Crypto Flow Technology Limited - M&A Activity 2022

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 purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of Loto Interactive Limited nor is it a solicitation of any acceptance, vote or approval in any jurisdiction.

MANFUL KINGDOM LIMITED 萬豐興業有限公司

(incorporated in Hong Kong with limited liability)

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

JOINT ANNOUNCEMENT

(1) ACQUISITION OF SHARES IN LOTO INTERACTIVE LIMITED BY MANFUL KINGDOM LIMITED;

(2) POSSIBLE MANDATORY UNCONDITIONAL CASH OFFERS BY LEGO SECURITIES LIMITED

FOR AND ON BEHALF OF MANFUL KINGDOM LIMITED TO ACQUIRE ALL THE ISSUED SHARES OF AND TO CANCEL ALL OUTSTANDING SHARE OPTIONS OF LOTO INTERACTIVE LIMITED (OTHER THAN THOSE ALREADY OWNED AND/OR AGREED TO BE ACQUIRED BY MANFUL KINGDOM LIMITED AND/OR PARTIES ACTING IN CONCERT WITH IT); (3) APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER; AND

(4) RESUMPTION OF TRADING

Financial adviser to Manful Kingdom Limited

Financial adviser to the Company

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Independent financial adviser to the Independent Board Committee

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THE SHARE PURCHASE AGREEMENT

The Company was informed by the Vendor that, on 12 July 2022 (after trading hours), the Vendor and the Offeror entered into the Share Purchase Agreement, pursuant to which the Vendor has conditionally agreed to sell and the Offeror has conditionally agreed to purchase the Sale Shares, being 279,673,200 Shares, representing approximately 51.00% of the entire issued share capital of the Company as at the date of this joint announcement, for a total consideration of HK$78,308,496, equivalent to HK$0.28 per Sale Share, which was agreed between the Offeror and the Vendor after arm’s length negotiations with reference to the prevailing closing prices of the Shares. Completion shall take place on the Completion Date.

POSSIBLE MANDATORY UNCONDITIONAL CASH OFFERS

As at the date of this joint announcement, Ms. Mak Lam, being a member of the Offeror Concert Party Group, is interested in 15,160,000 Shares, which represents approximately 2.76% of the total issued share capital of the Company.

Upon Completion, the Offeror Concert Party Group will be in aggregate interested in a total of 294,833,200 Shares, representing approximately 53.76% of the total issued share capital of the Company as at the date of this joint announcement. Pursuant to Rule 26.1 and Rule 13.5 of the Takeovers Code, subject to Completion, the Offeror is required to make mandatory unconditional cash offers (i) to acquire all the issued Shares (other than those already owned and/or agreed to be acquired by the Offeror Concert Party Group); and (ii) to cancel all the outstanding Share Options.

As at the date of this joint announcement, the Company has (i) a total of 548,378,822 Shares in issue; and (ii) 31,973,600 outstanding Share Options conferring rights to subscribe for 31,973,600 new Shares with exercise prices ranging from HK$0.26 to HK$2.00 per Share Option. Save for the Share Options mentioned above, the Company does not have any outstanding options, derivatives, warrants or relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) which are convertible or exchangeable into Shares and has not entered into any agreement for the issue of such options, derivatives, warrants or securities which are convertible or exchangeable into Shares as at the date of this joint announcement.

Principal terms of the Offers

Subject to Completion, the Offers will be made by Lego Securities, on behalf of the Offeror and in compliance with the Takeovers Code on the following basis:

The Share Offer

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.28 in cash

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The Option Offer

For cancellation of each Share Option with exercise price being

(i) HK$0.26 (18,160,000 Share Options in total) . . . . . . . . . . . . . HK$0.02 in cash
(ii) HK$1.10 (13,413,600 Share Options in total) . . . . . . . . . . . HK$0.0001 in cash
(iii) HK$2.00 (400,000 Share Options in total) . . . . . . . . . . . . . . HK$0.0001 in cash

The Share Offer will be extended to all Offer Shareholders and the Option Offer will be extended to all Offer Optionholders (whether their respective Share Options are vested or not) in accordance with the Takeovers Code. Following acceptance of the Option Offer, the Share Options together with all rights attaching thereto will be entirely cancelled and renounced.

The Offers will be unconditional in all aspects when made, and will not be conditional upon any minimum level of acceptances being received or any other conditions.

IRREVOCABLE UNDERTAKINGS

Upon Completion, the Vendor will be interested in 48,195,605 Shares, representing approximately 8.79% of the total issued share capital of the Company as at the date of this joint announcement. Pursuant to the Vendor Irrevocable Undertaking, the Vendor has irrevocably undertaken not to accept the Share Offer in respect of the aforesaid 48,195,605 Shares to be held by it immediately upon Completion and the Vendor will not sell, transfer, encumber, grant any rights over or otherwise dispose of the Shares held by it (other than the sale and transfer of the Sale Shares by the Vendor to the Offeror under the Share Purchase Agreement) and/or otherwise make the Shares held by it available for acceptance of the Offers, directly or indirectly, prior to completion, termination or withdrawal of the Offers.

As at the date of this joint announcement:

(i) Ms. Zhang Jing, a Director, held 137,200 Shares, 3,100,000 Share Options with an exercise price of HK$0.26 each and 466,800 Share Options with an exercise price of HK$1.10 each;
(ii) Mr. Yan Hao, a Director, held 3,100,000 Share Options with an exercise price of HK$0.26 each and 200,000 Share Options with an exercise price of HK$1.10 each;
(iii) Ms. Huang Lilan, a Director, held 1,000,000 Share Options with an exercise price of HK$0.26 each and 1,000,000 Share Options with an exercise price of HK$1.10 each;

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(iv) Mr. Yang Xianfeng, a Director, held 3,100,000 Share Options with an exercise price of HK$0.26 each and 2,066,800 Share Options with an exercise price of HK$1.10 each;
(v) Mr. Law Man San Vincent, a party acting in concert with the Vendor, held 184,000 Shares;
(vi) Mr. Yu Bo, a party acting in concert with the Vendor, held 8,000 Shares and 3,100,000 Share Options with an exercise price of HK$0.26 each and 3,100,000 Share Options with an exercise price of HK$1.10 each; and
(vii) Mr. Yuan Qiang, a party acting in concert with the Vendor, held 3,100,000 Share Options with an exercise price of HK$0.26 each and 3,100,000 Share Options with an exercise price of HK$1.10 each.

On 20 July 2022, each of Ms. Zhang Jing, Mr. Yan Hao, Ms. Huang Lilan, Mr. Yang Xianfeng, Mr. Law Man San Vincent, Mr. Yu Bo and Mr. Yuan Qiang has executed the Other Irrevocable Undertakings pursuant to which each of them has irrevocably undertaken not to accept the Share Offer and/or the Option Offer (as applicable) and he/she will not sell, transfer, encumber, grant any rights over or otherwise dispose of any aforesaid Shares and/or Share Options held by each of them and/or otherwise make such Shares and/or Share Options available for acceptance of the Offers, directly or indirectly and/or exercise any Share Options held by each of them prior to completion, termination or withdrawal of the Offers.

Accordingly, a total of 48,524,805 Shares (being the Excluded Shares) and 26,433,600 Share Options (being the Excluded Options) are subject to the Irrevocable Undertakings. The Irrevocable Undertakings shall terminate immediately if the Offers are not made in accordance with the requirements under the Takeovers Code or the Offers close, lapse or are withdrawn.

Value of the Offers

As at the date of this joint announcement, the Company has a total of 548,378,822 Shares in issue and 31,973,600 outstanding Share Options.

