• (ii) approximately 10.72% of the issued share capital of the Company immediately upon completion of Placing (assuming there is no change in the issued share capital of the Company from the date of this announcement and up to the date of completion of all the Placing Shares) as enlarged by the allotment and issue of all the Placing Shares.

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The Placing Shares to be placed under the Placing Agreement will be issued and allotted pursuant to the Specific Mandate relating to Placing to be granted to the Directors by the Shareholders at the EGM. The aggregate value of the Placing Shares will be HK$50,400,000.

Placing Price

The Placing Price of HK$0.7 per Placing Share which represents (i) a discount of approximately 30.69% to the closing price of HK$1.01 per Share as quoted on the Stock Exchange on 30 September 2021, being the last full trading day immediately before the execution of the Placing Agreement; and (ii) a discount of approximately 29.86% to the average closing price of approximately HK$0.998 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Placing Agreement.

The Placing Price was arrived at after arm’s length negotiations between the Company and the Placing Agent with reference to the prevailing market price and the recent trading performance of the Shares.

Ranking of the Placing Shares

The Placing Shares, when issued and allotted, will rank pari passu in all respects among themselves and with the Shares in issue on the date of issue and allotment of the Placing Shares.

Conditions of the Placing

Placing Completion shall be conditional upon:

• (i) the Listing Committee of the Stock Exchange having granted the listing of, and permission to deal in, the Placing Shares and such approval has not been revoked prior to Placing Completion;

• (ii) the passing of the resolution(s) at the EGM by the Shareholders to approve the Placing Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate relating to Placing to issue and allot the Placing Shares;

• (iii) the Shares remaining listed on GEM of the Stock Exchange, and that the listing status of the Shares not being subject to or threatened with any revocation, suspension, withdrawal or cancellation at any time prior to the Long Stop Date; and

• (iv) each of the Company and the Placing Agent having obtained all necessary consents and approvals in respect of the Placing Agreement and the transactions contemplated thereunder.

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None of the conditions precedent set out in (i) to (iv) above can be waived by the parties to the Placing Agreement. If, any of the conditions precedent above is not fulfilled at or before 4:00 p.m. (Hong Kong time) on or before the Long Stop Date, the Placing under the Placing Agreement will terminate automatically and all rights, obligations and liabilities of the parties to the Placing Agreement shall cease and terminate and none of the parties to the Placing Agreement shall have any claim against any other in respect of the Placing, save for any antecedent breaches thereof.

Completion

Upon fulfilment of all the conditions precedent set out in (i) to (iv) above, Placing Completion shall take place, in respect of the relevant tranche of the Placing Shares, by no later than 4:00 p.m. on each Placing Completion Date or such later time and date as the Placing Agent and the Company may agree in writing but in any event not later than the Long Stop Date.

APPLICATION FOR LISTING

An application will be made by the Company to the Stock Exchange for the listing of, and the permission to deal in, the Placing Shares.

REASONS FOR THE PLACING

The Company is an investment holding company and its subsidiaries are principally engaged in the provision of printing, typesetting and translation services and electric vehicle charging business in Hong Kong.

As disclosed in the interim report of the Company for the six months ended 30 June 2021 (the “ 2021 Interim Report ”), the Directors considered that the business prospects for EV charging business is encouraging and sustainable. As the EV charging business involves high and new technology, for the purposes of strengthening the Company’s competitiveness in the industry, the Group focuses on research and development activities to adapt the constant fast-changing technology market. In order to capture the opportunities arising from the potential growth in EV charging business, the Group targeted to enhance the coverage of the private car parking spaces supported by our EV integrated charging solutions.

Pursuant to the 2021 Interim Report, the Group had cash and bank balances of approximately HK$17.4 million, represent a decrease of 40.5% from 31 December 2020. Taking into consideration of the Board’s intention to develop the EV charging business and the estimated costs of the Group to maintain its normal business operations in the forthcoming twelve-month period, the Directors consider that the Placing will provide immediate funding to the Company to (i) invest in research and development activities in EV charging business; (ii) undertake future investment opportunities in the EV charging business sector would, by nature, involve substantial amount of cash to undertake acquisitions of assets/ business and/or in capital expenditures; (iii) sustain commercial and financial printing business operation; and (iv) serve as the working capital and general corporate purposes for the Group.

