THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Cornerstone Technologies Holdings Limited (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) take no responsibility for the contents of this circular, 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 circular.

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

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)

(1) MAJOR TRANSACTION SUBSCRIPTION OF COMMON SHARES IN THAILAND COMPANY;

(2) SUBSCRIPTION OF CONVERTIBLE NOTES UNDER SPECIFIC MANDATE; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser to the Company

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A letter from the Board is set out from pages 6 to 49 of this circular. A notice convening the extraordinary general meeting of the Company (“ EGM ”) to be held at 21/F., Grand Millennium Plaza, 181 Queen’s Road Central, Sheung Wan, Hong Kong on Friday, 25 October 2024 at 3:00 p.m. is set out from pages EGM-1 to EGM-3 of this circular.

This circular will remain on the website of the Company at www.cstl.com.hk and the website of the Stock Exchange at www.hkexnews.hk on the “Latest Listed Company Announcements” page for at least seven days from the date of its posting.

No refreshments will be served and there will be no corporate gifts.

4 October 2024

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

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	Page
CHARACTERISTICS OF GEM i
DEFINITIONS 1
LETTER FROM THE BOARD	5
APPENDIX I – FINANCIAL INFORMATION OF THE GROUP	I-1
APPENDIX II – GENERAL INFORMATION	II-1
NOTICE OF EGM	EGM-1

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DEFINITIONS

In this circular, the following expressions have the following meanings, unless the context otherwise required:

“Adjustment Long Stop Date” 31 December 2027 or such other date as the parties may agree in writing
“Approved EV Charging the electric vehicle charging stations located at the gas stations Stations” operated by Bangchak as approved by the Subscriber
“associate(s)” has the meaning ascribed to it under the GEM Listing Rules
“Automatic Conversion the milestone that shall trigger the automatic conversion of the Milestone(s)” Convertible Notes, subject to the Conversion Restrictions and the terms and conditions of the Convertible Notes
“Bangchak” Bangchak Corporation Public Company Limited
“Board” the board of Directors
“Board of Investments of an agency of the government of Thailand to promote foreign Thailand” investment in Thailand
“Business Day(s)” any day on which the Stock Exchange is open for the business of dealing in securities
“CAPEX” capital expenditures
“CB Asset One” CB Asset One Limited, a wholly-owned subsidiary of the Company, incorporated and existing under the laws of Hong Kong.
“CN Subscription” the subscription of the Convertible Notes pursuant to the terms and conditions of the CN Subscription Agreement under the Specific Mandate
“CN Subscription Agreement” the conditional subscription agreement dated 20 September 2024 and entered into between the Company as issuer and the Subscriber
“Common Shares Subscription” the aggregate subscription of 35.6% equity interest of Spark in common shares by the Company in tranches pursuant to the terms and conditions of the Common Shares Subscription Agreement
“Common Shares Subscription the subscription agreement dated 20 September 2024 and entered Agreement” into between CB Asset One and Spark
“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)

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DEFINITIONS

“Completion” completion of the Common Shares Subscription Agreement “connected person(s)” has the meaning ascribed to it under the GEM Listing Rules “Conversion Price” the conversion price per Conversion Share (subject to adjustments) of the Convertible Notes and being the lower of 80% to the 90-days VWAP or HK$0.50 per Conversion Share initially
“Conversion Share(s)” the Shares to be issued and allotted upon conversion of the Convertible Notes
“Conversion Restrictions” restriction to the Conversion Rights to the Conversion Notes pursuant to the CN Subscription Agreement
“Conversion Rights” the rights to convert the Notes pursuant to the CN Subscription Agreement
“Convertible Notes” Tranche 1 Convertible Note, Tranche 2 Convertible Note and Tranche 3 Convertible Note
“Director(s)” director(s) of the Company

“EBITDA”	earnings before interest, tax, depreciation and amortization
“EGM”	the extraordinary general meeting of the Company to be convened
	to consider and, if thought fit, approve the Common Shares
	Subscription Agreement and the CN Subscription Agreement and
	the transactions contemplated thereunder including but not limited
	to the allotment and issue of the Conversion Shares

“EV” electric vehicle
“EV Verse” EV Verse Company Limited, a company incorporated and existing under the laws of Thailand
“Gaw Capital” Gaw Capital Partners
“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
“HK$” Hong Kong dollars, the lawful currency of Hong Kong

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

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DEFINITIONS

“Independent Third third party(ies) independent of the Company and its connected Party(ies)” persons
“JV Arrangement” the arrangement of between the CB Asset One and the JV Partners for the holding and operation of Spark subject to the terms and conditions of the Shareholders’ Agreement
“JV Partners” shareholders of Spark, other than CB Asset One
“Latest Practicable Date” 4 October 2024, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular
“Listing Committee” the listing committee of the Stock Exchange
“Maturity Date” 5 years from the date of the issuance of the Tranche 1 Convertible Note
“Noteholder(s)” holder of the Convertible Notes
“Preference Shares the subscription of equity interest of Spark in preference shares Subscription” by the Subscriber in tranches pursuant to the terms and conditions of the Preference Shares Subscription Agreement
“Preference Shares the subscription agreement dated 20 September 2024 entered into Subscription Agreement” between the Subscriber and Spark
“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Share(s)” ordinary share(s) with a nominal value of HK$0.01 each in the share capital of the Company
“Shareholder(s)” holder(s) of the Share(s) of the Company
“Shareholders’ Agreement” the agreement to be entered into between CB Asset One and the JV Partners in relation to the arrangement, inter alia the shareholders’ right and each shareholders’ commitment and responsibilities, of Spark
“Spark” Spark EV Company Limited, a company incorporated under the laws of Thailand, being the subject vehicle of the Shareholders’ Agreement

“Specific Mandate” the specific mandate for the allotment and issue of the Conversion Shares which is subject to the approval by the Shareholders voting by way of poll at the EGM

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

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DEFINITIONS

“Subscriber”
Floryn Passie Limited
“THB” Thai baht, the lawful currency of Thailand
“Tranche 1” completion of the initial number of Approved EV Charging Stations
“Tranche 1 Common Shares” 711,521 common shares of Spark
“Tranche 1 Convertible Note” the 6.0% coupon convertible notes due on Maturity Date in the principal amount of HK$95,600,000 to be issued by the Company to the Subscriber in accordance with the terms of the CN Subscription Agreement
“Tranche 1 Long Stop Date” 30 November 2024 or such other date as the parties may agree in writing
“Tranche 1 Subscription Price” HK$95,600,000 being the subscription price of the Tranche 1 Convertible note
“Tranche 2”
completion of the additional number of Approved EV Charging Stations following Tranche 1
“Tranche 2 Common Shares” 1 common share of Spark
“Tranche 2 Convertible Note” the 6.0% coupon convertible notes due on Maturity Date in the principal amount of HK$51,300,000 to be issued by the Company to the Subscriber in accordance with the terms of the CN Subscription Agreement “
“Tranche 2 Long Stop Date” 31 December 2027 or such other date as the parties may agree in writing
“Tranche 2 Milestone” The achievement of the agreed average daily utilization rate and average CAPEX of the chargers installed in Tranche 1
“Tranche 2 Subscription Price” HK$51,300,000 being the subscription price of the Tranche 2 Convertible note
“Tranche 3” completion of the additional number of Approved EV Charging Stations following Tranche 1 and Tranche 2
“Tranche 3 Common Shares”
1 common share of Spark
“Tranche 3 Convertible Note” the 6.0% coupon convertible notes due on Maturity Date in the principal amount of HK$53,100,000 to be issued by the Company to the Subscriber in accordance with the terms of the CN Subscription Agreement

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DEFINITIONS

“Tranche 3 Long Stop Date” 31 December 2027 or such other date as the parties may agree in writing “Tranche 3 Milestone” the achievement of the agreed average daily utilization rate and average CAPEX of the chargers installed in Tranche 1 and Tranche 2 “Tranche 3 Subscription Price” HK$53,100,000 being the subscription price of the Tranche 3 Convertible note “VWAP” Volume weighted adjusted price “Initial Long Stop Date” 30 November 2024 or such other date as the parties may agree in writing “%” per cent

Certain figures set out in this circular have been subject to rounding adjustments . Accordingly, figures shown as the percentage equivalents may not be an arithmetic sum of such figures . Any discrepancy in any table between totals and sums of amounts listed in this circular is due to rounding .

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LETTER FROM THE BOARD

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)

Executive Directors:

Mr. Liang Zihao (Co-Chairman) Mr. Li Man Keung Edwin (Vice Chairman) Mr. Sam Weng Wa Michael Mr. Pan Wenyuan Ms. Wu Yanyan Mr. Yip Shiu Hong

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Non-executive Director:

Mr. Wu Jianwei (Co-Chairman)

Independent Non-Executive Directors: Mr. Tam Ka Hei Raymond Mr. Yuen Chun Fai Ms. Zhu Xiaohui Mr. Ko Shu Ki Kenneth

Head Office and Principal Place of Business in Hong Kong: Office Units 1107 – 11 11th Floor New East Ocean Centre No. 9 Science Museum Road Kowloon, Hong Kong

4 October 2024

To the Shareholders

Dear Sir or Madam,

(1) MAJOR TRANSACTION SUBSCRIPTION OF COMMON SHARES IN THAILAND COMPANY;

(2) SUBSCRIPTION OF CONVERTIBLE NOTES UNDER SPECIFIC MANDATE; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 20 September 2024 in relation to, among other matters, CB Asset One entering into of the Common Shares Subscription Agreement and CN Subscription of Convertible Notes under the Specific Mandate.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with (i) information relating to the Common Shares Subscription Agreement; (ii) information relating to the CN Subscription Agreement; (iii) other information as required under the GEM Listing Rules; and (iv) the notice of the EGM.

THE COMMON SHARES SUBSCRIPTION AGREEMENT

On 20 September 2024 (after trading hours), CB Asset One entered into the Common Share Subscription Agreement with Spark pursuant to which CB Asset One has conditionally agreed to subscribe for an aggregate of 35.6% equity interest of Spark in common shares, on a fully diluted basis, at the aggregate subscription price of HK$180 million, pursuant to which the parties agreed to establish the JV Arrangement upon completion.

Date:

20 September 2024 (after trading hours)

Parties: (1) the Company; and (2) Spark

JV Arrangement

Pursuant to the Common Shares Subscription Agreement, CB Asset One has conditionally agreed to subscribe for an aggregate of 35.6% equity interest of Spark in common shares at the aggregate subscription price of HK$180 million in three tranches. On the same date, the Subscriber entered into a Preference Shares Subscription Agreement with Spark, pursuant to which the Subscriber has conditionally agreed to subscribe for equity interest of Spark in preference shares (holder(s) of which shall enjoy key rights of distribution priority and agreed return upon occurrence of liquidation events over the holder(s) of common shares) in three tranches.

Upon completion of the Tranche 1 Common Shares under the Common Shares Subscription Agreement, Spark and its shareholders (including CB Asset One) shall enter into a Shareholders’ Agreement to set out their rights and obligations in relation to Spark as the joint venture and to regulate the operation and management of Spark, which will be owned as to 35.6% by CB Asset One, on a fully diluted basis. A total amount of HK$180 million will be contributed in cash by CB Asset One pursuant to the Common Shares Subscription Agreement. Upon Completion, the Subscriber shall be a majority shareholder of Spark, and EV Verse shall have a minority interest in Spark. The capital contribution of CB Asset One and the Subscriber are based on the same valuation, and EV Verse’s minority interest is sweat equity. CB Asset One has no current intention to inject further capital into Spark.

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LETTER FROM THE BOARD

Accordingly, Spark will be accounted for as an associate of the Group and its financial results will not be consolidated into the consolidated financial statements of the Group. The aggregate capital contribution of HK$180 million by CB Asset One will be funded by the proceeds from the CN Subscription. The Common Shares Subscription Agreement and the CN Subscription Agreement are inter-conditional, therefore if the CN Subscription is voted down at the EGM, the Common Shares Subscription Agreement shall not proceed. Subject to the terms and conditions of the Common Shares Subscription Agreement, CB Asset One has the authority to appoint one director into the board of directors of Spark, and it is anticipated that upon Completion, Spark’s board of directors shall consists of four directors, the remaining three directors shall be nominated and appointed by the remaining JV Partners. Decisions of board of directors of Spark shall be subject to a simple majority vote system, subject to certain reserved matters which require consent from shareholder of Spark. The Company shall appoint Mr. Yip Shiu Hong to oversee the Company’s investment into Spark.

The total capital contribution of Spark and the amount of capital contributions was determined after an arm’s length negotiation between, inter alia, CB Asset One and Spark with reference to the initial capital expenditure of Spark and CB Asset One’s shareholding interest in Spark. The amount of capital contribution in each tranche and the initial capital expenditure of Spark was arrived after arm’s length negotiations in respect to the business plan and the expansion plans of Spark in setting up and building the amount of EV charging stations and was made with reference to the CAPEX for each charging station, the time spent for building each charging station and the expected and target turnover and utilisation rate of each charging station.

Given that the JV Arrangement provides the benefits as stated in the section headed “Reasons For and Benefits of Entering Into the Common Shares Subscription Agreement”, and that the contribution of CB Asset One into Spark is determined with reference to the above, the Board is of the view that the basis of determination of the total contribution into Spark and each tranche of capital contribution is fair and reasonable, on the normal commercial terms and in the interest of the Company and its Shareholders.

Condition precedent

Tranche 1 Common Shares

Completion of the Tranche 1 Common Shares is conditional upon, among others, the following conditions precedent (or waived in accordance with the terms and conditions of the Common Shares Subscription Agreement) on or before the Initial Long Stop Date:

(a) all conditions precedent of the CN Subscription in connection with funding for Tranche 1 having been satisfied (or waived) in accordance with the CN Subscription Agreement;
(b) Spark having obtained all the necessary consents and approvals (including setting the appropriate governance rights in Spark and other relevant factors) from the relevant Government Authorities (including but not limited to Board of Investments of Thailand) for completion of the Common Shares Subscription and the Preference Shares Subscription, respectively;

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LETTER FROM THE BOARD

(c) all necessary consents or approvals and the giving of all notifications by the Company in connection with the Common Shares Subscription Agreement and the Common Shares Subscription having been obtained; and
(d) other customary conditions precedent, including certain representations and warranties of Spark and the Company being true and correct in all respects, no material adverse effect to the Company having taken place and certain documents as required under the Common Shares Subscription Agreement being delivered by and to the parties;

provided, however, at any time before the Initial Long Stop Date, CB Asset One may, at its discretion, waive the satisfaction of any conditions precedent above (other than conditions precedent (a) and (b)) subject to the terms and conditions of the Common Shares Subscription Agreement.