Assuming no Share Options have been exercised prior to the close of the Offers, there will be 548,378,822 issued Shares. Excluding the 294,833,200 Shares to be held by the Offeror Concert Party Group upon Completion; and assuming no change in the issued share capital of the Company from the date of this joint announcement up to the close of the Offers, (a) 253,545,622 Shares will be subject to the Share Offer and the value of the Share Offer will be HK$70,992,774.16; and (b) the total consideration required to satisfy the cancellation of all the outstanding Share Options will be approximately HK$364,581.36.

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Assuming all Share Options have been exercised prior to the close of the Offers, there will be 580,352,422 issued Shares. Excluding the 294,833,200 Shares held by the Offeror Concert Party Group upon Completion; and assuming no other change in the issued share capital of the Company from the date of this joint announcement up to the close of the Offers, (a) 285,519,222 Shares will be subject to the Share Offer and the value of the Share Offer will be HK$79,945,382.16; and (b) the total consideration required to satisfy the cancellation of all the outstanding Share Options will be nil.

On the basis of full acceptance of the Offers (excluding the Excluded Shares and the Excluded Options), the maximum cash consideration payable by the Offeror under the Offers (assuming no Share Options have been exercised prior to the close of the Offers) would be HK$57,439,416.76 and the maximum cash consideration payable by the Offeror under the Offers (assuming all Share Options have been exercised prior to the close of the Offers) would be HK$58,957,028.76.

Confirmation of financial resources

The Offeror intends to finance and satisfy the consideration payable under the Share Purchase Agreement and the Offers from (i) its internal resources; and (ii) a loan facility pursuant to the Loan Agreement.

Lego Corporate Finance, being the financial adviser to the Offeror in respect of the Offers, is satisfied that sufficient financial resources are, and will remain, available to the Offeror to satisfy the consideration for the Sale Shares and the consideration payable by the Offeror upon full acceptance of the Offers.

INDEPENDENT BOARD COMMITTEE

Pursuant to Rule 2.1 and Rule 2.8 of the Takeovers Code, the Independent Board Committee, comprising Dr. Lu Haitian, the independent non-executive Director who has no direct or indirect interest in the Offers, has been established to make recommendations to the Offer Shareholders and Offer Optionholders as to whether the terms of the Share Offer and the Option Offer are fair and reasonable and as to the acceptance of the Share Offer and the Option Offer.

Although Ms. Zhang Jing and Mr. Yang Xianfeng are non-executive Directors, each of them, being a party acting in concert with the Vendor, is considered to have interest in the Offers and therefore has not been appointed as members of the Independent Board Committee. In addition, as Mr. Lin Sen and Mr. Huang Jian (each an independent non-executive Director) are interested in the Offeror’s Covenants Relating to Share Options, they have not been appointed as members of the Independent Board Committee.

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INDEPENDENT FINANCIAL ADVISER

VMS Securities has been appointed as the Independent Financial Adviser to advise the Independent Board Committee in respect of the Offers and as to whether the terms of the Offers are fair and reasonable and as to acceptance of the Offers pursuant to Rule 2.1 of the Takeovers Code. The appointment of the Independent Financial Adviser has been approved by the Independent Board Committee. The advice of the Independent Financial Adviser and the recommendation of the Independent Board Committee will be included in the Composite Document to be despatched to the Shareholders.

DESPATCH OF THE COMPOSITE DOCUMENT

Subject to Completion, if the Offers materialise, it is the intention of the Offeror and the Company to combine the offer document and the offeree board circular into the Composite Document and be jointly despatched by the Offeror and the Company to the Shareholders and the Optionholders in accordance with the requirements of the Takeovers Code after the Completion takes place. Pursuant to Rule 8.2 of the Takeovers Code, the Composite Document containing, among other things, (i) the terms of the Offers; (ii) the recommendation from the Independent Board Committee to the Offer Shareholders and the Offer Optionholders; and (iii) the advice from the Independent Financial Adviser in respect of the Offers, together with the Form(s) of Acceptance, will be despatched to the Shareholders within 21 days after the date of this joint announcement, or such other date as the Executive may approve. Further announcement(s) regarding the despatch of the Composite Document will be made by the Offeror and the Company as and when appropriate.

RESUMPTION OF TRADING IN THE SHARES

At the request of the Company, trading in the Shares on the Stock Exchange was halted with effect from 9:00 a.m. on 13 July 2022 pending the release of this joint announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:00 a.m. on 21 July 2022.

WARNING

The making of the Offers is subject to Completion which shall take place on the Completion Date such that the Offers may or may not proceed. Accordingly, the sale and purchase of the Sale Shares may or may not be completed and the Offers may or may not proceed. The issue of this joint announcement does not in any way imply that the Offers will be made. Shareholders, Optionholders and potential investors should exercise caution when dealing in the securities of the Company. If the Shareholders, Optionholders and potential investors are in any doubt about their position, they should consult a licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

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THE SHARE PURCHASE AGREEMENT

The Company was informed by the Vendor that on 12 July 2022 (after trading hours), the Vendor and the Offeror entered into the Share Purchase Agreement (as subsequently amended on 14 July 2022). The principal terms of the Share Purchase Agreement are summarised below:

Date : 12 July 2022 (after trading hours)

Parties :

Vendor: BIT Mining Limited (formerly known as 500.com Limited),

Purchaser: Manful Kingdom Limited, being the Offeror

Subject of the Share Purchase Agreement

Pursuant to the Share Purchase Agreement, the Vendor has conditionally agreed to sell and the Offeror has conditionally agreed to purchase the Sale Shares, being 279,673,200 Shares, representing approximately 51.00% of the entire issued share capital of the Company as at the date of this joint announcement, free and clear of any Encumbrances together with all rights and interests attaching thereto, including but not limited to all dividends or distribution which may be paid, declared or made in respect thereof as at the date of the Share Purchase Agreement.

Consideration for the Sale Shares

The aggregate consideration for the Sale Shares is HK$78,308,496 (representing HK$0.28 per Sale Share) which was agreed between the Offeror and the Vendor after arm’s length negotiations with reference to the prevailing closing prices of the Shares. The Consideration shall be paid in cash by the Offeror to the Vendor at Completion.

Conditions precedent to the Share Purchase Agreement

Completion is subject to the satisfaction (or waiver by the Offeror, where applicable) of the following conditions by 5:00 p.m. on the Long Stop Date:

(i) the SFC and the Stock Exchange having advised that they have no further comment on this joint announcement and the publication of this joint announcement on the Stock Exchange’s website;
(ii) the warranties given by the Vendor under the Share Purchase Agreement remaining true, accurate and not misleading in any respect or, as the case may be, in any material respect in accordance with terms and conditions of the Share Purchase Agreement; and

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(iii) the Shares remaining listed and traded on GEM, and no notification or indication being received from the Stock Exchange or the SFC prior to Completion that the listing and/or trading of the Shares on GEM will or may be, for whatever reason, withdrawn or suspended (excluding any suspension for the purpose of obtaining clearance from the SFC or the Stock Exchange for this joint announcement.

The condition (ii) is expressed to be for the benefit of the Offeror which the Offeror may at any time waive by notice to the Vendor. For the avoidance of doubt, the condition (i) shall not, in any circumstances, be waived by any party to the Share Purchase Agreement. If the conditions have not been satisfied (or waived by the Offeror, where applicable) by 5:00 p.m. on the Long Stop Date, the parties to the Share Purchase Agreement shall not be bound to proceed with the purchase and sale of the Sales Shares and the Share Purchase Agreement shall automatically and immediately terminate.

As at the date of this joint announcement, all of the conditions have been satisfied. It is expected that the Completion Date shall take place on 25 July 2022. Further announcement will be jointly made by the Company and the Offeror upon Completion.