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INTENDED USE OF PROCEEDS

Assuming all the Placing Shares are fully placed, the aggregate gross proceeds from the Placing are expected to be HK$50.4 million. After deducting related professional fees and all related expenses of approximately HK$2.6 million to be borne by the Company under the Placing, the net proceeds of the Placing will amount to approximately HK$47.8 million. The Company intends to apply the aggregate net proceeds from the Placing for as follows:

• (i) as to approximately 80% of the aggregate net proceeds, for EV charging business development;

• (ii) as to approximately 10% of the aggregate net proceeds, for commercial and financial printing business operation; and

• (iii) as to approximately 10% of the aggregate net proceeds, as working capital and general corporate purposes for the Group.

EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

For illustration purposes, the effect of the completion of the Placing on the shareholding structure of the Company is set out below:

Shareholding structure of the Company immediately upon completion of the Placing

Shareholders Global Fortune Global Limited Glorytwin Limited Mr. Lau Wai Yan Lawson Mr. Pan Wenyuan Mr. Li Man Keung Edwin The Placees Other public shareholders Total	Shareholding as at the date of this announcement Number of Shares held Approximate % of Shares in issue 235,603,225 39.28% 81,000,000 13.50% 30,302,703 5.05% 23,872,000 3.98% 19,112,613 3.19% — — 209,900,000 35.00% 599,790,541 100.00%	Shareholding immediately upon completion of the Placing Number of Shares held Approximate % of Shares in issue 235,603,225 35.07% 81,000,000 12.06% 30,302,703 4.51% 23,872,000 3.55% 19,112,613 2.85% 72,000,000 10.72% 209,900,000 31.24% 671,790,541 100.00%

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EQUITY FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS

The Company has conducted the following equity fund raising activities in the past 12 months immediately preceding the date of this announcement:

Actual

Date of

Date of Intended use of proceeds announcements use of proceeds as at the date and circular Fund raising activity Net proceeds as announced of this announcement 15 December 2020, Placing of new shares Approximately EV charging business Fully applied for: 4 January 2021, under general mandate; HK$47.2 million development, 22 January 2021 and and subscription of new commercial and (a) HK$33.0 million for EV 10 February 2021 shares under specific financial printing business development; mandate business operation, working capital and (b) HK$9.5 million for general corporate commercial and financial purposes printing business operation; (c) HK$4.7 million for working capital and general corporate purposes

LISTING RULES IMPLICATIONS

As the Placing Shares will be issued and allotted under the Specific Mandate to be obtained at the EGM, the Placing is subject to the Shareholders’ approval. A circular containing, among other things, (i) further details of the Placing; and (ii) a notice convening the EGM, will be despatched to the Shareholders as soon as practicable in accordance with the GEM Listing Rules.

EGM

The EGM will be convened to consider and, if thought fit, approve (i) the Placing Agreement and (ii) the grant of the Specific Mandate for the issue and allotment of the Placing Shares and the transactions contemplated thereunder. On the assumption that the scenario of the placing of Placing Shares to the Interested Parties referred to above does not occur, to the best of the knowledge, information and belief of the Directors, none of the Shareholders has a material interest in the transactions contemplated under the Placing Agreement as at the date of this announcement. Accordingly, none of the shareholder will be required to abstain from voting at the EGM in respect of the relevant resolution(s) relating to the Placing and the Specific Mandate. If, the Placing will eventually involve Placee(s) who are the Interested Parties and being connected person(s) of the Company as set out above, the Interested Parties shall not be

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entitled to vote on the resolution(s) of the Company approving the Placing Agreement and the grant of the Specific Mandate for the issue and allotment of the Placing Shares at the EGM and that the Placing Agent and the Company shall ensure that this shall be so and that the issue and allotment of such Placing Shares shall not trigger general offer obligation as defined under the Takeovers Code. The Company will make further announcement(s) as and when appropriate in compliance with the GEM Listing Rules.