Tranche 2 Common Shares

Completion of the Tranche 2 Common Shares is conditional upon, among others, the following condition being satisfied (or waived in accordance with the terms and conditions of the Common Shares Subscription Agreement) on or before the Adjustment Long Stop Date:

(a) Spark having obtained the Board of Investment of Thailand promotion certificate confirming the shareholding percentage to include the JV Partners and the Company’s investment;
(b) Spark having obtained foreign business certificate confirming that the Company is permitted to have a majority of foreign shareholders;
(c) Spark having obtained copy of (i) the minutes of a duly held meeting of the shareholder(s) of the Company approving the capital increase in the capital contribution in relation to the Tranche 2 Common Shares and (ii) adopting the articles of association of such capital increase;
(d) the completion of the subscription of the Tranche 1 Common Shares having taken place in accordance with the provisions of the Common Shares Subscription Agreement; and
(e) all conditions precedent of the CN Subscription in connection with funding for Tranche 2 having been satisfied (or waived) in accordance with the CN Subscription Agreement;
(f) other customary conditions precedent, including certain representations and warranties of Spark being true and correct in all respects, and certain documents as required under the Common Shares Subscription Agreement being delivered by and to the parties,

provided, however, at any time before the Adjustment Long Stop Date, CB Asset One may, at its discretion, waive the satisfaction of the conditions precedent above (other than conditions precedent (a), (b), (e) and certain conditions precedent of (b) in Tranche 1 Common Shares) subject to the terms and conditions of the Common Shares Subscription Agreement. In respect of conditions precedents (a) and (b), Spark is unable to apply for the Board of Investment of Thailand (“ BOI ”) promotion certificate until it has received the subscription funds, as the terms of the BOI approval require a registered capital of at least THB 200 million, and Spark is unable to apply for

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LETTER FROM THE BOARD

the foreign business certificate until it has received the BOI certificate. Therefore the BOI certificate and the foreign business certificate is not a conditions precedent for the Tranche 1 Common Shares.

Tranche 3 Common Shares

Completion of the Tranche 3 Common Shares is conditional on each of the following conditions precedent (or waived in accordance with the terms and conditions of the Common Shares Subscription Agreement) on or before the Adjustment Long Stop Date:

(a) the completion of the subscription of the Tranche 1 Common Shares and the Tranche 2 Common Shares having taken place in accordance with the provisions of the Common Shares Subscription Agreement;
(b) all conditions precedent of the CN Subscription in connection with funding for Tranche 3 having been satisfied (or waived) in accordance with the CN Subscription Agreement; and
(c) other customary conditions precedent, including certain representations and warranties of Spark and the Company being true and correct in all respects, no material adverse effect to the Company having taken place and certain documents as required under the Common Shares Subscription Agreement being delivered by and to the parties,

Exclusive Management Services

Pursuant to the Shareholders’ Agreement, the relationship between the Company and Spark, shall be governed in accordance with the terms and conditions under a service agreement to be entered into between Spark and the Company (including the requisite service level agreements, shall be subject to the review and agreement by the JV Partners) upon completion of the Common Shares Subscription Agreement and Preference Shares Subscription Agreement. It is preliminary arranged that the Company’s scope of work in relation to the service agreement to be entered into is as follows:

The Company shall perform all work necessary for the complete execution and completion of the design, procurement, construction, and commissioning of EV charging stations across Thailand, including but not limited to:

design and engineering;
procurement of equipment and materials;
construction and installation; and
testing and commissioning

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LETTER FROM THE BOARD

In consideration of entering into the service agreement, the Company shall receive a retainer fee to secure the Company’s availability and commitment to provide the work above as well as a contractor fee equal to 10% of the total capital expenditure required to construct each EV charging station. It is anticipated that the service agreement shall be of a term of 9 years.

Equity transfer

Pursuant to the Shareholders’ Agreement, shareholders of Spark will have a customary right of first refusal with respect to any shares of Spark proposed to be transferred (directly or indirectly) by any shareholder to any third party.

INFORMATION ON THE PARTIES TO THE JV ARRANGEMENT

The Company and CB Asset One

The Company is a company incorporated in the Cayman Islands with limited liability whose issued Shares are listed on GEM (stock code: 8391) and together with its subsidiaries, are principally engaged in the electric vehicle charging business. CB Asset One Limited, a wholly-owned subsidiary of the Company, which is a company incorporated and existing under the law of Hong Kong. Its principal business is investment holding.

The Subscriber

The Subscriber is controlled by a fund that is managed and controlled by and its general partner is Gaw Capital and/or its affiliates as at the Latest Practicable Date. Gaw Capital, which is led and managed by Goodwin Gaw, Kenneth Gaw, Christina Gaw and Hing Bong Humbert Pang, is a private equity fund management company focusing on real estate and private equity markets in Asia Pacific and other high barrier-to-entry markets globally and has a wide investor base. Gaw Capital’s investments span the entire spectrum of real estate sectors, including carparks, residential development, offices, retail malls, hospitality, logistics warehouses and internet data centre projects. To the best of the Director’s knowledge, information and belief, having made all reasonable enquiries, as of the Latest Practicable Date, Gaw Capital, Goodwin Gaw, Kenneth Gaw, Christina Gaw and Hing Bong Humbert Pang and their respective associates are Independent Third Parties.

EV Verse

EV Verse is an investment holding company incorporated and existing under the laws of Thailand, and its ultimate beneficial owners are and is owned as to (i) 50% by Coco Capital Co., Limited, which is owned as to 95% by Mr. Voravee Plookcharoen, with the remainder by investors including Krisdakom Construction Co., Limited which is owned as to 97% by Mr. Somkiat Jiebna, and by Mr. Sahapattara Suprakob, and as of the Latest Practicable Date, to the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, they and their respective associates are Independent Third Parties.

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LETTER FROM THE BOARD

Mr. Voravee Plookcharoen, the chief executive officer of EV Verse, was chief executive officer of Solar One, a company engaged in solar panel business. His experience in the solar panel business provides him with good background in electrical system installation, project management and procurement, as well as regulatory compliance and coordination with the local electric authorities (Metropolitan Electricity Authority and Provincial Electricity Authority of Thailand).

Mr. Somkiat Jiebna is the founder and beneficial owner of Kridsadakorn Construction Co., Limited, boasting over 20 years of experience in the construction industry. He is well-respected in the government sector for his leadership on critical projects, such as the Pak Taklong Water Pumping Station optimization and various water source development initiatives, underscoring his dedication to sustainable development and environmental conservation.

Mr. Sahaphattara Suprakob is a prominent figure in the construction and financial sectors, holding significant roles in multiple companies, including Kridsadakorn Construction Co., Limited and Green Wellness Innovation. With over 20 years of experience in credit management at Siam Commercial Bank, he brings substantial financial expertise and strategic insight to his various leadership positions.

Spark

Spark is a company incorporated and existing under the laws of Thailand on 12 January 2024, it is principally engaged in EV charging operations in Thailand. As of the Latest Practicable Date, Spark is owned as to 1% by Mr. Sahaphattara Suprakob and as to 99% by investors including EV Verse. Prior to the entering of the Common Shares Subscription Agreement, the Company has initiated 3 pilot sites which are engaged in the operation of EV charging stations with Spark to promote stakeholder’s and potential investors’ interests in Spark. As at 30 June, 2024, the Company has lent approximately HK$2.9 million to build these 3 EV charging stations, and in the event that Spark is unable to secure any investor interests or conduct any fundraising activity, the 3 EV charging stations shall be returned to the Company. The transaction does not constitute a notifiable transaction under Chapter 19 of the GEM Listing Rules, further announcement(s) in relation to the matters referred to above will be made by the Company as and when required in accordance with the GEM Listing Rules. The Company understands that the business plan of Spark is in compliant with all the relevant laws and regulations of the laws of Thailand.

To the best of the directors’ knowledge, information and belief having made all reasonable enquiry, there is, and in the past twelve months, there has been, no material loan arrangement between (a) each of the parties to the JV Arrangement, any of its directors and legal representatives and/or any ultimate beneficial owner(s) of the parties to the JV Arrangement who can exert influence on the transactions; and (b) the Company, any connected person at the Company’s level and/or any connected person of the Company’s subsidiaries involved in the transactions.

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LETTER FROM THE BOARD

Financial Information of Spark

As at the Latest Practicable Date, there is no key financial information of Spark as it was incorporated on 12 January 2024 with less than a full year of business operation. Pursuant to the management accounts of Spark, for the period between 12 January 2024 and 30 April 2024, Spark has recorded nil revenue and loss of approximately THB2.3 million. As at 30 April 2024, Spark has recorded a net liabilities position of approximately THB1.1 million.

REASONS FOR AND BENEFITS OF ENTERING INTO THE COMMON SHARES SUBSCRIPTION AGREEMENT

Reference is made to the voluntary announcements of the Company dated 19 March 2024, 17 June 2024 and 17 July 2024 ( the “ Voluntary Announcements ”), pursuant to which the Company has signed a non-binding term sheet with a potential investor for a potential sizeable investment to support the Company’s overseas expansion of its EV charging business in Thailand. Upon completion of the Common Shares Subscription and Preference Shares Subscription, the Company will enter into a definitive agreement, namely the Shareholders’ Agreement, whereby the Company leveraging the resources and capital injection from the Subscriber, and the local resources and network of Mr. Sahaphattara Suprakob and Mr. Voravee Plookcharoen, parties concerned including but not limited to are able to strengthen its presence in the EV charging industry in the Southeast Asia region. Spark shall plan, install, build-out and operate over 600 EV chargers in Thailand across the target sites assessed by Spark. The total investment amount for the installation, build-out and operation of the Company into Spark shall be HK$180 million which shall be allocated as to 42% of the total contribution to Tranche 1, 28.5% of the total contribution to Tranche 2 and 29.5% of the total contribution to Tranche 3. It is expected that Spark shall utilise the entire contribution by the end of 2029. It is anticipated that the CB Asset One’s contribution into Spark shall be utilised to fund the installation and operation of initial chargers in Tranche 1 commencing upon completion of the Tranche 1 Common Shares. Further contribution by CB Asset One into Spark in Tranche 2 and Tranche 3 shall be subject to the achieving of the agreed average daily utilization rate and average CAPEX of the chargers installed in Tranche 1 (i.e. the Tranche 2 Milestone) and the chargers installed in Tranche 1 and Tranche 2 (i.e. the Tranche 3 Milestone), respectively, and shall be utilised to fund the installation and operation of chargers to be installed in Tranche 2 and Tranche 3, respectively. Each tranche was determined based on the business and expansion plan of Spark in the installation, build-out and operation over 600 EV chargers in Thailand. The Tranche 2 Milestone and Tranche 3 Milestone and their respective contributions of Tranche 1 Common Shares, Tranche 2 Common Shares and Tranche 3 Common Shares were determined with reference to the Company’s previous projects and the labour and material costs in Thailand. While assessing the allocation of capital contribution of the three tranches, the Board has also took into account the initial expenditure in establishing a local team and sourcing of materials as well as the expected return and installation timeline of each station. The milestones together shall constitute a build out of over 600 EV charging stations, with the aggregate contribution by the Company of HK$180 million. Given that Spark is a new project for the Company, it was agreed between the Company and Spark that a bigger portion of contribution is required for the

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LETTER FROM THE BOARD

initial set up and preparation costs. Furthermore, the number of shares to be subscribed by the Company in each tranche, was determined with reference to the development progress and the Tranche 2 Milestone and Tranche 3 Milestone, as it is anticipated that Spark’s business shall be to build out EV charging stations, therefore each tranche’s contribution shall align with the number of EV charging stations built. The Board, taking into account of the above, are of the view that the Tranche 2 Milestone, and Tranche 3 Milestone and the amount of capital contribution in each tranche are fair and reasonable, on normal commercial terms and in the interest of the Company and its shareholders.

Pursuant to the 2023 Annual Report of the Group, the Group’s financial performance of the EV charging business has been outstanding, the revenue of the Group increased from HK$31.8 million for the year ended 31 December 2022 to HK$78.1 million for the year ended 31 December 2023, representing a growth of 145.6%, whereas the gross profit of the Group from HK$3.2 million for the year ended 31 December 2022 to HK$14.2 million for the year ended 31 December 2023, representing a growth of 343.8%. The Hong Kong SAR Government, together with the Thai government, are supportive to the overall development of, and investments in green technology, EV infrastructure and e-mobility ecosystem. The Group’s investments into Spark, with the above support by the initiatives of these two governments, is primed to benefit from the substantial EV charging market presented in Thailand. Taking into account that Thailand is gradually increasing the demand for EV charging stations with the government’s support and general trend globally, the Common Shares Subscription Agreement marks the start of the expansion of CB Asset One into the EV charging business in Thailand and a potential substantial growth for CB Asset One. Prior to the signing of the Common Shares Subscription Agreement, CB Asset One has conducted due diligence on Spark including but not limited to reviewing the legal, accounting and other document and files commercial due diligence on the market and background checks of the JV Partners, and the Board and CB Asset One are satisfied with the results.

On 26 January 2023, an addendum to the memorandum of understanding on cooperation in the development of EV charging stations and EV pavilions in Bangchak gas stations was entered into between EV Verse, Spark and the Company whereas Spark is able to build and operate EV charging sites at the gas stations of Bangchak in Thailand. Pursuant to the addendum, the scope of responsibilities of the parties are Spark shall install and manage EV charging stations, EV pavilions, and other related businesses under the brand of ‘SPARK’ in Bangchak Gas Stations nationwide for each branch for a period of not less than 9 years from the date of first service of each EV charging station or EV pavilion and both parties agree to provide support and cooperation in order to successfully implement the project and/or other related actions according to the objectives of the memorandum of understanding. The addendum and the memorandum of understanding do not create any obligations on both parties in hiring laborers, hiring to produce something, becoming partners and appointing principals and agents between each other. The proceeds from the capital injection by CB Asset One and the JV Partners will be used to fund Spark’s capital expenses and working capital for the build-out and operation of over 600 EV charging sites, at the gas stations of Bangchak in three tranches which corresponds to the initial CAPEX, Tranche 2 Milestone and Tranche 3 Milestone. As at the Latest Practicable Date, Bangchak is a Thailand based energy company listed on the Stock Exchange of Thailand (SET:

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LETTER FROM THE BOARD

BCP) and is principally engaged in the refining and marketing of petroleum products as well as investing in and operating green power plants including solar power, hydro power and wind power in Thailand and internationally. As Spark and Bangchak have not entered into a legal binding contract as at the Latest Practicable Date, it is not ensured that Spark is able to conduct the build-out and operation of EV charging stations at the gas stations of Bangchak. Spark is in the course of obtaining written commitment from Bangchak to allow Spark to conduct the build-out and operation of EV charging stations at the gas stations of Bangchak, as requested by the Company and the JV Partners. In the event that no legal binding contract is entered into with reference to the build-out and operation of EV charging stations at the gas stations of Bangchak, the Company shall reassess the use of proceeds of Spark and seek other business plans. The Company shall make relevant announcements on Spark as and when appropriate and as required under the GEM Listing Rules.