Completion

Pursuant to the Share Purchase Agreement, Completion shall take place on the third Business Day after the fulfilment or waiver of the conditions precedent to the Share Purchase Agreement or at such other date as the Vendor and the Offeror may agree in writing.

POSSIBLE MANDATORY UNCONDITIONAL CASH OFFERS

As at the date of this joint announcement, Ms. Mak Lam, being a member of the Offeror Concert Party Group is interested in 15,160,000 Shares, which represents approximately 2.76% of the total issued share capital of the Company.

Upon Completion, the Offeror Concert Party Group will be in aggregate interested in a total of 294,833,200 Shares, representing approximately 53.76% of the total issued share capital of the Company as at the date of this joint announcement. Pursuant to Rule 26.1 and Rule 13.5 of the Takeovers Code, subject to Completion, the Offeror is required to make mandatory unconditional cash offers (i) to acquire all the issued Shares (other than those already owned and/or agreed to be acquired by the Offeror Concert Party Group) and (ii) to cancel all the outstanding Share Options.

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Principal terms of the Offers

Subject to Completion, the Offers will be made by Lego Securities, on behalf of the Offeror and in compliance with the Takeovers Code on the following basis:

The Share Offer

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.28 in cash

The Share Offer Price of HK$0.28 per Offer Share is equal to the per Sale Share consideration under the Share Purchase Agreement. The Offer Shares to be acquired under the Share Offer shall be fully paid and free and clear of any lien and together with all rights attaching to them, including all rights to any dividend or other distribution declared, made or paid on or after the date on which the Share Offer is made, being the date of the despatch of the Composite Document.

As at the date of this joint announcement, no outstanding dividend declared by the Company remains unpaid. and it is advised by the Board that the Company has no intention to make, declare or pay any future dividend or make other distributions until after the close of the Share Offer.

The Option Offer

For cancellation of each Share Option with exercise price being

(i) HK$0.26 (18,160,000 Share Options in total)[(Note 1)] . . . . . . . . . . . HK$0.02 in cash (ii) HK$1.10 (13,413,600 Share Options in total)[(Note 2)] . . . . . . . . . HK$0.0001 in cash (iii) HK$2.00 (400,000 Share Options in total)[(Note 3)] . . . . . . . . . . . . HK$0.0001 in cash
Note 1: These Share Options were granted on 10 August 2020, subject to three years vesting period and ten years’ validity period till 9 August 2030. As at the date of this joint announcement, two-thirds of these share options had been fully vested with the remaining of these Share Options expected to be vested on 10 August 2022.

Note 2: These Share Options were granted on 1 April 2019, subject to three years vesting period and ten years’ validity period till 31 March 2029. As at the date of this joint announcement, these share options had been fully vested.

Note 3: These Share Options were granted on 5 January 2018, subject to three years vesting period and ten years’ validity period till 4 January 2028. As at the date of this joint announcement, these share options had been fully vested.

The Option Offer Price will be the see-through price which represents the amount by which the Share Offer Price exceeds the exercise price of the relevant Share Options. In respect of Share Option with an exercise price higher than the Share Offer Price, the Option Offer Price is at a nominal amount of HK$0.0001.

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The Offers will be unconditional in all aspects when made, and will not be conditional upon any minimum level of acceptances being received or any other conditions.

Comparison of value

The Share Offer Price of HK$0.28 per Offer Share represents:

(i) a discount of approximately 52.54% to the closing price of HK$0.59 per Share as quoted on the Stock Exchange on 12 July 2022, being the last trading day immediately before the date of this joint announcement;
(ii) a discount of approximately 39.13% to the closing price of HK$0.46 per Share as quoted on the Stock Exchange on 21 June 2022, being the Last Trading Day;
(iii) a discount of approximately 17.65% to the average closing price of HK$0.34 per Share based on the daily closing prices as quoted on the Stock Exchange for the five consecutive trading days immediately prior to and including the Last Trading Day;
(iv) a discount of approximately 6.67% to the average closing price of approximately HK$0.30 per Share based on the daily closing prices as quoted on the Stock Exchange for the 10 consecutive trading days immediately prior to and including the Last Trading Day;
(v) a discount of approximately 3.45% to the average closing price of approximately HK$0.29 per Share based on the daily closing prices as quoted on the Stock Exchange for the 30 consecutive trading days immediately prior to and including the Last Trading Day; and
(vi) a premium of 12.00% over the audited consolidated net asset value attributable to the Shareholders of approximately HK$0.25 per Share as at 31 December 2021, calculated by dividing the Group’s audited consolidated net assets attributable to the Shareholders of approximately HK$137,233,000 as at 31 December 2021 by 548,378,822 Shares in issue as at the date of this joint announcement.

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Highest and lowest Share prices

The highest and lowest closing prices of the Shares as quoted on the Stock Exchange during the six-month period immediately preceding the commencement of the offer period (as defined under the Takeovers Code) and up to and including (i) the Last Trading Day were HK$0.54 per Share (on 7 January 2022) and HK$0.242 per Share (on 9 June 2022), respectively; and (ii) the last trading day prior to the date of this joint announcement were HK$0.59 per Share (on 12 July 2022) and HK$0.242 per Share (on 9 June 2022), respectively.

IRREVOCABLE UNDERTAKINGS

As at the date of this joint announcement:

(i) Ms. Zhang Jing, a Director, held 137,200 Shares, 3,100,000 Share Options with an exercise price of HK$0.26 each and 466,800 Share Options with an exercise price of HK$1.10 each;
(ii) Mr. Yan Hao, a Director, held 3,100,000 Share Options with an exercise price of HK$0.26 each and 200,000 Share Options with an exercise price of HK$1.10 each;
(iii) Ms. Huang Lilan, a Director, held 1,000,000 Share Options with an exercise price of HK$0.26 each and 1,000,000 Share Options with an exercise price of HK$1.10 each;
(iv) Mr. Yang Xianfeng, a Director, held 3,100,000 Share Options with an exercise price of HK$0.26 each and 2,066,800 Share Options with an exercise price of HK$1.10 each;
(v) Mr. Law Man San Vincent, a party acting in concert with the Vendor, held 184,000 Shares;
(vi) Mr. Yu Bo, a party acting in concert with the Vendor, held 8,000 Shares and 3,100,000 Share Options with an exercise price of HK$0.26 each and 3,100,000 Share Options with an exercise price of HK$1.10 each; and

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(vii) Mr. Yuan Qiang, a party acting in concert with the Vendor, held 3,100,000 Share Options with an exercise price of HK$0.26 each and 3,100,000 Share Options with an exercise price of HK$1.10 each.

On 20 July 2022, each of Ms. Zhang Jing, Mr. Yan Hao, Ms. Huang Lilan, Mr. Yang Xianfeng Mr. Law Man San Vincent, Mr. Yu Bo and Mr. Yuan Qiang has executed the Other Irrevocable Undertakings pursuant to which each of them has irrevocably undertaken not to accept the Share Offer and/or the Option Offer (as applicable) and he/ she will not sell, transfer, encumber, grant any rights over or otherwise dispose of any aforesaid Shares and/or Share Options held by each of them and/or otherwise make such Shares and/or Share Options available for acceptance of the Offers, directly or indirectly and/or exercise any Share Options held by each of them prior to completion, termination or withdrawal of the Offers.

Value of the Offers

As at the date of this joint announcement, the Company has a total of 548,378,822 Shares in issue and 31,973,600 outstanding Share Options.

