Crypto Flow Technology Limited — Proxy Solicitation & Information Statement 2020

May 8, 2020

THIS DOCUMENT 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 enclosed form of proxy, to the purchaser or to the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or to 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.

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

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Loto Interactive Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8198)

PROPOSED SHARE CONSOLIDATION AND NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the EGM of Loto Interactive Limited to be held at 50th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong on Tuesday, 26 May 2020 at 11:00 a.m. is set out on pages EGM-1 to EGM-2 of this circular. Whether or not you are able to attend the EGM in person, you are requested to complete 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 and in any event not less than 48 hours before the time appointed for holding 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 (as the case may be) should you so wish.

PRECAUTIONARY MEASURES FOR THE EGM

Please see page 1 of this circular for measures being taken to try to prevent and control the spread of the Novel Coronavirus (COVID-19) at the EGM, including:

• compulsory temperature checks and health declarations

• recommended wearing of surgical face masks

• no distribution of corporate gifts and refreshments

Any person who does not comply with the precautionary measures or is subject to any Hong Kong Government prescribed quarantine may be denied entry into the meeting venue. The Company encourages attendees to wear face masks and reminds Shareholders that they may appoint the Chairman of the meeting as their proxy to vote on the relevant resolution(s) at the EGM as an alternative to attending the EGM in person.

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.

11 May 2020

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 of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

– i –

CONTENTS

	Page
Precautionary measures for the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Expected timetable for the Share Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Notice of the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

– ii –

PRECAUTIONARY MEASURES FOR THE EGM

In view of the ongoing Novel Coronavirus (COVID-19) epidemic and recent requirements for prevention and control of its spread, the Company will implement the following preventive measures at the EGM to protect attending Shareholders, staff and other stakeholders from the risk of infection:

• (i) Compulsory body temperature checks will be conducted for every Shareholder, proxy or other attendee at each entrance of the meeting venue. Any person with a body temperature of over 37.4 degrees Celsius may be denied entry into the meeting venue or be required to leave the meeting venue.

• (ii) The Company encourages each attendee to wear a surgical face mask throughout the EGM and inside the meeting venue, and to maintain a safe distance between seats.

• (iii) No corporate gift, food or beverages will be provided at the EGM.

• (iv) Each attendee may be asked whether (a) he/she travels outside of Hong Kong within the 14-day period immediately before the EGM; and (b) he/she is subject to any Hong Kong Government prescribed quarantine. Anyone who responds positively to any of these questions may be denied entry into the meeting venue or be required to leave the meeting venue.

To the extent permitted under law, the Company reserves the right to deny entry into the meeting venue or require any person to leave the meeting venue in order to ensure the safety of the attendees at the EGM.

In the interest of all stakeholders’ health and safety and consistent with recent COVID-19 guidelines for prevention and control, the Company reminds all Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights. As an alternative, by using proxy forms with voting instructions inserted, Shareholders may appoint the Chairman of the meeting as their proxy to vote on the relevant resolution(s) at the EGM instead of attending the EGM in person.

The proxy form is attached to the EGM Circular for Shareholders who opt to receive physical circulars. Alternatively, the proxy form can be downloaded from the “Investor Relations” section of the Company’s website at www.lotoie.com or the website of Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk. If you are not a registered Shareholder (if your Shares are held via banks, brokers, custodians or the Hong Kong Securities Clearing Company Limited), you should consult directly with your banks or brokers or custodians (as the case may be) to assist you in the appointment of proxy.

If any Shareholder chooses not to attend the meeting in person but has any question about any resolution or about the Company, or has any matter for communication with the board of directors of the Company, he/she is welcome to contact the Company by email to info@lotoie.com or by mail to the Company Secretary at 50th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong.