The Directors believe that the establishment of the JV Arrangement and the cooperation with the JV Partners will help the Group seize the opportunities to expand its EV charging business into Thailand,. To leverage on the background and experience of the parties and the cooperation with Bangchak, Spark shall thrive in its business operations in the EV charging business in Thailand, and the Group will thereby obtain the management advantages and potential return in investment which will in turn benefit the long-term operation and development of the Group’s EV charging business. The Company shall establish a working committee which shall be lead by the management of the Company to monitor the construction progress of each tranche milestone and the utilisation of the capital contributions for the Tranche 2 Common Shares and Tranche 3 Common Shares. Such working committee shall report to the management of the Company on a regular basis such that the milestones shall be executed accordingly. Though the holders of the preference shares of Spark shall enjoy a distribution priority in respect of Spark’s dividend policy, the Company is subject to the management contract as mentioned above and is entitled to a contractual fee which is payable before the dividends to be distributed to the holders of Spark’s preference shares and common shares. Accordingly, despite the Company is subscribing for the common shares of Spark, given that the Company has the right of receiving a contractual fee prior to the dividend, the Board is of the view that the entering of the Common Shares Subscription Agreement is fair and reasonable and is beneficial to the Company and its Shareholders.

The terms of the Common Shares Subscription Agreement and the JV Arrangement were arrived after arm’s length negotiations. The Directors (including the independent non-executive Directors) consider that the terms and conditions of the Common Shares Subscription Agreement and the JV Arrangement were entered into on normal commercial terms and the terms therein are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

SUBSCRIPTION OF CONVERTIBLE NOTES UNDER SPECIFIC MANDATE

On 20 September 2024 (after trading hours), the Company entered into the CN Subscription Agreement with the Subscriber, pursuant to which the Company agreed to issue and the Subscriber agreed to subscribe in cash for the Convertible Notes in the aggregate principal amount of HK$200 million at the Conversion Price of the lower of 80% of the 90-days VWAP or HK$0.50 per Conversion Share.

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LETTER FROM THE BOARD

Set out below are the principal terms of the CN Subscription Agreement:

20 September 2024 (after trading hours)

Date: 20 September 2024 (after trading hours) Parties: (1) the Company as Issuer; and (2) the Subscriber.

CN Subscription

Subject to the fulfilment of the conditions precedent and the terms and conditions of the CN Subscription Agreement, the Subscriber shall subscribe for, and the Company shall issue to the Subscriber, the Convertible Notes in an aggregate principal amount of HK$200 million.

Conditions Precedent

Tranche 1 Convertible Notes

Completion of the subscription of the Tranche 1 Convertible Notes shall be conditional upon, among others, the following conditions precedent being satisfied (or if applicable, waived) on or before the Tranche 1 Long Stop Date:

(a) all conditions precedent of the Common Shares Subscription in connection with funding for Tranche 1 having been satisfied (or if applicable, waived) in accordance with the Common Shares Subscription Agreement;
(b) the Shares remaining listed, traded and are not suspended from trading on GEM;
(c) the Company having obtained the approval from the Stock Exchange for the listing of, and permission to deal in the Conversion Shares issued by the Company upon conversion of the Convertible Notes (including the Tranche 1 Convertible Notes, Tranche 2 Convertible Notes and Tranche 3 Convertible Notes), and such approval not having been revoked or cancelled prior to completion of the subscription and conversion of such Convertible Notes by the Subscriber;

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LETTER FROM THE BOARD

(d) the parties having complied with all applicable requirements under the GEM Listing Rules, and/or having completed, obtained and fulfilled all necessary approvals, notices and clearances of any relevant regulatory authorities or other relevant third parties as required (including but limited to requisite shareholders’ approval if so required) in respect of the issuance of the Convertible Notes and the transactions contemplated thereunder, if applicable;
(e) the Company having obtained the approval of the issuance of the Convertible Notes and the transactions contemplated thereunder, including the grant of the Specific Mandate;
(f) other customary conditions precedent, including certain representations and warranties of the Company being true and correct in all respects, no material adverse effect to the Company having taken place and certain documents as required under the CN Subscription Agreement being delivered by and to the parties,

provided, however, at any time before Tranche 1 Long Stop Date, the Subscriber may waive the satisfaction of the conditions precedent, save for conditions precedent (a), (b), (c), (d), (e) and certain conditions precedent of (f) above which shall not be waived.

Tranche 2 Convertible Notes

Completion of the subscription of the Tranche 2 Convertible Notes shall be conditional upon, among others, the following conditions precedent being satisfied (or if applicable, waived) on or before the Tranche 2 Long Stop Date:

(a) certain conditions precedent as set forth in the Tranche 1 Convertible Notes shall repeat herein and remain subsisting, valid, and not having been revoked or cancelled prior to completion date of Tranche 2;
(b) completion of Tranche 1 Convertible Notes having taken place in accordance with the terms and conditions of the CN Subscription Agreement;
(c) all conditions precedent of the Common Shares Subscription in connection with funding for Tranche 2 having been satisfied (or waived) in accordance with the Common Shares Subscription Agreement;
(d) other customary conditions precedent, including certain representations and warranties of the Company being true and correct in all respects, no material adverse effect to the Company having taken place and certain documents as required under the CN Subscription Agreement being delivered by and to the parties,

provided, however, at any time before Tranche 2 Long Stop Date, the Subscriber may waive the satisfaction of the conditions precedent above, save for conditions precedent (a), (b), (c) and certain conditions precedent of (d) above which shall not be waived.

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LETTER FROM THE BOARD

Tranche 3 Convertible Notes

Completion of the subscription of the Tranche 3 Convertible Notes shall be conditional upon, among others, the following conditions precedent being satisfied (or if applicable, waived) on or before the Tranche 3 Long Stop Date:

(a) certain conditions precedent as set forth for the Tranche 1 Convertible Notes shall repeat herein and remain subsisting, valid, and not having been revoked or cancelled prior to the completion date of Tranche 3;
(b) completion of Tranche 1 Convertible Notes and Tranche 2 Convertible Notes in accordance with the terms and conditions of the CN Subscription Agreement;
(c) all conditions precedent of the Common Shares Subscription in connection with funding for Tranche 3 having been satisfied (or waived) in accordance with the Common Shares Subscription Agreement;
(d) other customary conditions precedent, including certain representations and warranties of the Company being true and correct in all respects, no material adverse effect to the Company having taken place and certain documents as required under the CN Subscription Agreement being delivered by and to the parties,

provided, however, at any time before Tranche 3 Long Stop Date, the Subscriber may waive the satisfaction of the conditions precedent above, save for conditions precedent (a), (b), (c) and certain conditions precedent of (d) above which shall not be waived.

Completion

Completion of Tranche 1 Convertible Note, Tranche 2 Convertible Note, and Tranche 3 Convertible Note shall take place at 5:00 p.m. on the tenth (10th) Business Day after the date (not being later than Tranche 1 Long Stop Date, Tranche 2 Long Stop Date, and Tranche 3 Long Stop Date, as the case may be) upon which the last condition precedent in connection with Tranche 1 Convertible Note, Tranche 2 Convertible Note, and Tranche 3 Convertible Note (as the case may be) is satisfied or waived (or such other date and at such place as may be agreed in writing between the Subscriber and the Company). The Subscriber shall pay the Tranche 1 Subscription Price, Tranche 2 Subscription Price, and Tranche 3 Subscription Price to the Company in cash at completion of Tranche 1 Convertible Note, Tranche 2 Convertible Note, and Tranche 3 Convertible Note, respectively.

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LETTER FROM THE BOARD

Principal terms of the Convertible Notes

The principal terms of the Convertible Notes are as follows:

Issuer:

The Company

Aggregate principal Tranche 1 Convertible Note: HK$95,600,000 amount of the Tranche 2 Convertible Note: HK$51,300,000 Convertible Notes: Tranche 3 Convertible Note: HK$53,100,000

Interest: The Convertible Notes shall accrue 6.00% annually on the outstanding principal amount and shall be payable annually starting from the end of 2nd anniversary of the initial drawdown

Maturity Date: the date falling on the fifth (5th) anniversary of the date of the issuance of the Tranche 1 Convertible Note. All the Convertible Notes (including the Tranche 2 Convertible Note and the Tranche 3 Convertible note) shall have the same Maturity Date as above.

Conversion Right: The Noteholder shall have the right to convert all or any part of the Convertible Notes at any time from the date of issue of the Convertible Notes up to the Maturity Date. The number of Shares to be issued upon exercise of the Conversion Right attaching to any Convertible Notes shall be determined by dividing the principal amount and unpaid accrued interest of the Convertible Notes by the Conversion Price in effect on the the date of the Conversion. No fractions of a Conversion Share will be issued to any Noteholder upon the conversion of Convertible Notes and the number of Conversion Shares to be issued upon such conversion of Convertible Notes shall be rounded up to the nearest whole number of Conversion Shares.

Automatic Conversion: Subject to the conversion restrictions pursuant to the terms and conditions under the Convertible Notes, prior to the Maturity Date, the principal and unpaid accrued interest on the Convertible Notes will automatically convert into the Conversion Shares upon the occurrence of the following:
(a) Consolidated EBITDA is higher than zero(0) for each period of 12 months ending on the last day of each quarter of the Company’s financial year, and;

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LETTER FROM THE BOARD

(b) the Company has completed the build-out of the 1,000 Approved EV Charging Stations in Thailand to the Subscriber’s satisfaction, and;
(c) the total capital expenditure for building the Approved EV Charging Stations does not exceed HK$770 million, and;
(d) the 90 days VWAP (prior to the date of occurrence of the last Automatic Conversion Milestone) is not less than HK$1.0 per Share (subject to adjustment, from time to time in accordance with the terms and conditions according to the CN Subscription Agreement (adjustments to the Conversion Price),

Upon the occurrence of all the Automatic Conversion Milestones, subject to the Conversion Restrictions under the terms and conditions of the Convertible Notes, the Convertible Notes shall be automatically converted within 45 Business Days subject to the conversion procedure under the terms and conditions of the Convertible Notes.

Conversion Restrictions:

The Company shall only allot the Convertible Shares to the Noteholder if immediately following the exercise of the Conversion Rights by the Noteholder:

(a) the Company will be able to satisfy the public float requirement under the GEM Listing Rules;
(b) the Noteholder and persons acting in concert with them will not be required to make a general offer under Rule 26 of the Code on Takeovers and Mergers or such obligations having been waived (regardless of whether the obligation to make general offer arises from the allotment and issue of Conversion Shares upon the exercise of the conversion rights under the convertible notes); and
(c) the Noteholder will not be in breach of any relevant laws, rules and regulations, including but not limited to the GEM Listing Rules and Code on Takeovers and Mergers.

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LETTER FROM THE BOARD

Conversion price:

The initial Conversion Price is the lower of 80% to the 90-days VWAP or HK$0.50 per Conversion Share

HK$0.50 per Conversion Share represents:

(i) a discount of approximately 21.88% to the closing price of HK$0.64 per Share as quoted on the Stock Exchange on 19 September 2024, being the last trading day immediately preceding the date of the CN Subscription Agreement;
(ii) a discount of approximately 24.24% to the closing price of HK$0.66 per Share as quoted on the Stock Exchange for the five trading days immediately preceding the date of the CN Subscription Agreement; and
(iii) a theoretical dilution effect (as defined under Rule 10.44A of the GEM Listing Rules) of approximately 6.89% represented by the theoretical diluted price of approximately HK$0.592 to the benchmarked price of HK$0.652 per Share (as defined under Rule 10.44A of the GEM Listing Rules, taking into account the closing price on the last trading day immediately preceding the date of the CN Subscription Agreement of HK$0.64 and the average closing price of the Shares for the last five consecutive trading days immediately preceding the date of the CN Subscription Agreement of HK$0.652 per Share).

The equity fund raising activities for the past twelve months together with the CN Subscription resulted in a cumulative theoretical dilution effect (as defined under Rule 10.44A of the GEM Listing Rules) of approximately 7.59%, which is below 25% as required under Rule 10.44A of the GEM Listing Rules. The Conversion Price was determined after arm’s length negotiations between the Subscriber and the Company with reference to the prevailing market price, the market conditions, and the prospects of the Common Shares Subscription. The Board considers that the Conversion Price is fair and reasonable and is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

Conversion Shares:

Pursuant to the CN Subscription Agreement, in addition to the Automatic Conversion Milestones, the Noteholder shall have the right to convert all or any part of the Convertible Notes at any time from the date of issue of the Convertible Notes up to the Maturity Date. Based on the initial Conversion Price of HK$0.50 per Conversion Share, a total of 400,000,000 Conversion Shares (subject to the Conversion Restrictions and adjustments to the Conversion Price) will be allotted and issued upon exercise of the conversion rights attached to the Convertible Notes in full, representing (i) approximately 41.95% of the total number of Shares in issue as at the Latest Practicable Date; (ii) approximately 25.40% of the total number of Shares in issue as enlarged by the allotment and issue of the 324,630,000 Conversion Shares (taking into account the Conversion Restrictions); and (iii) approximately 29.55% of the total number of Shares in issue as enlarged by the allotment and issue of the 400,000,000 Conversion Shares (without taking into account the Conversion Restrictions and adjustments to the Conversion Price) upon full conversion of the Convertible Notes, and comprising of:

Tranche 1 Convertible Note:

191,200,000 Conversion Shares, which represent approximately 20.05% of the existing issued share capital of the Company and approximately 16.70% of the enlarged issued share capital of the Company upon the full conversion of the Tranche 1 Convertible Note.

Tranche 2 Convertible Note:

102,600,000 Conversion Shares, which represent approximately 10.76% of the existing issued share capital of the Company and approximately 9.71% of the enlarged issued share capital of the Company upon the full conversion of the Tranche 2 Convertible Note.

Tranche 3 Convertible Note:

106,200,000 Conversion Shares, which represent approximately 11.14% of the existing issued share capital of the Company and approximately 10.02% of the enlarged issued share capital of the Company upon the full conversion of the Tranche 3 Convertible Note.

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LETTER FROM THE BOARD

Adjustments to the Conversion Price:

Distributions

Adjustment Event: If and whenever the Company shall distribute any distribution to the Shareholders, the Conversion Price shall be subject to adjustment in accordance with this condition (Distributions).

Effective Date: For the purposes of this condition (Distributions), the “ Effective Date ” means the first date on which the Shares are traded ex-the relevant Distribution on the Stock Exchange or, in the case of a purchase, redemption or buy back of Shares or any depositary receipts (or any other receipts or certificates) representing Shares, the date such purchase, redemption or buy back is made or, in the case of a Spin-Off, the first date on which the Shares are traded ex-the relevant spin-off on the Stock Exchange or (in any such case), if later, the date upon which the fair market value of the relevant distribution is capable of being determined as provided herein.