Assuming all Share Options have been exercised prior to the close of the Offers, there will be 580,352,422 issued Shares. Excluding the 294,833,200 Shares held by the Offeror Concert Party Group upon Completion; and assuming no change in the issued share capital of the Company from the date of this joint announcement up to the close of the Offers, (a) 285,519,222 Shares will be subject to the Share Offer and the value of the Share Offer will be HK$79,945,382.16; and (b) the total consideration required to satisfy the cancellation of all the outstanding Share Options will be nil.

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On the basis of full acceptance of the Offers (excluding the Excluded Shares and the Excluded Options), the maximum cash consideration payable by the Offeror under the Offers (assuming no Share Options have been exercised prior to the close of the Offers) would be HK$57,439,416.76and the maximum cash consideration payable by the Offeror under the Offers (assuming all Share Options have been exercised prior to the close of the Offers) would be HK$58,957,028.76.

Confirmation of financial resources

Lego Corporate Finance, being the financial advisers to the Offeror in respect of the Offers, is satisfied that sufficient financial resources are, and will remain, available to the Offeror to satisfy the consideration for the Sale Shares and the consideration payable by the Offeror upon full acceptance of the Offers.

Effect of accepting the Offers

By accepting the Share Offer, the Offer Shareholders will sell their tendered Shares to the Offeror which shall be fully paid and free and clear of any lien and together with all rights attaching to them, including all rights to any dividend or other distribution declared, made or paid on or after the date on which the Share Offer is made, being the date of despatch of the Composite Document. As at the date of this joint announcement, no outstanding dividend declared by the Company remains unpaid, and it is advised by the Board that the Company has no intention to make, declare or pay any future dividend or make other distributions until after the close of the Share Offer,

By accepting the Option Offer, the Offer Optionholders will agree to the cancellation of their tendered Options and all rights attached thereto with effect from the date on which the Option Offer is made, being the date of despatch of the Composite Document.

Acceptances of the Offers will be irrevocable and not capable of being withdrawn, except as permitted under the Takeovers Code.

Validity of Share Options upon close of the Offers

Pursuant to the 2012 Share Option Scheme, if the Share Offer becomes or is declared unconditional, the Optionholders of the 2012 Share Option Scheme shall be entitled to exercise their Share Options (to the extent not already exercised) at any time thereafter and up to the close of such offer and after which the Share Options shall lapse automatically. Optionholders should note that the Board has confirmed that, upon Completion, it will exercise its absolute discretion in accordance with paragraph 13.1 of the 2012 Share Option Scheme to the effect that, upon the close of such offer, no Share Option will be cancelled or lapsed solely as a result of the making of the Offers.

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Hong Kong stamp duty

The seller’s Hong Kong ad valorem stamp duty will be payable by the Offer Shareholders on acceptances of the Share Offer calculated at a rate of 0.13% of (i) the market value of the Offer Shares; or (ii) the consideration payable by the Offeror, in respect of the relevant acceptances of the Share Offer, whichever is higher, and the amount of such duty will be deducted from the amount payable by the Offeror to such person on acceptance of the Share Offer. The Offeror will arrange for payment of the seller’s ad valorem stamp duty on behalf of the relevant Offer Shareholders who accept the Share Offer and pay the buyer’s Hong Kong ad valorem stamp duty in connection with the acceptance of the Share Offer and the transfers of the relevant Shares in accordance with the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong).

No stamp duty is payable in connection with the acceptances of the Option Offer.

Payment

Payment in cash in respect of the Offers will be made as soon as possible but in any event within seven (7) business days (as defined in the Takeovers Code) of the date on which the duly completed Form(s) of Acceptance and the relevant documents of title of the Shares or the Share Options (as the case may be) are received by the Offeror (or its agent) to render each such acceptance under the Offers complete and valid pursuant to Rule 20.1 and Note 1 to Rule 30.2 of the Takeovers Code.

No fractions of a cent will be payable and the amount of cash consideration payable to any person who accept the Offers will be rounded up to the nearest cent.

Taxation advice

Offer Shareholders and Offer Optionholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting or rejecting the Offers. None of the Offeror Concert Party Group, the Company, Lego Securities, Lego Corporate Finance and (as the case may be) their respective ultimate beneficial owners, directors, officers, agents, advisers or associates or any other person involved in the Offers accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Offers.

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Availability of the Offers

The Offeror intends to make the Offers available to all Offer Shareholders and Offer Optionholders, including the Overseas Shareholders and Overseas Optionholders. However, the Offers to persons not resident in Hong Kong may be affected by the laws and regulations of the relevant jurisdiction in which they are resident. The making of the Offers to persons with a registered address in jurisdictions outside Hong Kong may be prohibited or limited by the laws or regulations of the relevant jurisdictions. Overseas Shareholders and/or Overseas Optionholders who are citizens, residents or nationals of a jurisdiction outside Hong Kong should fully observe any applicable legal or regulatory requirements and, where necessary, seek independent legal advice. It is the responsibilities of Overseas Shareholders and the Overseas Optionholders who wish to accept the Offers to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection with the acceptance of the Offers (including the obtaining of any governmental or other consent which may be required or the compliance with other necessary formalities and the payment of any transfer or other taxes due from such Overseas Shareholders and/or Overseas Optionholders in respect of such jurisdictions).

If the receipt of the Composite Document by the Overseas Shareholder and/or Overseas Optionholder is prohibited by any applicable laws and regulations and may only be effected upon compliance with conditions or requirements in such overseas jurisdictions that would be unduly burdensome, the Composite Document, subject to the Executive’s consent, may not be despatched to such Overseas Shareholder and/or Overseas Optionholder. In those circumstances, the Offeror will apply for any waivers as may be required by the Executive pursuant to Note 3 to Rule 8 of the Takeovers Code at such time.

Any acceptance of the Offers by any Overseas Shareholder and/or Overseas Optionholder will be deemed to constitute a representation and warranty from such Overseas Shareholder and/or Overseas Optionholder to the Offeror that the local laws and requirements have been complied with. Overseas Shareholders and Overseas Optionholders should consult their professional advisers if in doubt.

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ARRANGEMENTS RELATING TO THE SECURITIES OF THE COMPANY AND OTHER CONFIRMATIONS

Arrangements relating to Share Options

Pursuant to the 2012 Share Option Scheme, if a grantee of the Share Options, who is an employee, ceases to be an Eligible Participant due to the termination of his or her employment, the Share Options granted to him or her (to the extent not already exercised) shall lapse, in whole or in part, immediately or as the case may be, upon the expiry of a period of three months following the date of such cessation. Although the Board has confirmed that it will exercise its absolute discretion to the effect that, upon the close of such Offers, no Share Option will be cancelled or lapsed solely as a result of the making of the Offers, the new management team of the Company after the close of the Offers may still have the authority to terminate the employment of the Optionholders such that their Share Options will lapse in three months. To maintain the Share Options granted to certain senior management of the Company for their contribution to the Company during their past service to the Company, pursuant to the Share Purchase Agreement, the Offeror has covenanted that within a period of two years after the Completion to procure the Company not to take any steps to cancel the Share Options that have been granted to five Directors (namely Mr. Yan Hao, Ms. Huang Lilan, Mr. Yang Xianfeng, Mr. Lin Sen and Mr. Huang Jian) and two consultants of the Company (namely Mr. Wang Bingzhong and Mr. Yuan Qiang). The Share Options granted to them which are not exercised within two years after the date of the Completion shall automatically lapse and cease to be exercisable. None of the aforementioned five Directors and two consultants is a Shareholder.