If Shareholders have any questions relating to the EGM, please contact Computershare Hong Kong Investor Services Limited, the share registrar of the Company, as follows:

Computershare Hong Kong Investor Services Limited 17M Floor, Hopewell Centre 183 Queen’s Road East, Wan Chai, Hong Kong Email: hkinfo@computershare.com.hk Tel: 2862 8555 Fax: 2865 0990

– 1 –

DEFINITIONS

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

• “Board” the board of Directors “Business Day” a day (other than Saturday, Sunday or public holiday) on which the Stock Exchange is open for trading and on which banks are open for business in Hong Kong

• “CCASS” the Central Clearing and Settlement System established and operated by HKSCC

• “Company” Loto Interactive Limited, a company incorporated in the Cayman Islands with limited liability, whose Shares are listed on GEM

• “Consolidated Share(s)” ordinary share(s) of HK$0.1 each in the share capital of the Company after the Share Consolidation becoming effective

• “Director(s)” the director(s) of the Company “EGM” the extraordinary general meeting of the Company to be held at 50th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong on Tuesday, 26 May 2020 at 11:00 a.m. for the Shareholders to consider and, if thought fit, approve the Share Consolidation

• “Existing Share(s)” ordinary share(s) of HK$0.01 each in the existing share capital of the Company prior to the Share Consolidation becoming effective

• “GEM” GEM operated by the Stock Exchange “GEM Listing Rules” the Rules Governing the Listing of Securities on the GEM of the Stock Exchange

• “Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong “HKSCC” Hong Kong Securities Clearing Company Limited “Hong Kong” Hong Kong Special Administrative Region of the PRC

– 2 –

DEFINITIONS

• “Latest Practicable Date”

29 April 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “PRC” the People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• “Registrar” 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

• “Share Consolidation” the proposed consolidation of every ten (10) issued and unissued Existing Shares into one (1) Consolidated Share

• “Share Option Scheme” the share option scheme adopted by the Company pursuant to an ordinary resolution passed by the Shareholders on 18 May 2012

• “Share Options” the share options granted by the Company entitling the holders thereof to subscribe for new Shares pursuant to the Share Option Scheme

• “Shareholders” registered holder(s) of the Existing Share(s) and/or the Consolidated Share(s), as the case may be

• “Share(s)” the Existing Share(s) or the Consolidated Share(s), as the content may require

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

– 3 –

EXPECTED TIMETABLE FOR THE SHARE CONSOLIDATION

The expected timetable for implementation of the Share Consolidation is set out below:

Latest date and time for lodging transfers of the Existing Shares

for attending and voting at the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Wednesday, 20 May 2020 Determining closure of register of members for the entitlements to attend and vote at the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Thursday, 21 May 2020 to Tuesday, 26 May 2020 (both days inclusive) Latest date and time for lodging form of proxy for the EGM. . . . . . . . . . . . . . . . . . .11:00 a.m. on Sunday, 24 May 2020 Date and time of the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:00 a.m. on Tuesday, 26 May 2020

Publication of the announcement of poll results of the EGM . . . . . . . . . . . . . . . . . . Tuesday, 26 May 2020

The following events are conditional on the fulfilment of the conditions for the implementation of the Share Consolidation:

Effective date of the Share Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Thursday, 28 May 2020 First day of free exchange of existing share certificates (in orange colour) for new share certificates (in green colour) for the Consolidated Shares. . . . . . . .Thursday, 28 May 2020 Dealing in the Consolidated Shares commences . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 28 May 2020 Original counter for trading in the Existing Shares in board lot of 4,000 Shares (in the form of existing share certificates (in orange colour)) temporarily closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 28 May 2020 Temporary counter for trading in the Consolidated Shares in board lot of 400 Consolidated Shares (in the form of existing share certificates (in orange colour)) opens. . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 28 May 2020 Original counter for trading in the Consolidated Shares in board lot of 4,000 Consolidated Shares (in the form of new share certificates (in green colour)) re-opens . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 11 June 2020