Adjustment to the Conversion Price: If and whenever the Company shall distribute any distribution to the Shareholders, in relation to each Convertible Note for which the conversion date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

==> picture [36 x 22] intentionally omitted <==

where:

A = the current market price of one Share on the Effective Date; and
B = the fair market value on the Effective Date of the portion of the Distribution attributable to one Share

Distribution per Share: For the purposes of this condition (Adjustments to the Conversion Price), the portion of a distribution attributable to one Share shall be determined by dividing the fair market value of the distribution by the number of Shares entitled to receive the distribution (or, in the case of a purchase, redemption or buy back of Shares or any depositary receipts (or other receipts or certificates) representing Shares, by the number of Shares in issue immediately following such purchase, redemption or buy back, and treating as not being in issue any Shares, or any Shares represented by depositary receipts (or other receipts or certificates), purchased, redeemed or bought back).

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LETTER FROM THE BOARD

Effect of adjustment: The Conversion Price as adjusted pursuant to this condition shall apply, with effect from and including the Effective Date, to each Convertible Note for which the conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions.

Bonus Issues

Adjustment event: If and whenever the Company shall make any Bonus Issue, the Conversion Price shall be subject to adjustment in accordance with this condition (Bonus Issues).

Effective Date: For the purposes of this condition (Bonus Issues), the “ Effective Date ” means the date of issue of the relevant Shares.

Adjustment to the Conversion Price: In relation to each Convertible Note for which the conversion date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:

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where:

A = the number of Shares in issue immediately before the issue of such Shares; and
B = the number of Shares in issue immediately after the issue of such Shares.

Effect of adjustment: The Conversion Price as adjusted pursuant to this condition (Bonus Issues) shall apply, with effect from and including the Effective Date, to each Convertible Note for which the conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions.

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LETTER FROM THE BOARD

Alteration to Nominal Value

Adjustment event: If and whenever there shall be an alteration to the nominal value of the Shares as a result of consolidation or subdivision, the Conversion Price shall be subject to adjustment in accordance with this condition (Alteration to Nominal Value).

Effective Date: For the purposes of this condition (Alteration to Nominal Value), the “ Effective Date ” means the date on which such alteration becomes effective.

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where:

A = the number of Shares in issue immediately before such alteration; and
B = the number of Shares in issue immediately after such alteration.

Effect of adjustment: The Conversion Price as adjusted pursuant to this condition (Alteration to Nominal Value) shall apply, with effect from and including the Effective Date, to each Convertible Note for which the conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions (Adjustment on the Conversion Price).

Shares, Rights and Share-Related Securities Issued to Shareholders

Adjustment event: If and whenever the Company shall issue, grant or offer Shares, share-related securities, rights in respect of Shares or rights in respect of share-related securities to all or substantially all of the Shareholders as a class by way of rights as a result of which, in each case, Shareholders have the right to acquire Shares at a consideration per Share which is less than the current market price of the Shares on the Effective Date, the Conversion Price shall be subject to adjustment in accordance with this condition (Shares, Rights and Share-Related Securities Issued to Shareholders).

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LETTER FROM THE BOARD

Effective Date: For the purposes of this condition (Shares, Rights and Share-Related Securities Issued to Shareholders), the “Effective Date” means the first date on which the Shares are traded ex-rights, ex-warrants or ex-options on the Stock Exchange.

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where:

A = the number of Shares in issue on the Business Day immediately preceding the Effective Date;
B = the number of Shares which the aggregate consideration would purchase at the current market price of the Shares on the Effective Date; and
C = in the case of an issue, grant or offer of Shares, the number of Shares comprised in the issue, grant or offer; or

in the case of an issue, grant or offer of share-related securities or rights, the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such share-related securities or rights at the initial price or rate.

Formula: If on the date (the “ Specified Date ”) of issue, grant or offer of the relevant share-related securities, rights in respect of shares or rights in respect of share related securities, the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such share related securities or rights is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this condition (shares, rights and share-related securities issued to Shareholders), “C” shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.

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LETTER FROM THE BOARD

Effect of adjustment: The Conversion Price as adjusted pursuant to this Condition (shares, rights and share-related securities issued to Shareholders) shall apply, with effect from and including the Effective Date, to each Convertible Note for which the conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions (Adjustment on the Conversion Price).

Issues of Other Securities to Shareholders

Adjustment event: If and whenever the Company shall issue or grant any securities (other than shares, share-related securities, rights in respect of shares, rights in respect of share-related securities or spin-off securities) to all or substantially all of the Shareholders as a class by way of rights or the Company shall issue or grant any rights in respect of any securities (other than Shares, share-related securities, rights in respect of shares or rights in respect of share-related securities or spin-off securities) or assets to all or substantially all of the Shareholders as a class, the Conversion Price shall be subject to adjustment in accordance with this condition (Issues of Other Securities to Shareholders).

Effective Date: For the purposes of this condition (Issues of Other Securities to Shareholders), “ Effective Date ” means the first date on which the Shares are traded ex-rights, ex-warrants or ex-options on the Stock Exchange.

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where:

A = the current market price of one Share on the Effective Date; and
B = the fair market value on the Business Day immediately preceding the Effective Date of the portion of the rights attributable to one Share.

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LETTER FROM THE BOARD

Effect of adjustment: The Conversion Price as adjusted pursuant to this condition (Issues of Other Securities to Shareholders) shall apply, with effect from and including the Effective Date, to each Convertible Note for which the Conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions.

Issues of Shares at Below Current Market Price

Adjustment event: If and whenever the Company shall issue, wholly for cash, any Shares or the Company shall issue or grant, wholly for cash or for no consideration, rights in respect of Shares or rights in respect of share-related securities as a result of which, in each case, persons to whom the Shares or rights are issued or granted have the right to acquire Shares at a consideration per Share which is less than the current market price of the Shares on the date of the first public announcement of the terms of such issue or grant, the Conversion Price shall be subject to adjustment in accordance with this condition (Issues of Shares at Below Current Market Price). However, if any such issue or grant also falls within the terms of condition (Shares, Rights and Share-Related Securities Issued to Shareholders) or constitutes an issue of Shares consequent upon the exercise of Conversion Rights or on the exercise of any other rights of conversion into, or exchange or subscription for, Shares, the Conversion Price shall not be subject to adjustment in accordance with this condition (Issues of Shares at Below Current Market Price).

Effective Date: For the purposes of this condition (Issues of Shares at Below Current Market Price), the “ Effective Date ” means the date of issue of such Shares or, as the case may be, the issue or grant of such Rights.

Adjustment to the Conversion Price: In relation to each Convertible Note for which the Conversion date has not occurred prior to the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the Effective Date by the following fraction:

==> picture [39 x 22] intentionally omitted <==

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LETTER FROM THE BOARD

where:

A = the number of Shares in issue on the Business Day immediately preceding the date of the first public announcement of the terms of such issue or grant;
B = the number of Shares which the aggregate consideration would purchase at the current market price of the Shares on the date of the first public announcement of the terms of such issue or grant; and
C = in the case of an issue of Shares, the number of Shares issued; or

in the case of an issue or grant of Rights, the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares and, if applicable, share-related securities pursuant to the terms of such rights and, if applicable, share-related securities at the initial price or rate.

Formula: If on the date (the “ Specified Date ”) of issue or grant of the relevant rights in respect of shares or rights in respect of share-related securities the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares and, if applicable, share-related securities pursuant to the terms of such Rights and, if applicable, share-related securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this condition (Issues of Shares at Below Current Market Price), “C” shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.

Effect of adjustment: The Conversion Price as adjusted pursuant to this condition (Issues of Shares at Below Current Market Price) shall apply, with effect from and including the Effective Date, to each Convertible Note for which the Conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions.

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LETTER FROM THE BOARD

Share-Related Securities Issued Other than to Shareholders

Adjustment event: If and whenever the Company or any Subsidiary or (pursuant to arrangements with the Company or any of its Subsidiaries) any other person or entity shall issue, wholly for cash or for no consideration, any share-related securities or shall grant to any existing securities so issued such rights as to make such securities share-related securities as a result of which, in each case, persons to whom the share-related securities or such rights are issued or granted have the right to acquire Shares at a consideration per Share which is less than the current market price of the Shares on the date of the first public announcement of the terms of issue of such share-related securities or the terms of such grant, the Conversion Price shall be subject to adjustment in accordance with this condition (Share-Related Securities Issued Other than to Shareholders). However, if any such issue or grant also falls within the terms of condition (Shares, Rights and ShareRelated Securities Issued to Shareholders), condition (Issues of Other Securities to Shareholders) or condition (Issues of Shares at Below Current Market Price), the Conversion Price shall not be subject to adjustment in accordance with this condition (Share-Related Securities Issued Other than to Shareholders).

Effective Date: For the purposes of this condition (Share-Related Securities Issued Other than to Shareholders) the “ Effective Date ” means the date of issue of the share-related securities or the grant of the relevant rights.

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where:

A = the number of Shares in issue on the Business Day immediately preceding the date of the first public announcement of the terms of such issue or grant;
B = the number of Shares which the aggregate consideration would purchase at the current market price of the Shares on the date of the first public announcement of the terms of such issue or grant; and

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LETTER FROM THE BOARD

C = the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such share-related securities at the initial price or rate.

Formula: If on the date (the “ Specified Date ”) of issue of the relevant share-related securities or date of grant of such rights the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such share-related securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this condition (Share-Related Securities Issued Other than to Shareholders), “C” shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.

Effect of adjustment: The Conversion Price as adjusted pursuant to this condition (Share-Related Securities Issued Other than to Shareholders) shall apply, with effect from and including the Effective Date, to each Convertible Note for which the conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions.

Amendment of Terms of Rights or Share-Related Securities

Adjustment event: If and whenever the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of any Rights or Share-Related Securities are amended (other than in accordance with their terms of issue (including terms as to adjustment of such rights)) so that following such amendment the consideration per Share is (1) reduced and (2) less than the current market price of the Shares on the date of the first public announcement of the proposals for such amendment, the Conversion Price shall be subject to adjustment in accordance with this condition (Amendment of Terms of Rights or Share-Related Securities).

Effective Date: For the purposes of this condition (Amendment of Terms of Rights or Share-Related Securities), “Effective Date” means the date of amendment of such rights.

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LETTER FROM THE BOARD

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where:

A = the number of Shares issue on the Business Day immediately preceding the date of the first public announcement of the proposals for such amendment;
B = the number of Shares which the aggregate consideration (calculated taking account of the amended rights) would purchase at the current market price of the Shares on the date of the first public announcement of the proposals for such amendment (or, if lower, at the subscription, purchase or other acquisition price before the relevant amendment); and
C = the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such rights or share-related securities at the amended subscription, purchase or acquisition price or rate (but giving credit in such manner as shall be determined by an expert to be appropriate for any previous adjustment under condition (Distributions), condition (Shares, Rights and Share-Related Securities Issued to Shareholders), condition (Share-Related Securities Issued Other than to Shareholders) or this condition (Amendment of Terms of Rights or Share-Related Securities)).

Formula: If on the date (the “ Specified Date ”) of such amendment the maximum number of Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such rights or share-related securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this condition (Amendment of Terms of Rights or ShareRelated Securities), “ C ” shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.

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LETTER FROM THE BOARD

Effect of adjustment: The Conversion Price as adjusted pursuant to this condition (Amendment of Terms of Rights or Share-Related Securities) shall apply, with effect from and including the Effective Date, to each Convertible Note for which the Conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions.

Demerger

Adjustment event: If and whenever the Company or any subsidiary or (pursuant to arrangements with the Company or any of its subsidiaries) any other person or entity shall offer any securities in connection with which offer Shareholders as a class are entitled to participate in arrangements whereby such securities may be acquired by them, the Conversion Price shall be subject to adjustment in accordance with this condition (Demerger). However, if any such offer also causes the Conversion Price to be adjusted within the terms of condition (Shares, Rights and Share-Related Securities Issued to Shareholders) or condition (Issues of Other Securities to Shareholders) (or would cause the Conversion Price to be so adjusted if the relevant consideration per Share was less than the Current Market Price per Share on the relevant day), the Conversion Price shall not be subject to adjustment in accordance with this condition (Demerger).

Effective Date: For the purposes of this condition (Demerger), the “Effective Date” means the first date on which the Shares are traded ex-rights on the relevant exchange.

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where:

A = the current market price of one Share on the Business Day immediately preceding the date of the first public announcement of such offer; and

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LETTER FROM THE BOARD

B = the fair market value, on the date of the first public announcement of such offer, of the portion of such offer attributable to one Share (or if such date is not an Business Day, the immediately preceding Business Day).

Effect of adjustment: The Conversion Price as adjusted pursuant to this condition (Demerger) shall apply, with effect from and including the Effective Date, to each Convertible Note for which the Conversion date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to these conditions.

Other Events; Contemporaneous Events

Adjustment event: If any Convertible Note Holder reasonably determines that:

(a) an adjustment should be made to the Conversion Price as a result of one or more events or circumstances not referred to in condition (Distributions) to condition (Demerger) (even if the relevant event or circumstance is specifically excluded from the operation of condition (Distributions) to condition (Demerger)); or
(b) more than one event which gives rise or may give rise to an adjustment to the Conversion Price has occurred or will occur within such a short period of time that a modification to the operation of the adjustment provisions is required in order to give the intended result; or
(c) one event which gives rise or may give rise to more than one adjustment to the Conversion Price has occurred or will occur such that a modification to the operation of the adjustment provisions is required in order to give the intended result,
(d) it shall notify the Company and the Company shall, at its own expense, use all reasonable endeavours to procure that such adjustment (if any) to the Conversion Price as is fair and reasonable to take account thereof and the date on which such adjustment should take effect shall be Determined by an Expert provided that the Conversion Price may not be increased pursuant to this condition (Other Events; Contemporaneous Events).

Effective Date: Upon such determination, the Company shall procure that such adjustment (if any) shall be made and shall take effect in accordance with such determination.

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LETTER FROM THE BOARD

Certificate of Expert: If any doubt shall arise as to any appropriate adjustment to the Conversion Price, the Company shall use all reasonable endeavours to procure that the appropriate adjustment shall be determined by an expert and a certificate from the relevant expert as to the appropriate adjustment to the Conversion Price shall, in the absence of fraud and manifest error, be conclusive and binding on all concerned.