Other confirmations

The Offeror confirms that, as at the date of this joint announcement:

(i) save for the 15,160,000 Shares, representing approximately 2.76% of the total issued share capital of the Company, held by Ms. Mak Lam, being a member of the Offeror Concert Party Group, as at the date of this joint announcement, and the Sale Shares to be acquired by the Offeror, none of the members of the Offeror Concert Party Group owned or had control or direction over any voting rights or rights over the Shares, convertible securities, warrants, options of the Company or any derivatives in respect of such securities;
(ii) save for the Sale Shares to be acquired by the Offeror from the Vendor, none of the members of the Offeror Concert Party Group had dealt for value in any Shares, convertible securities, warrants, options of the Company or any derivatives in respect of such securities during the six-month period preceding the commencement of the offer period (as defined under the Takeovers Code) (i.e., before 24 June 2022 (being the date of announcement of the Company regarding a possible offer)) and up to the date of this joint announcement;

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(iii) save for the Share Purchase Agreement, the Loan Agreement and the Irrevocable Undertakings, there is no arrangement (whether by way of option, indemnity or otherwise) of any kind referred to in Note 8 to Rule 22 of the Takeovers Code in relation to the shares of the Offeror or the Shares and which might be material to the Offers;
(iv) save for the Share Purchase Agreement, there is no agreement or arrangement to which any members of the Offeror Concert Party Group is a party which relates to circumstances in which the Offeror may or may not invoke or seek to invoke a pre-condition or a condition to the Offers;
(v) none of the members of the Offeror Concert Party Group has borrowed or lent any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company;
(vi) save for the Irrevocable Undertakings, none of the members of the Offeror Concert Party Group has received any irrevocable commitment to accept or reject the Offers;
(vii) save and except the Offeror’s Covenants Relating to Share Options, there are no agreements or arrangements in relation to outstanding derivative in respect of the securities in the Company which has been entered into by the members of the Offeror Concert Party Group;
(viii) save for the consideration for the Sale Shares payable by the Offeror to the Vendor under the Share Purchase Agreement, there is no other consideration, compensation or benefits in whatever form paid or to be paid by the members of the Offeror Concert Party Group to the Vendor, its ultimate beneficial owners or parties acting in concert with it in connection with the sale and purchase of the Sale Shares under the Share Purchase Agreement;
(ix) save for the Share Purchase Agreement and the Irrevocable Undertakings, there is no understanding, arrangement or agreement or special deal (as defined in Rule 25 of the Takeovers Code) between the Vendor, its ultimate beneficial owners or parties acting in concert with any of them on one hand, and the Offeror Concert Party Group on the other hand; and
(x) save for the Share Purchase Agreement and the Irrevocable Undertakings, there is no understanding, arrangement or agreement or special deal (as defined in Rule 25 of the Takeovers Code) between (1) any Shareholder; and (2)(a) the Offeror Concert Party Group or (b) the Company, its subsidiaries or associated companies.

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INFORMATION ON THE GROUP

The Company was incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the GEM of the Stock Exchange. The Group is principally engaged in (i) the provision of data analysis and storage services; (ii) data processors leasing services; and (iii) money lending business in Hong Kong.

Set out below is a summary of the audited financial information of the Group for each of the two financial years ended 31 December 2020 and 2021 as extracted from the annual report of the Company for the year ended 31 December 2021, respectively:

	For the year ended 31 December	For the year ended 31 December
	2021	2020
	HK$’000	HK$’000
Revenue	180,721	382,955
Loss before taxation	295,107	40,357
Loss for the year	292,336	43,255
	As at 31 December
	2021	2020
	HK$’000	HK$’000
Total assets	165,520	454,539
Total liabilities	28,519	44,829
Net assets	137,001	409,710

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SHAREHOLDING STRUCTURE OF THE COMPANY

The following table sets out the shareholding structure of the Company (i) as at the date of this joint announcement and immediately before Completion; (ii) immediately after Completion (assuming none of the Share Options have been exercised); and (iii) immediately after Completion (assuming all Share Options have been exercised).

	As at the date of	As at the date of	Immediately after	Immediately after	Immediately after	Immediately after
	this joint announcement		Completion (assuming		Completion (assuming
	and immediately		none of the Share Options		all Share	Options
Shareholders	before Completion		have been exercised)		have been exercised)
	Number of		Number of		Number of
	Shares	%	Shares	%	Shares	%
		(approximate)		(approximate)		(approximate)
Offeror Concert Party Group
– Offeror	–	–	279,673,200	51.00	279,673,200	48.19
– Ms. Mak Lam (Note 1)	15,160,000	2.76	15,160,000	2.76	15,160,000	2.61
Sub-total	15,160,000	2.76	294,833,200	53.76	294,833,200	50.80
Vendor and his concert parties
– Vendor	327,868,805	59.79	48,195,605	8.79	48,195,605	8.30
– Ms. Zhang Jing (Note 2)	137,200	0.03	137,200	0.03	3,704,000	0.64
– Mr. Yan Hao (Note 2)	–	–	–	–	3,300,000	0.57
– Ms. Huang Lilan (Note 2)	–	–	–	–	2,000,000	0.34
– Mr. Yang Xianfeng (Note 3)	–	–	–	–	5,166,800	0.89
– Mr. Law Man San Vincent (Note 3)	184,000	0.03	184,000	0.03	184,000	0.03
– Mr. Yu Bo (Note 3)	8,000	0.0	8,000	0.0	6,208,000	1.07
– Mr. Yuan Qiang (Note 3)	–	–	–	–	6,200,000	1.07
Sub-total	328,198,005	59.85	48,524,805	8.85	74,958,405	12.92
Other Directors
– Mr. Lin Sen	–	–	–	–	400,000	0.07
– Mr. Huang Jian	–	–	–	–	200,000	0.03
Public Shareholders	205,020,817	37.39	205,020,817	37.39	209,960,817	36.18
Total:	548,378,822	100.00	548,378,822	100.00	580,352,422	100.00

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Notes:

Ms. Mak Lam, being the sole director and a controlling shareholder of the Offeror interested in 55% shareholding interests thereof (of which, 25% is held by Ms. Mak Lam on trust as a nominee for Mr. Li Hongbin), is a party acting in concert with the Offeror.
Given each of Ms. Zhang Jing, Ms. Huang Lilan holds positions in the Vendor and that Mr. Yan Hao is an executive Director who has a close working relationship with the aforesaid Directors, they are presumed to be parties acting in concert with the Vendor.
Given Mr. Yang Xianfeng is the chief executive officer of the Vendor, Mr. Law Man San Vincent is an executive director of the Vendor, Mr. Yu Bo is the chairman of the board of directors of the Vendor and Mr. Yuan Qiang is the chief financial officer of the Vendor, each of Mr. Yang Xianfeng, Mr. Law Man San Vincent, Mr. Yu Bo and Mr. Yuan Qiang is a party acting in concert with the Vendor.
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.

INFORMATION ON THE OFFEROR

The Offeror is an investment holding company incorporated in Hong Kong with limited liability, and is directly owned as to 35% by Mr. Fu Jiepin, as to 55% by Ms. Mak Lam (of which, 25% is held by Ms. Mak Lam on trust as a nominee for Mr. Li Hongbin), as to 5% by Ms. Liang Yun and as to 5% by Mr. Liu Weihong. Ms. Mak Lam is the sole director of the Offeror.

Ms. Mak Lam, aged 55, graduated from Sun Yat-Sen University ( 中山大學 ) with a bachelor’s degree in automatic control in 1989. Ms. Mak Lam has over five years of experience in engineering and over 15 years of experience as a secretary to the board of directors. From 1990 to 1995, Ms. Mak worked as the engineer of quality control at Star Fair Electronics Co., Ltd., a company principally engaged in manufacturing of electronic appliances. From 2004 up to and including the date of this joint announcement, Ms. Mak has been working as the secretary to the board of directors at Huayu Expressway Group Limited, which is a company listed on the Main Board of the Stock Exchange (stock code: 1823) and principally engaged in the construction, operation and management of expressways in the PRC and the business of liquor and spirits trading.

