Crypto Flow Technology Limited — Capital/Financing Update 2021

Mar 31, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this joint announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this joint announcement.

This joint announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Loto Interactive Limited nor shall there be any sale, purchase or subscription for securities of Loto Interactive Limited in any jurisdiction in which such offer, solicitation or sale would be unlawful absent the filing of a registration statement or the availability of an applicable exemption from registration or other waiver. This joint announcement is not for release, publication or distribution in or into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.

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500.com Limited (Incorporated in the Cayman Islands with limited liability) (NYSE stock code: WBAI)

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Loto Interactive Limited (Incorporated in the Cayman Islands with limited liability) (Stock Exchange Stock Code: 8198)

JOINT ANNOUNCEMENT

(1) COMPLETION OF SHARE SUBSCRIPTION OF THE SUBSCRIPTION SHARES UNDER SPECIFIC MANDATE; (2) COMPLETION OF MAJOR TRANSACTION RELATING TO THE ACQUISITION OF THE REMAINING 49% EQUITY INTEREST OF THE TARGET; AND

(3) UNCONDITIONAL MANDATORY CASH OFFERS BY BOCOM INTERNATIONAL SECURITIES LIMITED FOR AND ON BEHALF OF THE OFFEROR TO ACQUIRE ALL THE ISSUED SHARES OF, AND CANCEL ALL OUTSTANDING OPTIONS OF, LOTO INTERACTIVE LIMITED

(OTHER THAN THOSE ALREADY OWNED BY OR AGREED TO BE ACQUIRED BY THE OFFEROR AND THE PARTIES ACTING IN CONCERT WITH IT)

Financial adviser to the Offeror

Independent Financial Adviser to the Listing Rules Independent Board Committee and the Takeovers Code Independent Board Committee

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References are made to (i) the announcements dated 28 January 2021, the supplemental announcement dated 11 February 2021 and the monthly update announcements dated 26 February 2021 and 29 March 2021 jointly published by the Company and the Offeror; and (ii) the circular of the Company dated 11 March 2021 (the “ Circular ”). Unless otherwise defined, capitalised terms used in this joint announcement shall have the same meanings as defined in the Circular.

COMPLETION OF (I) SHARE SUBSCRIPTION OF THE SUBSCRIPTION SHARES UNDER SPECIFIC MANDATE; AND (II) MAJOR TRANSACTION RELATING TO THE ACQUISITION OF THE REMAINING 49% EQUITY INTEREST OF THE TARGET

The Company is pleased to announce that:

• (i) all of the conditions precedent to the Acquisition Completion as set out in the Acquisition Agreement have been satisfied, and the Acquisition Completion took place on 31 March 2021; and

• (ii) all of the conditions precedent to the Subscription Completion as set out in the Subscription Agreement have been satisfied; and the Subscription Completion took place on 31 March 2021.

Following the Acquisition Completion, the Target has become an indirect wholly-owned subsidiary of the Company and its financial results, assets and liabilities of will continue to be consolidated in the consolidated financial statements of the Group.

Pursuant to the Subscription Agreement, the Company has allotted and issued, and the Subscriber has subscribed for an aggregate of 169,354,839 Subscription Shares at the Subscription Price of HK$0.62 per Subscription Share for a total cash consideration of HK$105 million. The 169,354,839 Subscription Shares represent (i) approximately 44.7% of the total number of issued Shares immediately prior to the Subscription Completion; and (ii) approximately 30.9% of the of the total number of issued Shares as enlarged by the allotment and issuance of the Subscription Shares.

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Effect of the Subscription Completion on the shareholding structure of the Company

The following table sets out the shareholding structure of the Company (i) immediately prior to the Subscription Completion; and (ii) immediately following the Subscription Completion and as at the date of this joint announcement:

				Immediately upon Subscription	Immediately upon Subscription	Immediately upon Subscription
	Immediately	prior to the		Completion and	as at the date
Shareholders	Subscription	Completion		of this joint announcement
	Number of	(approximately)		Number of	(approximately)
	Shares		%	Shares		%
The Offeror and parties acting
in concert with it
The Offeror	127,871,432		33.74	297,226,271		54.20
Ms. Zhang Jing	137,200		0.04	137,200		0.03
Mr. Yan Hao	–		–	–		–
Ms. Huang Lilan	–		–	–		–
Mr. Yuan Qiang	–		–	–		–
Mr. Law	184,000		0.05	184,000		0.03
Independent non-executive
Directors
Dr. Lu Haitian	–		–	–		–
Mr. Lin Sen	–		–	–		–
Mr. Huang Jian	–		–	–		–
Individual Shareholders under
the Irrevocable Undertakings
(other than the parties acting
in concert with the Offeror)
Ms. Mak Lam	15,160,000		4.00	15,160,000		2.76
Mr. Li Qi	15,160,000		4.00	15,160,000		2.76
Mr. Mei Siyuan	6,316,000		1.67	6,316,000		1.15
Other public Shareholders	214,195,351		56.51	214,195,351		39.06
Total	379,023,983		100.00	548,378,822	100.00

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Notes:

• (i) Given each of Ms. Zhang Jing, Ms. Huang Lilan and Mr. Yuan Qiang holds positions in the Subscriber and that Mr. Yan Hao is an executive Directors of the Company who has a close working relationship with the aforementioned Directors and is privy to the discussion and negotiation of the Subscription with the Offeror, they are presumed to be parties acting in concert with the Offeror.

