Crypto Flow Technology Limited — Proxy Solicitation & Information Statement 2019

Jan 11, 2019

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Loto Interactive Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited 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.

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Loto Interactive Limited

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 8198)

PROPOSED CHANGE OF AUDITORS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Capitalised terms used in this cover shall have the same meanings as defined in this circular.

A notice convening the EGM to be held at 50th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong on Friday, 1 February 2019 at 11:00 a.m. is set out on pages 5 to 6 of this circular. Whether or not you are able to attend the EGM in person, you are requested to complete and return the enclosed form of proxy, in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM and any adjournment thereof should you so desire and in such case, the form of proxy shall be deemed to be revoked.

This circular will remain on the “Latest Company Announcements” page of the GEM website at www.hkgem.com for a minimum period of 7 days from the date of its publication and on the Company’s website at www.lotoie.com.

14 January 2019

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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CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Notice of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5

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DEFINITIONS

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

“Articles” the articles of associations of the Company “Audit Committee” the audit committee of the Board “Board” the board of Directors “Company” Loto Interactive Limited, a company incorporated in the Cayman Islands with limited liability, whose Shares are listed on GEM “Director(s)” the director(s) of the Company “EGM” the extraordinary general meeting of the Company to be convened to consider, and if thought fit, to approve the Proposed Change of Auditors “Ernst & Young” Ernst & Young “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 dollar(s), the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “Proposed Change of Auditors” the resignation of Ernst & Young as auditors of the Company and the proposed appointment of ZHONGHUI as new auditors of the Company following the resignation of Ernst & Young and upon the approval of the Shareholders by an ordinary resolution at the EGM and to hold office until the conclusion of the next annual general meeting of the Company “Share(s)” ordinary share(s) of a par value of HK$0.01 each in the share capital of the Company “Shareholder(s)” the holder(s) of the Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “ZHONGHUI” ZHONGHUI ANDA CPA Limited

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LETTER FROM THE BOARD

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Loto Interactive Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8198)

Directors: Mr. Pan Zhengming (Chairman) Mr. Wang Bingzhong[#] (Chief Executive Officer) Ms. Huang Lilan[#] Mr. Yuan Qiang Dr. Lu Haitian[+] Mr. Yan Hao[+] Mr. Lin Sen[+]

• Executive Director

• Non-executive Director

• • Independent Non-executive Director

Registered office: P.O. Box 31119 Grand Pavilion, Hibiscus Way 802 West Bay Road Grand Cayman, KY1-1205 Cayman Islands

Head office and principal place of business in Hong Kong: 50th Floor, Bank of China Tower 1 Garden Road Central Hong Kong

14 January 2019

To the Shareholders

Dear Sir or Madam,

PROPOSED CHANGE OF AUDITORS AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information relating the Proposed Change of Auditors and the notice of the EGM to be convened and held for the purpose of considering and, if thought fit, approving the ordinary resolution in relation to the appointment of auditors.

PROPOSED CHANGE OF AUDITORS

The Board announced that Ernst & Young has resigned as the auditors of the Company with effect from 10 January 2019 as the Company and Ernst & Young could not reach a consensus on the audit fee for the financial year ended 31 December 2018.

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LETTER FROM THE BOARD

Ernst & Young has confirmed that from their perspective there are no matters that need to be brought to the attention of the Shareholders or creditors of the Company. Both the Board and the Audit Committee confirmed that there is no disagreement between the Company and Ernst & Young and that there are no matters or circumstances in respect of the proposed change of auditor which should be brought to the attention of the Shareholders or creditors of the Company.

The Board confirmed that Ernst & Young has not commenced any audit work on the consolidated financial statements of the Group for the financial year ended 31 December 2018. The Board believes that the change of auditors will not have any impact on the annual audit works of the Company for the financial year ended 31 December 2018.