Mr. Fu Jiepin, aged 54, is an executive director of Huayu Expressway Group Limited which, as disclosed above, is a company listed on the Main Board of the Stock Exchange (stock code: 1823). Mr. Fu graduated from Sun Yat-Sen University ( 中山大學 ) with a bachelor’s degree in electronics and information system in 1989. Mr. Fu has over 23 years of experience in development, operation and management of expressways in the PRC.

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Mr. Li Hongbin, aged 54, graduated from Sun Yat-Sen University ( 中山大學 ) with a bachelor’s degree in library science in 1989. From 1998 to 2017, Mr. Li worked as a general manager in various industries including companies principally engaged in the business of building materials trading and water sports events organising and management. From 2017 up to and including the date of this joint announcement, Mr. Li has been a partner of 深圳賢林文化產業投資有限公司 (Shenzhen Xianlin Cultural Industry Investment Company Limited**) which is a company principally engaged in investment activities in cultural industries.

INTENTION OF THE OFFEROR ON THE GROUP

It is the intention of the Offeror that the Company will continue to focus on the development of its existing businesses. The Offeror does not intend to introduce any major changes to the existing operations and businesses of the Group upon the close of the Offers.

Following the close of the Offers, the Offeror will conduct a review on the operations and financial position of the Group for the purpose of formulating business plans and strategies for the Group’s long-term business development and will explore other business opportunities for the Group. Subject to the results of the review, and should suitable investment or business opportunities arise, the Offeror may consider whether any assets and/or business acquisitions or disposals by the Group will be appropriate in order to enhance its growth.

The Offeror has no intention to terminate or make significant changes to the employment of any key employees of the Group (except for the proposed changes to the members of the Board at a time no earlier than that permitted under the GEM Listing Rules and the Takeovers Code or such later time as the Offeror considers to be appropriate, as further disclosed in the paragraph headed “Proposed change to the Board composition of the Company” below).

As disclosed the announcements of the Company dated 20, 21, 25 June 2021, 18 October 2021 and 8 March 2022 and the annual report of the Company for the year ended 31 December 2021, the operation of the Group’s three big data centres in Sichuan Province, the PRC (the “ Big Data Centres ”), had been suspended as a result of the change of the PRC regulatory environment regarding crypto currency mining activities in the PRC since June 2021. The Big Data Centres had been closed in order to comply with the relevant PRC law and regulation. The Company had made provision of impairment of fixed assets caused by the Group’s plan to demolish the said machinery and equipment. Save for the potential disposal of the residual obsolete assets of the Big Data Centres, the Offeror has no intention to dispose the Group’s fixed assets which are not in the ordinary and usual course of business of the Group as a result of completion of the Offers. However, the Offeror reserves the right to make any changes that it deems necessary or appropriate to the Group’s business and operations to optimise the value of the Group.

– 21 –

As at the date of this joint announcement, no investment or business opportunity has been identified nor has the Offeror entered into any agreement, arrangement, understanding or negotiation in relation to the injection of any assets or business into the Group.

PROPOSED CHANGE TO THE BOARD COMPOSITION OF THE COMPANY

As at the date of this joint announcement, the Board comprises two executive Directors, namely Mr. Yan Hao and Ms. Huang Lilan, two non-executive Directors, namely, Ms. Zhang Jing and Mr. Yang Xianfeng and three independent non-executive Directors, namely, Dr. Lu Haitian, Mr. Lin Sen and Mr. Huang Jian.

No Directors will resign before the close of the Offers. It is the intention of the Offeror that new directors will be nominated to the Board after the despatch of the Composite Document and all existing Directors will resign from the Board, and in particular, Ms. Zhang Jing will also resign as the chairman of the Board and Mr. Yan Hao will also resign as the chief executive officer of the Company, with effect from the earliest time permitted under the applicable laws, rules and regulations, the GEM Listing Rules and the Takeovers Code, whichever is the latest. As at the date of this joint announcement, the Offeror has not reached any final decision as to who will be nominated as new director(s) of the Company. Any changes to the members of the Board will be made in compliance with the Takeovers Codes and the GEM Listing Rules and further announcement(s) will be made as and when appropriate. Further announcement(s) will be made upon any changes to the composition to the Board in compliance with the Takeovers Code and the GEM Listing Rules as and when appropriate.

PUBLIC FLOAT AND MAINTAINING THE LISTING STATUS OF THE COMPANY

The Offeror intends to maintain the listing of the Shares on the GEM after the close of the Offers. The Offeror will undertake to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares.

The Offeror and the new Directors to be appointed to the Board (if any) will undertake to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares, which may include but not limited to placing down of sufficient number of accepted Shares by the Offeror and/or issue of additional Shares by the Company for this purpose. No arrangements have been confirmed or put in place as at the date of this joint announcement. Further announcement(s) will be made in accordance with the requirements of the GEM Listing Rules and the Takeovers Code as and when appropriate.

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INDEPENDENT BOARD COMMITTEE

Although Ms. Zhang Jing and Mr. Yang Xianfeng are non-executive Directors, each of them, being a party acting in concert with the Vendor, is considered to have interest in the Offers and therefore has not been appointed as members of the Independent Board Committee. In addition, as Mr. Lin Sen and Mr. Huang Jian (each an independent nonexecutive Director) are interested in the Offeror’s Covenants Relating to Share Options, they have not been appointed as members of the Independent Board Committee.

INDEPENDENT FINANCIAL ADVISER

DESPATCH OF THE COMPOSITE DOCUMENT

Subject to Completion, if the Offers materialise, it is the intention of the Offeror and the Company to combine the offer document and the offeree board circular into the Composite Document and be jointly despatched by the Offeror and the Company to the Shareholders and the Optionholders in accordance with the requirements of the Takeovers Code after the Completion takes place. Pursuant to Rule 8.2 of the Takeovers Code, the Composite Document containing, among other things, (i) the terms of the Offers; (ii) the recommendation from the Independent Board Committee to the Offer Shareholders and the Offer Optionholders; and (iii) the advice from the Independent Financial Adviser in respect of the Offers, together with the Form(s) of Acceptance, will be despatched to the Shareholders within 21 days after the date of this joint announcement, or such later date as the Executive may approve. Further announcement(s) regarding the despatch of the Composite Document will be made by the Offeror and the Company as and when appropriate.

The Offer Shareholders and the Offer Optionholders are encouraged to read the Composite Document carefully, including the advice of the Independent Financial Adviser to the Independent Board Committee and the recommendation from the Independent Board Committee to the Offer Shareholders in respect of the Share Offer and to the Offer Optionholders in respect of the Option Offer, before deciding whether or not to accept the Share Offer and/or the Option Offer.

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DEALINGS DISCLOSURE

For the purposes of the Takeovers Code, the offer period commenced on the date of the announcement of the Company regarding a possible offer, being 24 June 2022.

In accordance with Rule 3.8 of the Takeovers Code, associates of the Company or the Offeror (including persons holding 5% or more of a class of relevant securities (as defined under Note 4 to Rule 22 of the Takeovers Code) of the Company or the Offeror) are reminded to disclose their dealings in any relevant securities of the Company pursuant to the requirements of the Takeovers Code.