– 4 –

EXPECTED TIMETABLE FOR THE SHARE CONSOLIDATION

Parallel trading in the Consolidated Shares (in the form of new share certificates (in green colour) in board lot of 4,000 Consolidated Shares and existing share certificates (in orange colour) in board lot of 400 Consolidated Shares) commences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 11 June 2020 Designated broker starts to stand in the market to provide matching services for the sale and purchase of odd lots of Consolidated Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 11 June 2020 Temporary counter for trading in board lot of 400 Consolidated Shares (in the form of existing share certificates (in orange colour)) closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 3 July 2020 Parallel trading in the Consolidated Shares (in the form of new share certificates (in green colour) in board lot of 4,000 Consolidated Shares and existing share certificates (in orange colour) in board lot of 400 Consolidated Shares) ends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 3 July 2020 Designated broker ceases to stand in the market to provide matching services for the sale and purchase of odd lots of Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 3 July 2020 Latest date and time for free exchange of existing share certificates (in orange colour) for new share certificates (in green colour) for the Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Tuesday, 7 July 2020 All times and dates specified in the timetable above refer to Hong Kong times and dates.

The timetable is indicative only and may be extended or varied. Any change to the expected timetable above will be announced by the Company as and when appropriate.

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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:

Ms. Zhang Jing* (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

11 May 2020

To the Shareholders

Dear Sir or Madam,

PROPOSED SHARE CONSOLIDATION AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

(I) INTRODUCTION

Reference is made to the announcement of the Company dated 24 April 2020 in relation to the Share Consolidation.

The purpose of this circular is to provide you with further information on, among other things, the Share Consolidation and a notice convening the EGM.

– 6 –

LETTER FROM THE BOARD

(II) PROPOSED SHARE CONSOLIDATION

The Board proposes to implement the Share Consolidation on the basis that every ten (10) issued and unissued Existing Shares of HK$0.01 each in the share capital of the Company will be consolidated into one (1) Consolidated Share of HK$0.1 each in the share capital of the Company.

Effect of the Share Consolidation

As at the Latest Practicable Date, the authorised share capital of the Company is HK$55,000,000.00 divided into 5,500,000,000 Existing Shares of HK$0.01 each, of which 3,158,599,836 Existing Shares have been issued as fully paid or credited as fully paid. Assuming that no further Existing Shares are allotted, issued or repurchased between the Latest Practicable Date and the date of the EGM, the authorised share capital of the Company will become HK$55,000,000.00 divided into 550,000,000 Consolidated Shares of HK$0.1 each, of which 315,859,983 Consolidated Shares (which are fully paid or credited as fully paid) will be in issue immediately upon the Share Consolidation becoming effective.

Other than the expenses to be incurred in relation to the Share Consolidation, the implementation of the Share Consolidation is not expected to alter the underlying assets, business operations, management or financial position of the Company or the proportionate interests or rights of the Shareholders, save for any fractional Consolidated Shares to which Shareholders may be entitled (details of which are set out in the paragraph headed “Fractional entitlement to Consolidated Shares” below).

Conditions of the Share Consolidation

The Share Consolidation will be subject to the following conditions:

• (1) the passing of an ordinary resolution by the Shareholders at the EGM approving the Share Consolidation;

• (2) the Listing Committee of the Stock Exchange granting approval to the listing of, and permission to deal in, the Consolidated Shares; and

• (3) the compliance with all relevant procedures and requirements under the applicable laws of the Cayman Islands and the GEM Listing Rules to effect the Share Consolidation.

The Share Consolidation will become effective on the next Business Day immediately following the fulfilment of the above conditions.

– 7 –

LETTER FROM THE BOARD

Listing Application

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

Subject to the granting of the listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange, as well as compliance with the stock admission requirements of the HKSCC, the Consolidated Shares, upon the Share Consolidation becoming effective, will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

The Consolidated Shares will be identical in all respects and rank pari passu in all respects with each other as to all future dividends and distributions which are declared, made or paid. All necessary arrangements will be made for the Consolidated Shares to be admitted into CCASS.