The Board, with the recommendation from the Audit Committee, has resolved to propose the appointment of ZHONGHUI as new auditors of the Company to fill the casual vacancy following the resignation of Ernst & Young and to hold office until the conclusion of the next annual general meeting of the Company. The appointment of ZHONGHUI as auditors of the Company in place of Ernst & Young is subject to the approval by the Shareholders by an ordinary resolution at the EGM to be convened pursuant to the Articles.

Pursuant to Article 158, if the office of auditor becomes vacant by the resignation or death of the auditor, or by his becoming incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall as soon as practicable convene an extraordinary general meeting to fill the vacancy. Article 155(3) provides that Shareholders shall by ordinary resolution at that meeting appoint another auditor in stead of the resigned auditor for the remainder of his term.

EGM

A notice convening the EGM to be held at 50th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong on Friday, 1 February 2019 at 11:00 a.m. is set out on pages 5 to 6 of this circular. An ordinary resolution will be proposed at the EGM to approve the proposed appointment of auditors.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM in person, you are requested to complete and return the enclosed form of proxy, in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so desire and in such case, the form of proxy shall be deemed to the revoked.

To the best of the Director’s knowledge, information and belief, having made all reasonable enquiries, no Shareholders will be required to abstain from voting on the resolutions to be proposed at the EGM.

The resolutions proposed to be approved at the EGM will be taken by poll and an announcement on the results of the EGM will be made by the Company thereafter.

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LETTER FROM THE BOARD

CLOSURE OF REGISTER OF MEMBERS

For the purpose of determining Shareholders’ entitlement to attend and vote at the forthcoming EGM, the transfer books and register of members of the Company will be closed from Tuesday, 29 January 2019 to Friday, 1 February 2019 (both days inclusive), during which period no transfer of shares can be registered.

In order to be entitled to attend and vote at the EGM, all share transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for registration no later than 4:30 p.m. on Monday, 28 January 2019.

RECOMMENDATION

The Board considers that the Proposed Change of Auditors is in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the ordinary resolution set out in the notice of the EGM enclosed to this circular.

RESPONSIBILITY STATEMENT

This circular, 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 circular 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 circular misleading.

Yours faithfully, For and on behalf of the Board of

Loto Interactive Limited

Wang Bingzhong

Chief Executive Officer and Executive Director

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NOTICE OF EGM

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Loto Interactive Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8198)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“ EGM ”) of Loto Interactive Limited (“ Company ”) will be held at 50th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong on Friday, 1 February 2019 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT ZHONGHUI ANDA CPA Limited be and is hereby appointed as auditors of the Company to fill the casual vacancy following the resignation of Ernst & Young and to hold office until the conclusion of the next annual general meeting of the Company, and that the board (the “ Board ”) of directors of the Company be authorised to fix the remuneration of the said auditors.”

By order of the Board Loto Interactive Limited Wang Bingzhong

Chief Executive Officer and Executive Director

Hong Kong, 14 January 2019

Registered office: P.O. Box 31119 Grand Pavilion, Hibiscus Way 802 West Bay Road Grand Cayman, KY1-1205 Cayman Islands

Head office and principal place of business in Hong Kong: 50th Floor, Bank of China Tower 1 Garden Road Central Hong Kong

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NOTICE OF EGM

Notes:

• (1) A shareholder entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a shareholder of the Company.

• (2) Where there are joint holders of any Share, any one of such joint holders may vote at the EGM, either personally or by proxy, in respect of such Shares as if he was 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.

• (3) The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, must be lodged with the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not less than 48 hours before the time appointed for holding the EGM (or any adjournment thereof).

• (4) Completion and return of the form of proxy will not preclude a shareholder from attending the EGM and voting in person at the EGM or any adjournment thereof is he so desire. If a shareholder attends the EGM after having deposited the form of proxy, his form of proxy will be deemed to have been revoked.

• (5) According to Rule 17.47 (4) of the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited, any voting of the shareholders of the Company at the general meeting will be taken by way of a poll and an announcement of the voting results will be made after the general meeting. Accordingly, the resolutions will be taken by way of a poll at the EGM.

• (6) The translation into Chinese language of this notice is for reference only. In case of any inconsistency, the English version shall prevail.

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