R E S P O N S I B I L I T I E S O F S T O C K B R O K E R S , B A N K S A N D O T H E R INTERMEDIARIES

In accordance with Rule 3.8 of the Takeovers Code, reproduced below is the full text of Note 11 to Rule 22 of the Takeovers Code:

“Stockbrokers, banks and others who deal in relevant securities on behalf of clients have a general duty to ensure, so far as they are able, that those clients are aware of the disclosure obligations attaching to associates of an offeror or the offeree company and other persons under Rule 22 and that those clients are willing to comply with them. Principal traders and dealers who deal directly with investors should, in appropriate cases, likewise draw attention to the relevant Rules. However, this does not apply when the total value of dealings (excluding stamp duty and commission) in any relevant security undertaken for a client during any 7 day period is less than $1 million.

This dispensation does not alter the obligation of principals, associates and other persons themselves to initiate disclosure of their own dealings, whatever total value is involved.

Intermediaries are expected to co-operate with the Executive in its dealings enquiries. Therefore, those who deal in relevant securities should appreciate that stockbrokers and other intermediaries will supply the Executive with relevant information as to those dealings, including identities of clients, as part of that co-operation.”

RESUMPTION OF TRADING IN THE SHARES

– 24 –

WARNING

DEFINITIONS

In this joint announcement, the following terms shall have the meanings set out below, unless the context otherwise requires:

“2012 Share Option the share option scheme adopted by the Company pursuant Scheme” to an ordinary resolution passed by the Shareholders on 18 May 2012
“acting in concert” has the same meaning ascribed to it in the Takeovers Code
“associate” has the same meaning ascribed to it in the Takeovers Code
“Board” the board of Directors
“Business Day(s)” any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorised by laws to be closed in Hong Kong
“Company” Loto Interactive Limited, a company incorporated in the Cayman Islands with limited liability, whose shares are listed on GEM (stock code: 8198)
“Completion” completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the Share Purchase Agreement
“Completion Date” the date on which Completion takes place, being the third Business Day after the fulfilment or waiver of the conditions precedent to the Share Purchase Agreement (or such other date as the parties thereto may agree in writing)

– 25 –

“Composite Document”
the composite offer and response document to be jointly issued by the Offeror and the Company in accordance with the Takeovers Code containing, among other things, details of the Offers, the recommendation from the Independent Board Committee to the Offer Shareholders and the Offer Optionholders and the advice from the Independent Financial Adviser to the Independent Board Committee in respect of the Offers
“Director(s)” the director(s) of the Company
“Eligible Participant”
full time or part time employees of the Group (including any directors, whether executive or non-executive and whether independent or not, of the Company or any subsidiary) and any suppliers, consultants, agents and advisers eligible for Share Options under the 2012 Share Option Scheme
“Encumbrances” any mortgage, lien, charge, pledge, option, right to acquire, assignment by way of security, security interest, title retention, preferential right or trust arrangement, claim, covenant, profit á prendre, easement or other security arrangement or any other arrangement having the same effect
“Excluded Options”
3,566,800 Share Options, 3,300,000 Share Options, 2,000,000 Share Options, 5,166,800 Share Options, 6,200,000 Share Options and 6,200,000 Share Options held as at the date of this joint announcement and to be held immediately after Completion by Ms. Zhang Jing, Mr. Yan Hao, Ms. Huang Lilan, Mr. Yang Xianfeng, Mr. Yu Bo and Mr. Yuan Qiang, respectively, in the aggregate number of 26,433,600 Share Options
“Excluded Shares” 48,195,605 Shares, 184,000 Shares, 137,200 Shares and 8,000 Shares held as at the date of this joint announcement and to be held immediately after Completion by the Vendor, Mr. Law Man San Vincent Ms. Zhang Jing and Mr. Yu Bo, respectively, in the aggregate number of 48,524,805 Shares
“Executive”
the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director
“Form(s) of Acceptance”
the respective form of acceptance and transfer in respect of the Share Offer and form of acceptance in respect of the Option Offer accompanying the Composite Document
“GEM”
GEM operated by the Stock Exchange

– 26 –

“GEM Listing Rules” the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited

“Group” the Company and its subsidiaries from time to time

“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Independent Board an independent committee of the Board comprising Dr. Lu Committee” Haitian, the independent non-executive Director who has no direct or indirect interest in the Offers, established for the purpose of advising the Offer Shareholders in respect of the Share Offer and the Offer Optionholders in respect of the Option Offer and as to whether the terms of the Offers are fair and reasonable and as to acceptance of the Offers pursuant to Rule 2.1 of the Takeovers Code
“Independent Financial VMS Securities Limited, a corporation licensed by the Adviser” or “VMS SFC to carry out Type 1 (dealing in securities) and Type Securities” 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser appointed, which appointment has been approved by the Independent Board Committee, for the purpose of advising the Independent Board Committee, the Offer Shareholders and the Offer Optionholders in respect of the Offers, as to whether the Offers are fair and reasonable, and as to the acceptance of the Offers
“Irrevocable collectively, the Vendor Irrevocable Undertaking and the Undertakings” Other Irrevocable Undertakings
“Last Trading Day”
21 June 2022, being the last trading day immediately before the date of the announcement of the Company dated 24 June 2022 regarding a possible offer
“Lego Corporate Lego Corporate Finance Limited, a corporation licensed by Finance” the SFC to conduct Type 6 (advising on corporate finance) regulated activities under the SFO, being the financial adviser to the Offeror in respect of the Offers
“Lego Securities” Lego Securities Limited, a corporation licensed by the SFC to conduct Type 1 (dealing in securities) regulated activities under the SFO, being the agent making the Offers on behalf of the Offeror

– 27 –

“Loan Agreement”
the loan facility agreement dated 13 July 2022 entered into between Lego Securities as the lender and the Offeror as the borrower in relation to a loan facility of HK$24,500,000 for financing the settlement of the consideration payable by the Offeror pursuant to the Offers
“Long Stop Date”
a date falling on the expiry of two months from the date of the Share Purchase Agreement, i.e. 12 September 2022, or such other date as the Vendor and the Offeror may agree in writing
“Offer Optionholder(s)” holder(s) of Share Option(s), other than members of the Offeror Concert Party Group
“Offer Share(s)”
any and all the Shares in issue (other than those already owned and/or agreed to be acquired by the Offeror Concert Party Group)
“Offer Shareholder(s)” holder(s) of Share(s), other than members of the Offeror Concert Party Group
“Offeror”
Manful Kingdom Limited, a company incorporated in Hong Kong with limited liability and beneficially owned as to 35% by Mr. Fu Jiepin, as to 55% by Ms. Mak Lam (of which, 25% is held by Ms. Mak Lam on trust as a nominee for Mr. Li Hongbin), as to 5% by Ms. Liang Yun and as to 5% by Mr. Liu Weihong
“Offeror Concert Party the Offeror and the parties acting in concert with it (including Group” Ms. Mak Lam)
“Offeror’s Covenants Relating to Share Options”
the Offeror’s covenant with the Vendor to procure the Company not to take any steps to cancel the Share Options that have been granted to five Directors (namely Mr. Yan Hao, Ms. Huang Lilan, Mr. Yang Xianfeng, Mr. Lin Sen and Mr. Huang Jian) and two consultants of the Company (namely Mr. Wang Bingzhong and Mr. Yuan Qiang) within a period of two years after the Completion pursuant to the Share Purchase Agreement
“Offers”

the Share Offer and the Option Offer

“Option Offer”
the possible unconditional mandatory cash offer to be made by Lego Securities on behalf of the Offeror upon the Completion for the cancellation of the Share Options in accordance with the Takeovers Code