• (ii) Mr. Law is a substantial shareholder of the Offeror, the former director, chairman and chief executive officer of the Offeror and is a party acting in concert with the Offeror.

• (iii) Certain percentage figures included in this table have been subject to rounding adjustments. Figures shown as totals may not be an arithmetic aggregation of the figures preceding them.

UNCONDITIONAL MANDATORY CASH OFFERS

Following the Subscription Completion and as at the date of this joint announcement, the Offeror and parties acting in concert with it (including Mr. Law, Ms. Zhang Jing, Ms. Huang Lilan, Mr. Yuan Qiang and Mr. Yan Hao) are interested in a total of 297,547,471 Shares, representing approximately 54.26% of the enlarged issued share capital of the Company.

Pursuant to Rule 26.1 and Rule 13.5 of the Takeovers Code, the Offeror is required to make the Share Offer to acquire all the Offer Shares and the Option Offer to cancel all the Options, and BOCOM Securities will, on behalf of the Offeror, make the Offers.

Further, as disclosed in the joint announcement issued by the Offeror and the Company on 26 February 2021, the Executive has granted its consent for an extension of time for the despatch of the Composite Document to a date falling on or before 16 April 2021. As at the date of this joint announcement, the Offeror and the Company are still in the course of preparing and finalizing certain information to be included in the Composite Document (including but not limited to the information associated with the annual results of the Company for the year ended 31 December 2020 (the “ Annual Results ”), the letter of advice from the Independent Financial Adviser taking into account the Annual Results, and the statement on the Company’s indebtedness).

The Offeror and the Company currently expect to despatch the Composite on or before 16 April 2021. Further announcement(s) will be made by the Offeror and/or the Company in accordance with the GEM Listing Rules and the Takeovers Code (as the case may be) on the progress and material developments on the progress of the despatch of the Composite Document as and when appropriate.

Irrevocable Undertakings in relation to the Offers

As at the date of this joint announcement, each of (i) the executive and non-executive Directors (being Ms. Zhang Jing, Mr. Yan Hao, Ms. Huang Lilan and Mr. Yuan Qiang), (ii) Mr. Law, a party acting in concert with the Offeror, and (iii) three individual Shareholders (including Ms. Mak Lam, Mr. Li Qi and Mr. Mei Siyuan) has executed the Irrevocable Undertakings pursuant to which each of them has irrevocably undertaken not to accept the Share Offer or the Option Offer (as applicable) and he/she will not or/ and will procure not to sell, transfer or dispose of any Shares or Options held by each of them or rights to such Shares or Options to third parties prior to completion, termination or withdrawal of the Offers. Accordingly, a total of 36,957,200 Shares and 15,066,800 Options are subject to the Irrevocable Undertakings.

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The Irrevocable Undertakings shall cease to be binding upon the earliest of (i) the date when the Offers close for acceptances; (ii) the date when the Offers lapse; (iii) the time when the Offeror announces that the Offers will not proceed; (iv) the date when the Offers are withdrawn in the circumstances permitted under the Takeovers Code; (v) the date when the Offer Period ends; or (vi) when an offer with a higher offer price is made. The aforementioned circumstances are the only instances under which the Irrevocable Undertakings shall cease to be binding.

SHAREHOLDERS, OPTIONHOLDERS AND POTENTIAL INVESTORS OF THE COMPANY SHALL EXERCISE EXTREME CAUTION WHEN DEALING IN THE RELEVANT SECURITIES OF THE COMPANY. PERSONS WHO ARE IN DOUBT AS TO THE ACTION THEY SHOULD TAKE SHOULD CONSULT A LICENSED SECURITIES DEALER OR REGISTERED INSTITUTION IN SECURITIES, BANK MANAGER, SOLICITOR, PROFESSIONAL ACCOUNTANT OR OTHER PROFESSIONAL ADVISERS.

By order of the board of directors By order of the Board of 500.com Limited Loto Interactive Limited Wu Shengwu Yan Hao Director Chief Executive Officer and Executive Director

Hong Kong, 31 March 2021

As at the date of this joint announcement, the Board of Directors comprises Ms. Zhang Jing (Chairman), Mr. Yan Hao[#] (Chief Executive Officer), Ms. Huang Lilan[#] , Mr. Yuan Qiang, Dr. Lu Haitian[+] , Mr. Lin Sen[+] and Mr. Huang Jian[+] .

• Executive Director

• Non-executive Director

• • Independent Non-executive Director

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

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The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this joint announcement (other than information relating to the Offeror and parties acting in concert with it and the future intentions of the Offeror regarding the Group) and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this joint announcement (other than those expressed by the Offeror and parties acting in concert with it) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement in this joint announcement misleading.

As at the date of this joint announcement, the directors of the Offeror are Mr. Wu Shengwu, Mr. Yu Bo, Mr. Sun Qian; the independent directors are Dr. Deng Honghui, Mr. Wei Yu and Ms. Wong, Yan Ki.

All directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this joint announcement including the information on the Offeror’s future intentions regarding the Group (other than information relating to the Group) and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this joint announcement (other than those expressed by the Group) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement, the omission of which would make any statement in this joint announcement misleading.

This joint announcement will remain on the “Latest Company Announcements” page of the GEM website at www.hkgem.com for at least seven days from the date of its posting and on the website of the Company at www.lotoie.com.

In the case of inconsistency, the English text of this joint announcement shall prevail over the Chinese text.

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