General Provisions regarding Adjustments

(a) Rounding and adjustments of less than 0 .1%: On any adjustment of the Conversion Price, the resultant Conversion Price, if not an integral multiple of HK$0.001, shall be rounded down to the nearest whole HK$0.001. No adjustment shall be made to the Conversion Price where such adjustment (rounded down if applicable) would be less than 0.1% of the Conversion Price then in effect. Any adjustment not required to be made, and any amount by which the Conversion Price has been rounded down, shall be carried forward and taken into account in any subsequent adjustment but such subsequent adjustment shall be made on the basis that the adjustment not required to be made had been made at the relevant time.
(b) Share Option Scheme: No adjustment shall be made to the Conversion Price where Shares or other securities (including rights, warrants or options) are issued, offered, exercised, allotted, appropriated, modified or granted to or for the benefit of, or are subscribed, purchased or otherwise acquired pursuant to the share option scheme.
(c) Adjustments not permitted by Law: The Conversion Price may not be adjusted so that exercise of the Conversion Right would require Shares to be issued in circumstances not permitted by applicable law.
(d) No upward adjustments: The Conversion Price may not be increased pursuant to this condition (Adjustments to the Conversion Price). To the extent that an adjustment event under condition (Adjustments to the Conversion Price) is triggered and such adjustment would result in an increase to the Conversion Price, no adjustment shall be made except in the case of a consolidation of the Shares as referred to in condition (Alteration to Nominal Value) only.

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LETTER FROM THE BOARD

Retroactive Adjustments

Adjustment Event: If and whenever the Conversion Price is to be adjusted pursuant to any of condition (Distributions) to condition (Demerger) and the Conversion date in relation to any Convertible Note is after the record date for any such issue, distribution, grant or offer as is mentioned in the relevant condition but before the relevant adjustment becomes effective under the relevant condition the Conversion Right attaching to the relevant Convertible Note shall be subject to adjustment in accordance with this condition (Retroactive Adjustments).

Adjustment to the Conversion Right: Upon the date on which the relevant adjustment becomes effective under the relevant Condition (the “ Retroactive Adjustment Date ”) the Company shall procure that there shall be issued to the converting Convertible Note Holder or in accordance with the instructions contained in the relevant Conversion Notice such additional number of Shares (the “ Additional Shares ”) as, together with the Shares issued or to be issued on conversion of the relevant Convertible Note (together with any fraction of a Share not so issued due to condition (Fractions), is equal to the number of Shares which would have been required to be issued on conversion of such Convertible Note if the relevant adjustment to the Conversion Price had in fact been made and become effective immediately before the relevant Conversion date. In calculating the number of any such Additional Shares the provisions of condition (Fractions) shall apply mutatis mutandis.

Shares in uncertificated form: Such Additional Shares will be delivered in uncertificated form through the relevant clearing system if the relevant Convertible Note Holder has requested in the Conversion Notice or otherwise notified the Company in writing that it wishes to receive the Shares in uncertificated form. Where Shares are to be issued through the relevant clearing system, they will be delivered to the account specified by the relevant Convertible Note Holder in the relevant Conversion Notice by not later than five (5) Business Days following the relevant Retroactive Adjustment Date.

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LETTER FROM THE BOARD

Shares in certificated form: Where such Additional Shares are to be issued in certificated form, if so requested in the relevant conversion notice or otherwise notified in writing by the relevant Noteholder, the Company will make a certificate or certificates available for collection at the office of the Company’s share registrar in Hong Kong or, if so requested in the relevant Conversion Notice or otherwise notified in writing by the relevant Noteholder, will cause its share registrar to deliver by courier at the request of such person such certificate or certificates to the person and at the place specified in the conversion notice or otherwise notified in writing by the relevant Noteholder, within 28 days following the relevant Retroactive Adjustment Date.

Rights Arising on Conversion: In the case of any Additional Shares, each reference in condition (Rights in respect of Shares issued upon conversion) to condition (Voting rights) to the Conversion date shall be deemed to be a reference to the relevant Retroactive Adjustment Date.

Aggregate Consideration and Consideration per Share

Applicability of this Condition: For the purpose of calculating any adjustment to the Conversion Price pursuant to this condition, in the case of any:

(a) issue, grant or offer of Shares, share-related securities, rights in respect of shares or rights in respect of share-related securities; or
(b) grant to any existing securities issued of such rights as to make such securities; or
(c) amendment of the terms of any rights or share-related securities (other than in accordance with their terms of issue),

the “ Aggregate Consideration ” and the “ Number of Shares ” shall be calculated or determined (if necessary) in accordance with the following provisions of this condition (Aggregate Consideration and Consideration per Share) and the “ Consideration per Share ” shall, in each case, be the relevant Aggregate Consideration divided by the relevant Number of Shares.

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LETTER FROM THE BOARD

Shares for cash: In the case of an issue, grant or offer of Shares for cash:

(a) the Aggregate Consideration shall be the amount of such cash, provided that in no such case shall any deduction be made for any commissions or any expenses paid or incurred by the Company for any underwriting of the issue or otherwise in connection therewith; and
(b) the Number of Shares shall be the number of Shares so issued, granted or offered.

Shares not for cash: In the case of the issue, grant or offer of Shares for a consideration in whole or in part other than cash:

(a) the Aggregate Consideration shall be the amount of such cash (if any) plus the consideration other than cash, which shall be deemed to be the fair market value thereof or, if pursuant to applicable law such determination is to be made by application to a court of competent jurisdiction, the value thereof as determined by such court or an appraiser appointed by such court, irrespective of the accounting treatment thereof; and
(b) the Number of Shares shall be the number of Shares so issued, granted or offered.

Issue of Share-Related Securities: In the case of the issue, grant or offer of share-related securities or rights in respect of share-related securities or the grant to any securities issued of such rights as to make such securities:

(a) the Aggregate Consideration shall be:
(A) the consideration (if any) received by the Company for such share-related securities and (if applicable) rights or, as the case may be, such grant; plus
(B) the additional consideration (if any) to be received by the Company upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such share-related securities at the initial price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire share-related securities pursuant to the terms of such rights at the initial price or rate,

the consideration in each case to be determined in the same manner as provided in conditions (Shares for cash); and

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LETTER FROM THE BOARD

(b) the Number of Shares shall be the number of Shares to be issued upon (and assuming) such exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such share-related securities at the initial price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire share-related securities pursuant to the terms of such Rights at the initial price or rate.

Amendment of Share-Related Securities/Rights in respect of ShareRelated Securities: In the case of the amendment of the terms of any share-related securities and/or rights in respect of share-related securities (in either case, other than in accordance with their terms of issue):

(a) the Aggregate Consideration shall be:
(A) the consideration (if any) received by the Company for such amendment; plus
(B) the additional consideration (if any) to be received by the Company upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such share-related securities at the initial price or rate or (in the case of an amendment to the terms of such share-related securities) the amended price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire share-related securities pursuant to the terms of such rights at the initial price or rate or (in the case of an amendment to the terms of such rights) the amended price or rate,

the consideration in each case to be determined in the same manner as provided in conditions (Shares for cash) and (Shares not for cash); and

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LETTER FROM THE BOARD

(b) the Number of Shares shall be the number of Shares to be issued upon (and assuming) such exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such share-related securities at the initial price or rate or (in the case of an amendment to the terms of such share-related securities) the amended price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire share-related securities pursuant to the terms of such Rights at the initial price or rate or (in the case of an amendment to the terms of such rights) the amended price or rate.

Rights in respect of Shares: In the case of the issue, grant or offer of rights in respect of Shares or the amendment of the terms of any rights in respect of Shares (other than in accordance with their terms of issue):

(a) the Aggregate Consideration shall be:
(A) the consideration received by the Company for any such Rights or, as the case may be, such amendment; plus
(B) the additional consideration to be received by the Company upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Rights at the initial price or rate or (in the case of an amendment to the terms of such Rights) the amended price or rate,

the consideration in each case to be determined in the same manner as provided in conditions (Shares for cash) and conditions (Shares not for cash); and

(b) the Number of Shares shall be the number of Shares to be issued upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such rights at the initial price or rate or (in the case of an amendment to the terms of such rights) the amended price or rate.

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LETTER FROM THE BOARD

Currency translation: If any of the consideration referred to in any of the preceding paragraphs of this condition (Aggregate Consideration and Consideration per Share) is receivable in a currency other than HK$, such consideration shall be translated into HK$ for the purposes of this condition (Aggregate Consideration and Consideration per Share):

(a) in any case where there is a fixed rate of exchange between HK$ and the relevant currency for the purposes of the issue, grant or offer of the shares, share-related securities or rights, the exercise of the rights to subscribe for, purchase or otherwise acquire share-related securities pursuant to the terms of such rights or the exercise of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such rights or share-related securities, at such fixed rate of exchange; and
(b) in all other cases, at the Screen Rate on the date as of which the said consideration is required to be calculated.

Pursuant to the CN Subscription Agreement, the aforementioned adjustments are subject to the Conversion Restrictions and the compliance of the GEM Listing Rules and/or other requirements under relevant regulatory authority.

Transferability:

The Convertible Notes may be transferred or otherwise disposal of, by the Subscriber, subject to the terms and conditions of the Convertible Notes. In the event that the Noteholder transferred the Convertible Notes to a third party, such transfer shall be lodged in the record of the Company, and the Company shall issue a new certificate of the Convertible Note to the new Noteholder.

Security:

The Company shall pledge its entire stake in Spark as first priority security interest to the Subscriber.

Ranking of Conversion The Conversion Shares will rank pari passu in all respects with the Shares: Shares in issue as at the date of conversion.
Application for listing:

No application will be made for a listing of the Convertible Notes. Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares.

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LETTER FROM THE BOARD

REASONS FOR THE CN SUBSCRIPTION AND USE OF PROCEEDS

The gross proceeds from the CN Subscription will be HK$200.0 million. The estimated net proceeds from the CN Subscription after deduction of expenses, will amount to approximately HK$199.5 million, which will be used as (i) HK$180 million for the Common Shares Subscription which will be utilised as Spark’s capital expenses and working capital for the build-out and operation of over 600 EV charging sites at the gas stations of Bangchak in Thailand, with approximately 42.0%, 28.5% and 29.5% to be utilised for Tranche 1, 2 and 3 and (ii) the remaining HK$19.5 million for the general working capital of the Group which is expected to be fully utilised by December 2024. The amount of subscription of the Convertible Notes in each tranche are determined based on the Tranche 1 Milestone, Tranche 2 Milestone and Tranche 3 Milestone, which was determined with reference to the business and expansion plan of Spark. The contribution into Spark by CB Asset One shall be funded by the CN Subscription and each tranche of the Common Shares Subscription corresponds to each tranche of the CN Subscription. The determination of the interest rate was determined after arm’s length negotiations with the Subscriber with reference to the merits of the CN Subscription and the Common Shares Subscription, the current market conditions, the financial position of the Company and the benchmark interest rates of the Hong Kong Dollar Best Lending Rate quoted by The Hong Kong Shanghai Banking Cooperation Limited being at 5.625% on 20 September 2024 and the base rate as quoted by the Hong Kong Monetary Authority being at 5.25% on 19 September 2024 and other factors. While determining the Conversion Price, the Board has taken into account that the size of the principal amount, the Subscriber’s willingness to take the Company’s interest in Spark as security and the prospects of Spark and the management fee that the Company is entitled prior to Spark’s dividend distribution. After assessing the benefits of the JV Arrangement and that other investors require substantial recognised security, the Board is of the view that the discount of the Conversion Price is fair and reasonable. The Board is of the view that the interest rate and the Conversion Price and the basis of their determination is fair and reasonable, on the normal commercial terms and in the interest of the Company and its Shareholders.

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LETTER FROM THE BOARD

The Board considers that the CN Subscription represents a good opportunity to expand its business into Thailand and strengthen its EV charging presence in the Southeast Asia region. The terms of the CN Subscription (including the initial Conversion Price) was arrived after arm’s length negotiations with reference to the terms of the JV Arrangement, the prospects of expanding the Company’s business into Thailand, and the current market conditions. Given the Subscriber shall also invest into Spark together with the Company, should the JV Arrangement goes according to the proposed business plan, it represents great business opportunity and bring a new income stream to the Company. The Subscriber brings potential synergies to the Company and the CN Subscription is in the interests of the Shareholders as a whole. The JV Arrangement represents an opportunity for the Company to capture capital gain and equity in terms of the business expansion of Spark, whereas the CN Subscription shall facilitate the capital required for the investment into Spark. As the JV Arrangement requires a capital contribution of HK$180 million, the Company was able to secure financing from the Subscriber in the form of the Convertible Notes so as to capture the opportunities arising from the JV Arrangement. The Company considered other alternatives to finance the Common Shares Subscription, however only the Subscriber is willing to recognise the equity interest in Spark by CB Asset One as security and collateral to the financing, and therefore the Company is of the view that the CN Subscription represents the best option of the Company in terms of financing the the Common Shares Subscription.

HKEx B2 Q5(a) HKEx B2 Q5(b)

The Directors (including the independent non-executive Directors) consider that the terms and conditions of the CN Subscription Agreement (including the Conversion Price) were entered into on normal commercial terms and the terms therein are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Financial Effects of the Common Shares Subscription and the CN Subscription.

Upon completion of the Common Shares Subscription Agreement, the Company will, through CB Asset One, hold approximately 35.6% equity interest in Spark at a total consideration of HK$180 million and Spark will become an associate of the Group. The financial results of Spark will not be consolidated in the financial statements of the Group and will be accounted for using the equity method of accounting.

Based on the unaudited consolidated statement of assets and liabilities of the Group as at 30 June 2024 as set out in the Company’s 2024 Interim Report, following the CN Subscription, the net assets will decrease by approximately HK$0.5 million while cash and cash equivalent will increase by approximately HK$199.5 million. Upon completion of the Common Shares Subscription, there shall be no immediate effect on the assets and liabilities of the Group and the Group’s cash and cash equivalent will subsequently decrease by HK$180 million. There will be no effect on earnings upon completion of the CN Subscription and Common Shares Subscription.