General

Placing Completion is subject to the fulfillment of the conditions precedent set out in the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions shall have the following meanings when used herein:

• “associate(s)” has the meaning ascribed to it in the GEM Listing Rules “Board” the board of Directors “Business Day” any day on which the Stock Exchange is open for business to deal in securities

• “Company” Cornerstone Technologies Holdings Limited, a company incorporated in the Cayman Islands with limited liability whose issued Shares are listed on GEM (stock code: 8391)

• “connected person(s)” has the meaning as ascribed to it in the GEM Listing Rules “Director(s)” director(s) of the Company “EGM” the extraordinary general meeting of the Company to be held to approve, among other things, (i) the Placing Agreement and (ii) the grant of the Specific Mandate for the issue and allotment of the Placing Shares and the transactions contemplated thereunder

• “GEM” GEM operated by the Stock Exchange “GEM Listing Rules” the Rules Governing the Listing of Securities on GEM “Group” the Company and its subsidiaries

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“Hong Kong”

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

• “Independent Third any person or company and their respective ultimate beneficial owner(s) (if Party(ies)” applicable) who, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of and not connected with the Group, its connected persons and their respective associates and not acting in concert with any substantial shareholder (as defined under the GEM Listing Rules) of the Company within the meaning of Takeovers Code

• “Listing Committee” The Listing Committee of the Stock Exchange

• “Long Stop Date” 31 March 2022

• “Placee(s)” any person or entity, who is professional, institutional or other investors, procured by the Placing Agent or its agent(s) to subscribe for any Placing Shares pursuant to the Placing Agreement

• “Placing” the placing, on a best effort basis, of up to 72,000,000 Placing Shares in up to two or more tranches subject to the terms and condition set out in the Placing Agreement

• “Placing Agent” VBG Capital

• “Placing Agreement” the placing agreement dated 30 September 2021 and entered into between the Company and the Placing Agent in relation to the Placing

• “Placing Completion” completion of each tranche of the Placing Shares in accordance with the Placing Agreement

• “Placing Completion Date” the date of completion of each tranche of the Placing Shares which shall fall on a date after the date of fulfilment of all the conditions precedent set out in the Placing Agreement

• “Placing Period” in respect of each and every tranche of the Placing Shares, the period commencing on the day after the EGM and expiring on 19 January 2022 (both days inclusive) or on such later date which the Company and the Placing Agent may agree in writing, but in any event not later than the Long Stop Date

• “Placing Price” HK$0.7 per Placing Share (exclusive of any brokerage, SFC transaction levy and Stock Exchange trading fee as may be payable)

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• “Placing Share(s)” a total of up to 72,000,000 new Shares to be placed by the Placing Agent pursuant to the Placing Agreement and to be issued and allotted under the Specific Mandate, and each a “ Placing Share ”

• “SFC” The Securities and Futures Commission of Hong Kong “Share(s)” ordinary share(s) in the share capital of the Company “Shareholder(s)” holder(s) of the issued Share(s) “Specific Mandate” the specific mandate to be approved by the Shareholders at the EGM which authorises the Directors to issue, allot and deal with the Placing Shares

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” The Codes on Takeovers and Mergers and Share Buy-backs published by SFC

• “VBG Capital” a licensed corporation which is principally engaged in type 1 regulated activity (dealing in securities) and type 6 regulated activity (advising on corporate finance) under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong)

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

• “%” per cent

On behalf of the Board

Cornerstone Technologies Holdings Limited LIANG Zihao

Co-Chairman and Executive Director

Hong Kong, 30 September 2021

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As at the date of this announcement, the executive Directors are Mr. LIANG Zihao, Mr. SAM WENG WA Michael, Mr. LI Man Keung Edwin, Mr. LAU Wai Yan Lawson and Mr. PAN Wenyuan, the non-executive Director is Mr. WU Jianwei and the independent non-executive 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.cstl.com.hk.

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