– 28 –

“Option Offer Price”

the price at which the Option Offer will be made, which is (i) the “see-through” price, being the amount by which the Share Offer Price exceeds the relevant exercise price of the relevant Share Option, or (ii) a nominal amount of HK$0.0001 in respect of Share Options the exercise price of which is higher than the Share Offer Price, for the cancellation of each Share Option held by the Offer Optionholders
“Optionholder(s)” Holder(s) of the Share Options
“Other Irrevocable Undertaking(s)”
the deed(s) of irrevocable undertaking dated 20 July 2022 pursuant to which each of (i) Ms. Zhang Jing, Mr. Yan Hao, Ms. Huang Lilan and Mr. Yang Xianfeng, each being a Director; and (ii) Mr. Law Man San Vincent, Mr. Yu Bo and Mr. Yuan Qiang, each being a party acting in concert with the Vendor, has irrevocably undertaken not to accept the Share Offer and/or the Option Offer (as applicable) and he/ she will not sell, transfer, encumber, grant any rights over or otherwise dispose of any Shares and/or Share Options held by each of them and/or otherwise make such Shares and/or Share Options available for acceptance of the Offers, directly or indirectly and/or exercise any Share Options held by each of them prior to completion, termination or withdrawal of the Offers
“Oversea Offer Optionholder(s) whose address(es), as shown on the Optionholder(s)” register of Optionholders of the Company, is/are outside Hong Kong
“Oversea Offer Shareholder(s) whose address(es), as shown on the Shareholder(s)” register of members of the Company, is/are outside Hong Kong
“PRC”
the People’s Republic of China which, for the purpose of this joint announcement, shall exclude Hong Kong, Macau and Taiwan
“Sale Share(s)” 279,673,200 Shares beneficially owned by the Vendor as at the date of the Share Purchase Agreement and representing approximately 51.00% of the total issued share capital of the Company as at the date of the Share Purchase Agreement
“SFC”

the Securities and Futures Commission of Hong Kong

– 29 –

“SFO”

the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Share(s)” ordinary share(s) of a par value of HK$0.1 each in the share capital of the Company

“Share Offer” the possible mandatory unconditional cash offer to be made by Lego Securities on behalf of the Offeror to acquire all the Offer Shares in accordance with the Takeovers Code
“Share Offer Price” the price at which the Share Offer will be made, being HK$0.28 per Offer Share
“Share Option(s)” the outstanding share options granted by the Company pursuant to the 2012 Share Option Scheme
“Share Purchase the sale share and purchase agreement dated 12 July 2022 Agreement” entered into between the Vendor and the Offeror in respect of the sale and purchase of the Sale Shares (as subsequently amended on 14 July 2022)
“Shareholder(s)” holder(s) of the Share(s)
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Takeovers Code” the Code on Takeovers and Mergers of Hong Kong
“Vendor” BIT Mining Limited (formerly known as 500.com Limited), a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the New York Stock Exchange under the ticker symbol “BTCM”, which was interested in 327,868,805 Shares (representing approximately 59.79% of the issued share capital of the Company) as at the date of the Share Purchase Agreement

– 30 –

“Vendor Irrevocable Undertaking”

the deed of irrevocable undertaking dated 20 July 2022 pursuant to which the Vendor has irrevocably undertaken not to accept the Share Offer in respect of the aggregate of 48,195,605 Shares, representing approximately 8.79% of the total issued share capital of the Company as at the date of this joint announcement, to be held by it immediately upon Completion and the Vendor will not sell, transfer, encumber, grant any rights over or otherwise dispose of the Shares held by it (other than the sale and transfer of the Sale Shares by the Vendor to the Offeror under the Share Purchase Agreement) and/or otherwise make the Shares held by it available for acceptance of the Offers, directly or indirectly, prior to completion, termination or withdrawal of the Offers

“%”

per cent.

By order of the board of By order of the Board of Manful Kingdom Limited Loto Interactive Limited Mak Lam Yan Hao Director Chief Executive Officer and Executive Director

Hong Kong, 20 July 2022

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. Yang Xianfeng, Dr. Lu Haitian[+] , Mr. Lin Sen[+] and Mr. Huang Jian[+] .

Executive Director

Non-executive Director
- Independent non-executive Director

This joint announcement includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this joint announcement (other than those relating to the Offeror or any of its associates or parties acting in concert with it), 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 sole director of the Offeror) 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 statements in this joint announcement misleading.

As at the date of this joint announcement, the sole director of the Offeror is Ms. Mak Lam.

– 31 –

The sole director of the Offeror and Mr. Fu Jiepin jointly and severally accept full responsibility for the accuracy of information contained in this joint announcement (other than those relating to the Group, the Vendor or any of their associates or any parties acting in concert with them) 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 Directors) 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 statements in this joint announcement misleading.

This joint announcement will remain on the “Latest Listed Company Information” page of the Stock Exchange’s website at www.hkexnews.hk for at least 7 days from the date of its publication and on the Company’s website at www.lotoie.com.

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

** The English translation of Chinese names or words in this joint announcement, where indicated, are included for information purpose only, and should not be regarded as the official English translation of such Chinese names or words.

– 32 –

AI assistant

Crypto Flow Technology Limited — M&A Activity 2022

51323_rns_2022-07-20_826138d8-a6d5-48f2-82f9-590bb5fe1760.pdf

MANFUL KINGDOM LIMITED 萬豐興業有限公司

JOINT ANNOUNCEMENT

(1) ACQUISITION OF SHARES IN LOTO INTERACTIVE LIMITED BY MANFUL KINGDOM LIMITED;

(2) POSSIBLE MANDATORY UNCONDITIONAL CASH OFFERS BY LEGO SECURITIES LIMITED

(4) RESUMPTION OF TRADING

THE SHARE PURCHASE AGREEMENT

POSSIBLE MANDATORY UNCONDITIONAL CASH OFFERS

Principal terms of the Offers

The Share Offer

The Option Offer

IRREVOCABLE UNDERTAKINGS

Value of the Offers

Confirmation of financial resources

INDEPENDENT BOARD COMMITTEE

INDEPENDENT FINANCIAL ADVISER

DESPATCH OF THE COMPOSITE DOCUMENT

RESUMPTION OF TRADING IN THE SHARES

WARNING

THE SHARE PURCHASE AGREEMENT

Parties :

Subject of the Share Purchase Agreement

Consideration for the Sale Shares

Conditions precedent to the Share Purchase Agreement

Completion

POSSIBLE MANDATORY UNCONDITIONAL CASH OFFERS

Principal terms of the Offers

The Share Offer

The Option Offer

Comparison of value

Highest and lowest Share prices

IRREVOCABLE UNDERTAKINGS

Value of the Offers

Confirmation of financial resources

Effect of accepting the Offers

Validity of Share Options upon close of the Offers

Hong Kong stamp duty

Payment

Taxation advice

Availability of the Offers

Arrangements relating to Share Options

Other confirmations

INFORMATION ON THE GROUP

SHAREHOLDING STRUCTURE OF THE COMPANY

Notes:

INFORMATION ON THE OFFEROR

INTENTION OF THE OFFEROR ON THE GROUP

PROPOSED CHANGE TO THE BOARD COMPOSITION OF THE COMPANY

PUBLIC FLOAT AND MAINTAINING THE LISTING STATUS OF THE COMPANY

INDEPENDENT BOARD COMMITTEE

INDEPENDENT FINANCIAL ADVISER

DESPATCH OF THE COMPOSITE DOCUMENT

DEALINGS DISCLOSURE

R E S P O N S I B I L I T I E S O F S T O C K B R O K E R S , B A N K S A N D O T H E R INTERMEDIARIES

RESUMPTION OF TRADING IN THE SHARES

WARNING

DEFINITIONS

Executive Director

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Crypto Flow Technology Limited M&A Activity 2022