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LETTER FROM THE BOARD

EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY

For illustrative purposes only, the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately upon full conversion of the Tranche 1 Convertible Note (assuming that there are no other changes to the shareholding structure of the Company from the Latest Practicable Date up to the full conversion of the Tranche 1 Convertible Note); (iii) immediately upon full conversion of the Tranche 1 Convertible Note and Tranche 2 Convertible Note (assuming that there are no other changes to the shareholding structure of the Company from the Latest Practicable Date up to the full conversion of the Tranche 1 Convertible Note and Tranche 2 Convertible Note); (iv) immediately upon full conversion of the Convertible Notes without taking into account the Conversion Restrictions (assuming that there are no other changes to the shareholding structure of the Company from the Latest Practicable Date up to the full conversion of the Convertible Notes); (v) immediately upon full conversion of the Convertible Notes subject to the Conversion Restrictions (assuming that there are no other changes to the shareholding structure of the Company from the Latest Practicable Date up to the full conversion of the Convertible Notes ; (vi) immediately after the issue of the subscription shares, according to the announcement published by the Company on 22 May 2024, assuming there will be no change in the total number of Shares in issue (other than the issue of the abovementioned subscription shares); (vii) immediately after the issue of the award shares, according to the announcement published by the Company on 28 June 2024, assuming there will be no change in the total number of Shares in issue (other than the issue of the abovementioned award shares); (viii) immediately after the issue of the emolument shares, according to the announcement published by the Company on 28 June 2024 assuming there will be no change in the total number of Shares in issue (other than the issue of the abovementioned emolument shares); (ix) immediately after the issue of the consultant shares, according to the announcement published by the Company on 28 June 2024, assuming there will be no change in the total number of Shares in issue (other than the issue of the abovementioned consultant shares); and (x) assuming all events are effective is as follows:

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LETTER FROM THE BOARD

Immediately after the Immediately after the Immediately after the Immediately after the	issue of the subscription issue of the award issue of the emolument issue of the consultant	shares, according to the shares, according to the shares, according to the shares, according to the	announcement published announcement published announcement published announcement published	Upon full conversion of Upon full conversion of by the Company on 22 by the Company on 28 by the Company on 28 by the Company on 28	the Tranche 1 the Convertible Notes at Upon full conversion of May 2024, assuming June 2024, assuming June 2024 assuming June 2024, assuming	Upon full conversion of Convertible Note and the initial Conversion the Convertible Notes at there will be no change there will be no change there will be no change there will be no change	the Tranche 1 Tranche 2 Convertible Price, without taking the initial Conversion in the total number of in the total number of in the total number of in the total number of	Convertible Note at the Note at the initial into account the Price, subject to the Shares in issue (other Shares in issue (other Shares in issue (other Shares in issue (other	initial Conversion Price Conversion Price (For Conversion Restrictions Conversion Restrictions than the issue of the than the issue of the than the issue of the than the issue of the	As at the Latest (For illustration purpose illustration (For illustration (For illustration abovementioned abovementioned award abovementioned abovementioned Assuming all events	Practicable Date only) purpose only) purpose only) purpose only) subscription shares) shares) emolument shares) consultant shares) are effective	Controlling Shareholder, Number Approx % of Number Approx % of Number Approx % of Number Approx % of Number Approx % of Number Approx % of Number Approx % of Number Approx % of Number Approx % of Number Approx % of	Substantial Shareholders and Directors of Shares shareholding of Shares shareholding of Shares shareholding of Shares shareholding of Shares shareholding of Shares shareholding of Shares shareholding of Shares shareholding of Shares shareholding of Shares shareholding	Global Fortune Global Limited_(Note 1)_ 235,603,225 24.71% 235,603,225 20.58% 235,603,225 18.89% 235,603,225 17.41% 235,603,225 18.43% 235,603,225 24.08% 235,603,225 21.99% 235,603,225 24.22% 235,603,225 24.08% 235,603,225 14.83%	Glorytwin Limited_(Note 2)_ 72,000,000 7.55% 72,000,000 6.29% 72,000,000 5.77% 72,000,000 5.32% 72,000,000 5.63% 72,000,000 7.36% 72,000,000 6.72% 72,000,000 7.40% 72,000,000 7.36% 72,000,000 4.53%	Ms. Wu Yanyan 47,550,000 4.99% 47,550,000 4.15% 47,550,000 3.81% 47,550,000 3.51% 47,550,000 3.72% 47,550,000 4.86% 47,550,000 4.44% 47,550,000 4.89% 47,550,000 4.86% 47,550,000 2.99%	Mr. Pan Wenyuan 27,096,000 2.84% 27,096,000 2.37% 27,096,000 2.17% 27,096,000 2.00% 27,096,000 2.12% 27,096,000 2.77% 27,096,000 2.53% 27,096,000 2.78% 27,096,000 2.77% 27,096,000 1.71%	Tanner Enterprises Group Limited	(Note 2) 17,392,000 1.82% 17,392,000 1.52% 17,392,000 1.39% 17,392,000 1.28% 17,392,000 1.36% 17,392,000 1.78% 17,392,000 1.62% 17,392,000 1.79% 17,392,000 1.78% 17,392,000 1.09%	Mr. Ko Shu Ki Kenneth 3,712,000 0.39% 3,712,000 0.32% 3,712,000 0.30% 3,712,000 0.27% 3,712,000 0.29% 3,712,000 0.38% 3,712,000 0.35% 3,712,000 0.38% 3,712,000 0.38% 3,712,000 0.23%	Mr. Wu Jianwei_(Note 1)_ 52,508,000 5.51% 52,508,000 4.59% 52,508,000 4.21% 52,508,000 3.88% 52,508,000 4.11% 60,844,000 6.22% 52,508,000 4.90% 52,508,000 5.40% 52,508,000 5.37% 60,844,000 3.83%	Mr. Li Man Keung Edwin_(Note 2)_ 14,712,613 1.54% 14,712,613 1.29% 14,712,613 1.18% 14,712,613 1.09% 14,712,613 1.15% 23,048,613 2.36% 14,712,613 1.37% 14,712,613 1.51% 14,712,613 1.50% 23,048,613 1.45%	Mr. Liang Zihao_(Note 1)_ 8,800,000 0.92% 8,800,000 0.77% 8,800,000 0.71% 8,800,000 0.65% 8,800,000 0.69% 17,136,000 1.75% 8,800,000 0.82% 8,800,000 0.90% 8,800,000 0.90% 17,136,000 1.08%	Mr. Yip Shiu Hong 5,997,905 0.63% 5,997,905 0.52% 5,997,905 0.48% 5,997,905 0.44% 5,997,905 0.47% 5,997,905 0.61% 51,285,905 4.79% 15,055,905 1.55% 5,997,905 0.61% 60,343,905 3.80%	Mr. Ho Karl – 0.00% – 0.00% – 0.00% – 0.00% – 0.00% – 0.00% 27,173,000 2.54% 5,797,000 0.60% – 0.00% 32,970,000 2.08%	Mr. Ng Sze Chun 2,998,953 0.31% 2,998,953 0.26% 2,998,953 0.24% 2,998,953 0.22% 2,998,953 0.23% 2,998,953 0.31% 25,642,953 2.39% 7,527,953 0.77% 2,998,953 0.31% 30,171,953 1.90%	Mr. Lau Wai Yan Lawson 22,802,703 2.39% 22,802,703 1.99% 22,802,703 1.84% 22,802,703 1.68% 22,802,703 1.78% 22,802,703 2.33% 45,446,703 4.24% 22,802,703 2.34% 22,802,703 2.33% 45,446,703 2.86%	VBG Capital Limited – 0.00% – 0.00% – 0.00% – 0.00% – 0.00% – 0.00% – 0.00% – 0.00% 25,000,000 2.55% 25,000,000 1.57%	Gaw Capital_(Note 4)_ 58,704,000 6.16% 249,904,000 21.83% 352.504,000 28.26% 458,704,000 33.89%# 383,334,000 29.99% 58,704,000 6.00% 58,704,000 5.48% 58,704,000 6.03% 58,704,000 6.00% 458,704,000 28.88%	Public 383,698,000 40.24% 383,698,000 33.52% 383,698,000 30.76% 383,698,000 28.35% 383,698,000 30.02% 383,698,000 39.21% 383,698,000 35.82% 383,698,000 39.44% 383,698,000 39.21% 431,518,000 27.16%	953,575,399 100.00% 1,144,755,399 100.00% 1,247,375,399 100.00% 1,353,575,399 100.00% 1,278,205,399 100.00% 978,583,399 100.00% 1,071,324,399 100.00% 972,959,399 100.00% 978,575,399 100.00% 1,588,536,399 100.00%

— 45 —

LETTER FROM THE BOARD

Notes:

(1) 235,603,225 Shares are held by Global Fortune Global Limited which is owned as to 51% by Mr. Wu Jianwei, the non-executive Director and Co-Chairman of the Board, and as to 49% by Mr. Liang Zihao, the executive Director and Co-Chairman of the Board.
Mr. Liang Zihao directly holds 8,800,000 Shares. The aggregate Shares beneficially owned by Mr. Liang Zihao is 244,403,225 Shares, or 25.63% of total issued Shares.
Mr. Wu Jianwei directly holds 52,508,000 Shares. The aggregate Shares beneficially owned by Mr. Wu Jianwei is 288,111,225 Shares, or 30.21% of total issued Shares.
(2) 72,000,000 Shares are held by Glorytwin Limited which is wholly owned by Mr. Li Man Keung Edwin, Executive Director and Vice Chairman of the Board. 17,392,000 are held by Tanner Enterprises Group Limited which is wholly owned by Mr. Li Man Keung Edwin. Mr. Li Man Keung Edwin also directly holds 14,712,613 Shares. The aggregate Shares beneficially owned by Mr. Li Man Keung Edwin is 104,104,613 Shares, or 10.92% of total issued Shares.
(3) Please refer to the paragraph headed “Conversion rights” in the section headed “Convertible Note” above for details of the Conversion Restrictions. Given the Conversion Restrictions, there will be no change of control of the Company on exercise of the conversion rights under the Conversion Note.
(4)&# The shareholding number and percentage stated here are for illustration purpose only. The conversion of the Convertible Notes is limited by the conversion restrictions (i.e. if the conversion by the Noteholder would trigger any mandatory offer obligation under Rule 26 of the Takeovers Code on the part of the exercising bond holders or parties acting in concert with them, or reduce the public float of the Company to less than 25% (or any given percentage as required by the GEM Listing Rules for the minimum percentage of Shares being held by the public as per Rule 11.23 of the GEM Listing Rules) of the issued Shares of the Company at the time in compliance with the GEM Listing Rules, then the conversion by the Noteholder shall be restricted until and unless the regulatory requirements under the Takeovers Code and the Listing Rules are fully complied with), such that Noteholder shall convert the Convertible Notes to an extent which would reduce the public float of the Company to below the percentage prescribed under the GEM Listing Rules, or trigger the mandatory offer obligation under the Takeovers Code on the part of the exercising Noteholder and parties acting in concert with them, until and unless the regulatory requirements under the Takeovers Code and the GEM Listing Rules are fully complied with. Subject to the Conversion Restrictions, the issue of the Conversion Shares will not result in a change of control of the Company.

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

The following is the equity fund raising activity conducted by the Company in the past 12 months immediately before the Latest Practicable Date:

Date of	Fund raising	Net proceeds	Intended use of	Actual use of net
announcement	activity	raised	net proceeds	proceeds
31 August 2023,	Issue of 100,000,000	Nil	(i) production and	Not applicable
12 September 2023,	unlisted warrants		deployment of EV
19 September 2023 and	under specific		business; (ii) the
21 September 2023	mandate		expansion of eTaxi/
			eVan business; and (iii)
			working capital
22 December 2023 and	Issue of 19,516,000	HK$16.0 million	(i) production and	Fully utilized in
26 February 2024	new Shares under		deployment of EV	accordance with
	specific mandate		business; (ii) the	the intended use
			general working capital

— 46 —

LETTER FROM THE BOARD

Date of	Fund raising	Net proceeds	Intended use of	Actual use of net
announcement	activity	raised	net proceeds	proceeds
22 May 2024	Issue of 25,008,000	Not applicable	working capital of the	Not applicable
	new Shares under		Group and for general
	specific mandate		corporate purposes
28 June 2024	Issue of 117,749,000	Not applicable	award shares for	Not applicable
	new Shares under		management
	specific mandate
28 June 2024	Issue of 19,384,000	Not applicable	emolument shares for	Not applicable
	new Shares under		C-suite
	specific mandate
28 June 2024	Issue of 25,000,000	Not applicable	consultant fee	Not applicable
	new Shares under
	specific mandate
2 August 2024	Issue of 47,820,000	HK$24.0 million	general working capital	Partially utilized in
	new shares under			accordance with
	general mandate			the intended use

GEM LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio (as defined under GEM Listing Rule 19.07) in respect of the entering into of the Common Shares Subscription Agreement constitutes a major transaction on the part of the Company and is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

As the Conversion Shares shall be allotted and issued under the Specific Mandate, the CN Subscription Agreement and the transactions contemplated thereunder shall be subject to the Shareholders’ approval in the EGM.

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Subscriber is controlled by a fund that is managed and controlled by Gaw Capital and/or its affiliates as at the Latest Practicable Date. As such, Gaw Capital, who is an existing Shareholder of the Company as of the Latest Practicable Date, is required to abstain from voting on the resolutions of approving the Common Shares Subscription Agreement (including entering into of Shareholders’ Agreement) and the CN Subscription Agreement and the transactions contemplated thereunder as it has a material interest in the transactions. Save for the above, to the best knowledge, information and belief of the Directors, as at the Latest Practicable Date, no director and no other shareholder has a material interest in the Common Shares Subscription and the CN Subscription and is required to abstain from voting at the EGM.

Application will be made by the Company to the Stock Exchange for the listing of, and the permission to deal in, the Conversion Shares.

— 47 —

LETTER FROM THE BOARD

EGM

A notice convening the EGM to be held at 21/F., Grand Millennium Plaza, 181 Queen’s Road Central, Sheung Wan, Hong Kong on Friday, 25 October 2024 at 3:00 p.m. is set out from pages EGM-1 to EGM-3 of this circular. At the EGM, ordinary resolution will be proposed to the Shareholders to consider and, if thought fit, approve (i) the Common Shares Subscription Agreement; (ii) the CN Subscription Agreement; and (iii) the Specific Mandate and the transaction contemplated thereunder.

Save as disclosed above and to the best of the knowledge, information and belief of the Directors and having making all reasonable enquiries, no other Shareholder has a material interest in (i) the Common Shares Subscription Agreement; (ii) CN Subscription Agreement; the Shareholders’ Agreement; and (iii) the Specific Mandate and the transaction contemplated thereunder. Accordingly, no other shareholder will be required to abstain from voting on the resolutions to be proposed at the EGM.

If a member of the Company (whether individual or corporate) wishes to exercise his/her/its voting rights at the EGM, he/she/it must appoint the chairman of the EGM as his/her/its proxy to attend, speak and vote on his/her/its behalf at the EGM. In appointing the chairman of the EGM as proxy, a member of the Company (whether individual or corporate) must give specific instructions as to voting in the proxy form, the duly completed and signed proxy form must be deposited together with a power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority, at the office of the Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong not later than 3:00 p.m. on Wednesday, 23 October 2024 (being not less than forty-eight (48) hours before the EGM), failing which the appointment will be treated as invalid. A form of proxy for use at the EGM is enclosed with this circular.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Tuesday, 22 October 2024 to Friday, 25 October 2024, both dates inclusive, during which period no transfer of shares will be registered, for the purpose of ascertaining Shareholders’ entitlement to attend and vote at the EGM. In order to be eligible to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged for registration with the office of the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong not later than 4:30 p.m. on Monday, 21 October 2024.

— 48 —

LETTER FROM THE BOARD

RECOMMENDATION

The Directors (including the independent non-executive Directors) are of the opinion that the terms of the Common Shares Subscription Agreement and the CN Subscription Agreement are on normal commercial terms and fair and reasonable and the establishment of JV Arrangement and the CN Subscription are in the interests of the Company and the Shareholders as a whole. The Board recommend the Shareholders to vote in favour of the resolution to approve the Common Shares Subscription Agreement and the CN Subscription Agreement and the transactions contemplated thereunder at the EGM.

WARNING OF THE RISKS OF DEALING IN THE SHARES

Shareholders and potential investors of the Company should note that the Common Shares Subscription Agreement and the CN Subscription Agreement are conditional upon fulfilment of the conditions precedent under the Common Shares Subscription Agreement and the CN Subscription Agreement. There is no assurance that the completion of the Common Shares Subscription (including the formation of the JV Arrangement) and the completion of the CN Subscription will take place or as to when it may take place. Shareholders and potential investors should therefore exercise caution when dealing in the securities of the Company.

Yours faithfully On behalf of the Board

Cornerstone Technologies Holdings Limited

LIANG Zihao

Co-Chairman and Executive Director

— 49 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The audited consolidated financial statements of the Group for each of the three years ended 31 December 2023, 2022 and 2021 and the unaudited consolidated financial statements for the six months ended 30 June 2024 of the Group together with relevant notes thereto are disclosed in the following documents which have been published on both the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.cstl.com.hk). Please refer to the hyperlinks as stated below:

Interim Report of the Company for the six months ended 30 June 2024 (pages 34 to 66): https://www1.hkexnews.hk/listedco/listconews/gem/2024/0827/2024082701658.pdf
Annual report of the Company for the year ended 31 December 2023 (pages 68 to 184): https://www1.hkexnews.hk/listedco/listconews/gem/2024/0430/2024043003198.pdf
Annual report of the Company for the year ended 31 December 2022 (pages 72 to 179): https://www1.hkexnews.hk/listedco/listconews/gem/2023/0331/2023033103715.pdf
Annual report of the Company for the year ended 31 December 2021 (pages 60 to 164): https://www1.hkexnews.hk/listedco/listconews/gem/2022/0401/2022040100120.pdf

2. STATEMENT OF INDEBTEDNESS

As at the close of business on 31 August 2024, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the details of the Group’s indebtedness were as follows:

Bank borrowings

At the close of business on 31 August 2024, the Group did not have any outstanding bank borrowings 10 out of 16 bank confirmations sent to the banks have been received as at 27 September 2024.

Other borrowings

At the close of business on 31 August 2024, the Group had outstanding other borrowings of approximately HK$58.0 million drawn under the green loan facility of HK$155.6 million provided by Asian Structured Private Credit Fund 2022, LP. The other borrowings are unguaranteed and secured by equity interests and bank balances of certain of the Company’s subsidiaries.

Lease liabilities

At the close of business on 31 August 2024, the Group had outstanding lease liabilities of approximately HK$6.3 million, which were unsecured and unguaranteed.

— I-1 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Amount due to a former Director

At the close of business on 31 August 2024, the Group had an outstanding amount due to a former Director of approximately HK$0.5 million, which was unsecured and unguaranteed.

Contingent liabilities

At the close of business on 31 August 2024, the Group had no material contingent liabilities.

Save as aforesaid, and apart from intra-group liabilities and normal trade payables in the normal course of business, at the close of business on 31 August 2024, the Group did not have any other loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

The Directors confirm there are no material adverse change in the Group’s indebtedness position and contingent liabilities since 31 August 2024.

3. WORKING CAPITAL

The Directors are of the opinion that, in the absence of unforeseeable circumstances and after taking into account the Group’s internal resources and available credit facilities and the effect of the Common Shares Subscription, the Group has sufficient working capital for its requirements for at least twelve months from the date of this circular.

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirm there is not any material adverse changes in the financial or trading position of the Group since 31 December 2023 (being the date to which the latest published audited consolidated financial statements of the Group were made up).

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

Reference is made to the 2024 Interim Report, which sets out the financial information of the Group for the six months ended 30 June 2024 (the “ Period ”)

The Group’s revenue increased by approximately HK$26.6 million or 104.3%, from approximately HK$25.5 million for the six months ended 30 June 2023 to approximately HK$52.1 million for the Period. The increase in revenue was the result of significant increases from all service categories and was mainly driven by an increase in provision of installation service income of approximately HK$15.5 million and EV Charging income of approximately HK$7.1 million. The Group recorded a gross profit of approximately HK$7.3 million (2023: approximately HK$4.2 million) and a gross profit margin of approximately 14.1% for the Period including loss from discontinued operation (2023: approximately 16.5%). The decrease in gross profit margin was mainly due to an increase in revenue contribution from provision of installation service income, which relatively generates lower margins.

— I-2 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As disclosed in the section headed “Management Discussion and Analysis” of the 2024 Interim Report, the first half of 2024 was a period filled with an ever-rising number of electric vehicle (“EV”) on the road, alongside Cornerstone’s expansion in Hong Kong and beyond to South East Asian countries. Aligned with previous trends, automakers’ constant investment in EV technology and the increase in variations of EV models has surged consumer demand for EVs, further propelling EV charging stations around the globe. Specifically in Hong Kong, 75% of first registered vehicles in the first six months of 2024 were electric. The government of Hong Kong continues to implement policies and protocols to aid in the growth of the EV industry, striving towards “Zero carbon emissions, Clean air, Smart city”. Above has allowed Cornerstone to expand operations in residential car parks and membership subscriptions through Cornerstone HOME and GO initiatives. Cornerstone continues to aim to solidify its position as a leading player in the EV charging industry by leveraging emerging opportunities and are focused on optimizing our revenue generation models and expanding our market reach continuously striving to be a market leader.

— I-3 —

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(I) Directors’ and Chief Executives’ Interests and/or Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation

As at Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the “SFO”)), which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO; or (b) pursuant to Section 352 of the SFO, to be recorded in the register referred therein; or (c) pursuant to Rule 5.46 of the GEM Listing Rules to be notified to the Company and the Stock Exchange, were as follows:

Long position in shares or underlying shares of the Company

		Number
		of shares or	Percentage
		underlying	of issued
Name of Director	Capacity	shares held	share capital
Mr. Wu Jianwei	Beneficial owner/Interest of	288,111,225	30.21%
(“Mr. Wu”)(Note 1)	controlled corporation
	Beneficial owner	10,400,000	1.09%
		(Note 5)
Mr. Liang Zihao	Beneficial owner/Interest of	244,403,225	25.63%
(“Mr. Liang”)(Note 2)	controlled corporation
	Beneficial owner	10,400,000	1.09%
		(Note 5)

— II-1 —

GENERAL INFORMATION

APPENDIX II

		Number
		of shares or	Percentage
		underlying	of issued
Name of Director	Capacity	shares held	share capital
Mr. Pan Wenyuan	Interest of controlled	27,096,000	2.84%
(“Mr. Pan”)(Note 3)	corporation
	Beneficial owner	6,000,000	0.63%
		(Note 5)
Mr. Li Man Keung Edwin	Beneficial owner/Interest of	104,104,613	10.92%
(“Mr. Li”)(Note 4)	controlled corporation
	Beneficial owner	10,400,000	1.09%
		(Note 5)
Ms. Wu Yanyan	Beneficial owner	47,550,000	4.99%
	Beneficial owner	6,000,000	0.63%
		(Note 5)
Mr. Ko Shu Ki Kenneth	Beneficial owner	3,712,000	0.39%
	Beneficial owner	600,000	0.06%
		(Note 5)
Mr. Sam Weng Wa Michael	Beneficial owner	6,440,000	0.68%
		(Note 5)
Mr. Yip Shiu Hong	Beneficial owner	5,997,905	0.63%
Mr. Tam Ka Hei Raymond	Beneficial owner	1,040,000	0.11%
		(Note 5)
Mr. Yuen Chun Fai	Beneficial owner	1,040,000	0.11%
		(Note 5)
Ms. Zhu Xiaohui	Beneficial owner	1,040,000	0.11%
		(Note 5)

Notes:

Mr. Wu owns 51% of the issued share capital of Global Fortune Global Limited (“ Global Fortune ”). Mr. Wu is deemed to be interested in the Shares in which Global Fortune is interested under the SFO.
Mr. Liang owns 49% of the issued share capital of Global Fortune. Mr. Liang is deemed to be interested in the Shares in which Global Fortune is interested under the SFO.

— II-2 —

GENERAL INFORMATION

APPENDIX II

Mr. Pan owns 100% of the issued share capital of Silver Rocket Limited (“ Silver Rocket ”). Mr. Pan is deemed to be interested in the Shares in which Silver Rocket is interested under SFO.
Mr. Li owns 100% of the issued share capital of Tanner Enterprises Group Limited (“ Tanner Enterprises ”) and 100% of the issued share capital of Glorytwin Limited (“ Glorytwin ”). Mr. Li is deemed to be interested in the Shares in which Tanner Enterprises and Glorytwin are interested under the SFO.
These shares were the shares which would be allotted and issued upon exercise in full of the share options granted to such Director under the share option scheme of the Company.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest or short position in Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which was required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO; or (b) pursuant to Section 352 of the SFO, to be recorded in the register referred therein; or (c) pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules to be notified to the Company and the Stock Exchange.

(II) Substantial Shareholders’ Interests and Short Positions in Shares and Underlying Shares of the Company

As at Latest Practicable Date, the interests and short positions of the substantial shareholders of the Company (other than the Directors and chief executives of the Company) in the shares and underlying shares of the Company which were required to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were required, pursuant to Section 336 of the SFO, to be entered in the register to therein, were as follows:

		Number of
		Shares or	Percentage
Name of substantial		underlying	of issued
shareholders	Capacity	Shares held	share capital
Global Fortune	Beneficial owner	235,603,225	24.71%
		(Note 1)
Tanner Enterprises	Beneficial owner/Interest of	89,392,000	9.37%
	controlled corporation	(Note 2)
Glorytwin	Beneficial owner	72,000,000	7.55%
		(Note 2)

— II-3 —

GENERAL INFORMATION

APPENDIX II

		Number of
		Shares or	Percentage
Name of substantial		underlying	of issued
shareholders	Capacity	Shares held	share capital
AASPCF2022 GP, LP	General Partner	100,000,000	10.49%
		(Note 3)
Abax Asian Structured	Beneficial owner	100,000,000	10.49%
Private Credit Fund		(Note 3)
2022, LP
Abax Global Capital	Interest of controlled	100,000,000	10.49%
	corporation	(Note 3)
Abax Global Capital GP	General Partner	100,000,000	10.49%
2022 Ltd.		(Note 3)
Yang Xiang Dong	Interest of controlled	100,000,000	10.49%
	corporation	(Note 3)
Gateway Capital	Investment manager	79,704,000	8.36%
(Hong Kong) Limited		(Note 4)
Gaw Growth Equity	Interest of controlled	79,704,000	8.36%
Fund I GP Limited	corporation	(Note 4)
Gaw Growth Equity	Interest of controlled	79,704,000	8.36%
Fund I, LPF	corporation	(Note 4)
Steady Flake Limited	Beneficial owner	79,704,000	8.36%
		(Note 4)

Notes:

Global Fortune is legally and beneficially owned as to 51% and 49% by Mr. Wu and Mr. Liang Zihao respectively. Therefore, by virtue of the SFO, Mr. Wu and Mr. Liang Zihao are deemed to be interested in all the Shares held by Global Fortune.
Glorytwin is legally and beneficially owned as to 100% by Tanner Enterprises. Therefore, by virtue of the SFO, Tanner Enterprises is deemed to be interested in all the Shares held by Glorytwin.

— II-4 —

GENERAL INFORMATION

APPENDIX II

100,000,000 Shares of which represent the Shares which would be allotted and issue upon exercise in full of the warrants granted by the Company. Based on the notice of disclosure of interest filed by each of AASPCF2022 GP, LP, Abax Asian Structured Private Credit Fund 2022, LP, Abax Global Capital, Abax Global Capital GP 2022 Ltd. and Yang Xiang Dong, the 100,000,000 shares were held by Abax Asian Structured Private Credit Fund 2022, LP (“ Abax Asian ”). AASPCF2022 GP, LP (“ AAS ”) is acting as general partner of Abax Asian. Abax Global Capital GP 2022 Ltd.is acting as general partner of AAS. Abax Global Capital GP 2022 Ltd. is wholly owned by Abax Global Capital, which was owned as to 59.8% by Yang Xiang Dong. Therefore, by virtue of the SFO, each of AAS, Abax Global Capital GP 2022 Ltd., Abax Global Capital and Yang Xiang Dong was deemed to be interested in the 100,000,000 shares held by Abax Asian.
21,000,000 Shares of which represent the Shares which would be allotted and issued upon exercise in full of the warrants granted by the Company.

Save as disclosed above, as at Latest Practicable Date, the Directors were not aware of any other persons/entities (other than the Directors and chief executives of the Company) who had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or which were recorded in the register required to be kept by the Company under Section 336 of the SFO.

3. COMPETING INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS

As at the Latest Practicable Date, the Company did not have any controlling Shareholder and so far as the Directors are aware, none of the Directors or any of their respective associate(s) had any interest in a business which causes or may cause, either directly or indirectly, any significant competition with the business of the Group.

4. DIRECTORS’ SERVICE CONTRACTS

Each of the executive Directors has entered into a service contract with the Company for a term of three years, which are determinable by not less than three months’ notice in writing served by either party on the other and is subject to termination provisions therein and in the Articles.

Pursuant to the letters of appointment between the Company and the independent non-executive Directors, the independent non-executive Directors have been appointed for a term of three years, which are determinable by either party by giving three months’ written notice.

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group (excluding contracts expiring or determinable by the Group within one year without payment of compensation, other than statutory compensation).

— II-5 —

GENERAL INFORMATION

APPENDIX II

5. DIRECTORS’ INTEREST IN ASSETS, CONTRACTS AND ARRANGEMENTS

None of the Directors had any direct or indirect interest in any assets which had been, since 31 December 2023 (being the date to which the latest published audited consolidated financial statements of the Group were made up), acquired, disposed of by, or leased to, or were proposed to be acquired, disposed of by, or leased to any member of the Group; and none of the Directors was materially interested in any contract or arrangement subsisting as at the date of this circular which is significant in relation to the business of the Group.

6. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or claims of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

7. MATERIAL CONTRACTS

Save as disclosed below, there are no material contracts (not being contracts entered into in the ordinary course of business) which have been entered into by any member of the Group within the two years immediately preceding the date of this circular:

The Group has entered into the following contracts (not being contracts entered into in the ordinary course of business) within the two years immediately preceding the date of this circular which is or may be material:

(a) a subscription agreement dated 7 December 2022 entered into between the Company as issuer and Mr. Wu Jianwei, Ms. Wu Yanyan, Mr. Liang Zihao and Mr. Li Man Keung Edwin as subscribers, pursuant to which Mr. Wu Jianwei, Ms. Wu Yanyan, Mr. Liang Zihao and Mr. Li Man Keung Edwin have conditionally agreed to subscribe for, and the Company has conditionally agreed to issue and allot, an aggregate of 35,200,000 new shares at the subscription price of HK$1.144 per subscription share;
(b) a sale and purchase agreement dated 15 August 2023 entered into between the Company as seller and Castle Noble International Limited as purchaser, pursuant to which the Company has conditionally agreed to sell, and Castle Noble International Limited has conditionally agreed to purchase the Sale Shares, representing 100% equity interest of the Target Companies, at an aggregate consideration of HK$1.00;
(c) a green facility agreement dated 31 August 2023 entered into between the Company as borrower and Abax Asian Structured Private Credit Fund 2022, LP as lender, the Guarantors, Abax as the arranger, the Agent and the Green Loan Advisor, SERICA AGENCY LIMITED as the Security Agent and the Custodian, and the Administrative Parties, pursuant to which Abax Asian Structured Private Credit Fund 2022, LP agreed to grant a secured green term loan facility in an aggregate amount of up to US$20 million to the Company;

— II-6 —

GENERAL INFORMATION

APPENDIX II

(d) a warrant subscription agreement dated 31 August 2023 entered into between the Company as issuer and Abax Asian Structured Private Credit Fund 2022, LP as subscriber, pursuant to which the Company agreed to issue to Steady Flake Limited an aggregate of 100,000,000 warrants to subscribe for an aggregate of 100,000,000 shares at the initial price of HK$0.80 per share.
(e) a subscription agreement dated 22 December 2023 entered into between the Company as issuer and Mr. Wu Jianwei as subscriber, pursuant to which Mr. Wu Jianwei has conditionally agreed to subscribe for, and the Company has conditionally agreed to issue and allot, an aggregate of 19,516,000 new shares at the subscription price of HK$0.82 per subscription share;
(f) a subscription agreement dated 22 May 2024 entered into between the Company as issuer and Mr. Wu Jianwei, Mr. Liang Zihao and Mr. Li Man Keung Edwin as subscribers, pursuant to which Mr. Wu Jianwei, Mr. Liang Zihao and Mr. Li Man Keung Edwin have conditionally agreed to subscribe for, and the Company has conditionally agreed to issue and allot, an aggregate of 25,008,000 new shares at the subscription price of HK$0.64 per subscription share;
(g) a service agreement dated 28 June 2024 entered into between the Company as issuer and VBG Capital Limited as service provider, pursuant to which VBG Capital shall provide financial advisory services for a period of five years commencing on the date of the service agreement and, the Company has agreed conditionally to allot and issue a total of 25,000,000 shares to the;
(h) a placing agreement dated 2 August 2024 entered into between the Company as issuer and with VBG Capital Limited as placing agent pursuant to which the Company has conditionally agreed to place through the placing agent, on a best effort basis, a maximum of 65,000,000 shares at the price of HK$0.53 per share to not less than six Placees who and whose beneficial owners shall be Independent Third Parties.

8. DOCUMENTS ON DISPLAY

Copies of the following documents will be displayed on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (www.cstl.com.hk) for a period of 14 days from the date of this circular:

(a) the letter from the Board, the text of which is set out from pages 6 to 49 of this circular;
(b) the announcement of the Company published on 20 September 2024;
(c) the Common Shares Subscription Agreement
(d) the CN Subscription Agreement; and
(e) this circular.

— II-7 —

GENERAL INFORMATION

APPENDIX II

9. MISCELLANEOUS

(a) The company secretary of the Company is Mr. Chu Pui Ki Dickson. He is a member of Hong Kong Institute of Certified Public Accountants
(b) The audit committee of the Company comprises of Mr. Yuen Chun Fai, Mr. Tam Ka Hei and Ms. Zhu Xiaohui. Set out below are their biographical details:

Mr. Yuen Chun Fai

Mr. Yuen Chun Fai (“ Mr. Yuen ”), aged 45, obtained his bachelor of science in accounting and finance from The London School of Economics and Political Science in 2002. Mr. Yuen is a fellow of the Association of Chartered Certified Accountants and also a certified public accountant of the Hong Kong Institute of Certified Public Accountants. He has over 16 years’ experiences in the field of financial reporting, financial management and audit in Hong Kong, China, Malaysia and Singapore. Mr. Yuen is currently the company secretary and compliance officer of Edvance International Holdings Limited (Stock Code: 1410), a company whose shares are listed on the main board of the Stock Exchange. Mr. Yuen has also been appointed as an independent nonexecutive director of Hong Kong Education (Int’l) Investments Limited (now known as Bradaverse Education (Int’l) Investments Group Limited) (Stock Code: 1082), a company whose shares are listed on the main board of the Stock Exchange, since February 2022. Mr. Yuen was an executive director, the company secretary and the compliance officer of WLS Holdings Limited (Stock Code: 8021), a company whose shares are listed on the GEM of the Stock Exchange from August 2015 to August 2020.

Mr. Tam Ka Hei Raymond

Mr. Tam Ka Hei Raymond (“ Mr. Tam ”), aged 44, obtained his bachelor of arts degree in Accounting and Finance with Computing from University of Kent, the United Kingdom in July 2002. Mr. Tam has over 12 years of experience in corporate finance. He is currently a director of the corporate finance department at Yu Ming Investment Management Limited, a wholly-owned subsidiary of Da Yu Financial Holdings Limited (which is listed on the Main Board of the Stock Exchange) (Stock code: 1073) and a licensed holder to carry on Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO. Mr. Tam has also been appointed as an independent non-executive director of TIL Enviro Limited, a company listed on the Main Board of the Stock Exchange (Stock Code: 1790) since 4 October 2018 and an independent nonexecutive director of Grand Power Logistics Group Limited, a company listed on GEM of the Stock Exchange (Stock Code: 8489) since 11 December 2020.

— II-8 —

GENERAL INFORMATION

APPENDIX II

Ms. Zhu Xiaohui

Ms. Zhu Xiaohui (“ Ms. Zhu ”), aged 29, obtained her bachelor in chemistry and business studies from the University of Warwick in 2016. She worked in a raw material planning and supply chain management role at SABIC Innovative Plastics (China) Co., Ltd from 2017 to 2018. Since 2018, Ms. Zhu works in a product supply management position in Infinitus (China) Company Limited.

— II-9 —

NOTICE OF EGM

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)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (“ EGM ”) of Cornerstone Technologies Holdings Limited (the “ Company ”) will be held at 21/F., Grand Millennium Plaza, 181 Queen’s Road Central, Sheung Wan, Hong Kong on Friday, 25 October 2024 at 3:00 p.m. for the following purposes. Unless otherwise indicated, capitalized terms used herein shall have the same meanings as those defined in the circular of the Company dated 4 October 2024 (the “ Circular ”).

ORDINARY RESOLUTION

To consider and, if thought fit, pass with or without amendments the following resolution as ordinary resolutions:

“ THAT
(a) the subscription agreement dated 20 September 2024 (the “ Common Shares Subscription Agreement ”) entered into be into between the Company and Spark EV Company Limited (“ Spark ”) (a copy of the Common Shares Subscription Agreement has been produced to the meeting and marked “ A ” and initialed by the chairman of the meeting for identification purpose) in relation to the subscription of the common shares in Spark and the transaction contemplated thereunder (including the formation of joint venture between the Company, EV Verse Company Limited and Floryn Passie Limited (the “ Subscriber ”) upon completion) be and are hereby approved, confirmed and ratified;
(b) the subscription agreement dated 20 September 2024 (the “ CN Subscription Agreement ”) entered into between the Company and the Subscriber (a copy of the CN Subscription Agreement has been produced to the meeting and marked “ B ” and initialed by the chairman of the meeting for identification purpose) in relation to the subscription of the convertible notes in the aggregate principal amount of HK$200 million to be issued in three tranches (the “ Convertible Notes ”) and the transaction contemplated (including but not limited to the issue of the Convertible Notes and the allotment and issue of the conversion shares (the “ Conversion Shares ”) under specific mandate upon exercise of conversion rights attaching to the Convertible Notes) thereunder be and are hereby approved, confirmed and ratified;

— EGM-1 —

NOTICE OF EGM

(c) conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) granting and not having withdrawn or revoked the approval for the listing of, and permission to deal in the Conversion Shares, the directors of the Company (the “ Directors ”) be and are hereby granted a specific mandate to allot and issue the Conversion Shares in accordance with the terms of the CN Subscription Agreement, provided that this specific mandate shall be in addition to, and shall not prejudice nor revoke any existing or such other general or specific mandates which may from time to time be granted to the Directors prior to the passing of this resolution; and
(d) any one of the Directors be and is hereby authorised to take any action and execute such other documents as he/she considers necessary, desirable or expedient to carry out or give effect to or otherwise in connection with the Common Shares Subscription Agreement and the CN Subscription Agreement and the transaction contemplated thereunder, including, without limitation, the allotment and issue of the Conversion Shares under the relevant specific mandate.”

By Order of the Board Cornerstone Technologies Holdings Limited LIANG Zihao

Co-Chairman and Executive Director

Hong Kong, 4 October 2024

Registered Office:

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Office Units 1107-11 11th Floor New East Ocean Centre No. 9 Science Museum Road Kowloon, Hong Kong

— EGM-2 —

NOTICE OF EGM

As at the date of this notice, the Directors are as follows:

Executive Directors: Mr. Liang Zihao (Co-Chairman) Mr. Li Man Keung Edwin (Vice Chairman) Mr. Sam Weng Wa Michael Mr. Pan Wenyuan Ms. Wu Yanyan Mr. Yip Shiu Hong Non-executive Director: Mr. Wu Jianwei (Co-Chairman) Independent Non-Executive Directors: Mr. Tam Ka Hei Raymond Mr. Yuen Chun Fai Ms. Zhu Xiaohui Mr. Ko Shu Ki Kenneth

Notes:

A member entitled to attend and vote at the EGM (or at any adjournment thereof) is entitled to appoint one or (if he holds two or more shares) more proxies to attend and vote in his stead. A proxy need not be a member of the Company.
The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing, or if the appointer is a corporation, either under its seal or under the hand of an officer, attorney or other person duly authorised to sign the same.
Where there are joint registered holders of any shares, any one of such persons may vote at the EGM (or at any adjournment thereof), either personally or by proxy, in respect of such shares as if he were solely entitled thereto; but if more than one of such joint holders be present at the EGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.
In order to be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority (such certification to be made by either a notary public or a solicitor qualified to practise in Hong Kong), must be deposited with the branch share registrar and transfer office of the Company in Hong Kong, Tricor Investor Services Limited, 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, not less than 48 hours before the time fixed for holding the EGM (i.e. not later than 3:00 p.m. on Wednesday, 23 October 2024) or any adjournment thereof.
For determining the entitlement to attend and vote at the EGM, the register of members of the Company will be closed from 22 October 2024 to 25 October 2024 both dates inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the EGM, unregistered holders of shares shall ensure that all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration not later than 4:30 p.m. on Monday, 21 October 2024.
Completion and return of the form of proxy will not preclude a member from attending and voting in person at the EGM or any adjourned meeting (as the case may be) should he so wish and in such event, the proxy form previously served will be deemed to be revoked.
In compliance with the GEM Listing Rules, the resolution to be proposed at the EGM will be voted by way of poll.
The translation into Chinese language of this notice is for reference only. In case of any inconsistency, the English version shall prevail.
If a tropical cyclone warning signal No.8 or above is hoisted or “extreme conditions” caused by super typhoons or a black rainstorm warning signal is in force at any time after 1:00 p.m. on the date of the EGM, the EGM will be postponed. The Company will post an announcement on the respective websites of the Hong Kong Exchanges and Clearing Limited and the Company to notify members of the date, time and venue of the rescheduled meeting.

— EGM-3 —

AI assistant

Cornerstone Technologies Holdings Limited — Proxy Solicitation & Information Statement 2024

51420_rns_2024-10-04_c8aec8fa-e6dd-452e-8e62-edfbb84bc921.pdf

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

(1) MAJOR TRANSACTION SUBSCRIPTION OF COMMON SHARES IN THAILAND COMPANY;

(2) SUBSCRIPTION OF CONVERTIBLE NOTES UNDER SPECIFIC MANDATE; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

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

(1) MAJOR TRANSACTION SUBSCRIPTION OF COMMON SHARES IN THAILAND COMPANY;

(2) SUBSCRIPTION OF CONVERTIBLE NOTES UNDER SPECIFIC MANDATE; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

THE COMMON SHARES SUBSCRIPTION AGREEMENT

JV Arrangement

LETTER FROM THE BOARD

Condition precedent

Tranche 1 Common Shares

Tranche 2 Common Shares

LETTER FROM THE BOARD

Tranche 3 Common Shares

Exclusive Management Services

Equity transfer

INFORMATION ON THE PARTIES TO THE JV ARRANGEMENT

The Company and CB Asset One

The Subscriber

EV Verse

Spark

Financial Information of Spark

REASONS FOR AND BENEFITS OF ENTERING INTO THE COMMON SHARES SUBSCRIPTION AGREEMENT

LETTER FROM THE BOARD

LETTER FROM THE BOARD

SUBSCRIPTION OF CONVERTIBLE NOTES UNDER SPECIFIC MANDATE

LETTER FROM THE BOARD

CN Subscription

Conditions Precedent

Tranche 1 Convertible Notes

LETTER FROM THE BOARD

Tranche 2 Convertible Notes

Tranche 3 Convertible Notes

Completion

Principal terms of the Convertible Notes

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Tranche 1 Convertible Note:

Tranche 2 Convertible Note:

Tranche 3 Convertible Note:

LETTER FROM THE BOARD

Distributions

LETTER FROM THE BOARD

Bonus Issues

Alteration to Nominal Value

Shares, Rights and Share-Related Securities Issued to Shareholders

LETTER FROM THE BOARD

Issues of Other Securities to Shareholders

LETTER FROM THE BOARD

Issues of Shares at Below Current Market Price

Share-Related Securities Issued Other than to Shareholders

LETTER FROM THE BOARD

Amendment of Terms of Rights or Share-Related Securities

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Demerger

LETTER FROM THE BOARD

Other Events; Contemporaneous Events

LETTER FROM THE BOARD

General Provisions regarding Adjustments

Retroactive Adjustments

LETTER FROM THE BOARD

Aggregate Consideration and Consideration per Share

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

REASONS FOR THE CN SUBSCRIPTION AND USE OF PROCEEDS

LETTER FROM THE BOARD

Financial Effects of the Common Shares Subscription and the CN Subscription.

EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY

Cornerstone Technologies Holdings Limited Proxy Solicitation & Information Statement 2024