None of the Existing Shares are listed or dealt in on any other stock exchange other than the Stock Exchange, and at the time the Share Consolidation becoming effective, the Consolidated Shares in issue will not be listed or dealt in on any stock exchange other than the Stock Exchange, and no such listing or permission to deal in is being or is proposed to be sought.

Board lot size

The Existing Shares are currently traded on the Stock Exchange in the board lot size of 4,000 Existing Shares. Upon the Share Consolidation becoming effective, the board lot size for trading in the Consolidated Shares will remain as 4,000 Consolidated Shares.

Based on the closing price of HK$0.076 per Existing Share (equivalent to the theoretical closing price of HK$0.76 per Consolidated Share) as quoted on the Stock Exchange as at the Latest Practicable Date, the market value of each board lot of the Existing Shares is HK$304 and the theoretical market value of each board lot of the Consolidated Shares, assuming the Share Consolidation had become effective, would be HK$3,040.

Fractional entitlement to Consolidated Shares

Any fractional Consolidated Shares arising from the Share Consolidation will be disregarded and will not be issued to the Shareholders but all such fractional Consolidated Shares will be aggregated and, if possible, sold for the benefits of the Company. Fractional Consolidated Shares will only arise in respect of the entire shareholding of a holder of the Existing Shares regardless of the number of existing share certificates held by such holder.

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LETTER FROM THE BOARD

Shareholders concerned about losing out any fractional entitlement are recommended to consult their licensed securities dealer, bank manager, solicitor, professional accountant and/or other professional adviser and may wish to consider the possibility of buying or selling a sufficient number of Existing Shares to make up an entitlement to receive a whole number of Consolidated Shares.

Free exchange of share certificates

Subject to the Share Consolidation becoming effective, Shareholders may, on or after Thursday, 28 May 2020 until Tuesday, 7 July 2020 (both days inclusive), submit the existing share certificates (in orange colour) for the Existing Shares to the Registrar at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, to exchange, at the expense of the Company, for new share certificates (in green colour) for the Consolidated Shares, on the basis of every ten (10) Existing Shares for one (1) Consolidated Share without any fractional Consolidated Share. Thereafter, existing share certificates (in orange colour) for Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 to the Registrar (or such other amount as may from time to time be specified by the Stock Exchange) by the Shareholders for each share certificate (in orange colour) for the Existing Shares submitted for cancellation or each new share certificate (in green colour) issued for the Consolidated Shares, whichever the number of certificates cancelled/issued is higher. After 4:30 p.m. on Tuesday, 7 July 2020, existing share certificates (in orange colour) for the Existing Shares will only remain effective as documents of title and may be exchanged for certificates (in green colour) for the Consolidated Shares at any time but will not be accepted for delivery, trading and settlement purposes. It is expected that the new share certificates (in green colour) for the Consolidated Shares will be available for collection within 10 business days after the submission of the existing share certificates (in orange colour) to the Registrar for exchange.

Arrangement on odd lot trading

In order to facilitate the trading of odd lots (if any) of the Consolidated Shares arising from the Share Consolidation, the Company has appointed One China Securities Limited as an agent to provide odd lot matching services, on a best effort basis, regarding the sale and purchase of odd lots of the Consolidated Shares from 9:00 a.m. on Thursday, 11 June 2020 to 4:00 p.m. on Friday, 3 July 2020 (both days inclusive). Shareholders who wish to acquire odd lots of the Consolidated Shares to make up a full board lot, or to dispose of their holding of odd lots of the Consolidated Shares should contact Ms. Carmen Wong of One China Securities Limited at 2nd Floor, Cheong K. Building, 86 Des Voeux Road Central, Central, Hong Kong or at (852) 3188 2676 during the office hours (i.e. 9:00 a,m. to 5:00 p.m. from Monday to Friday) of such period.

Shareholders with odd lot holdings of the Consolidated Shares should note that the matching of the sale and purchase of odd lots of the Consolidated Shares is on a best efforts basis. Successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed.

– 9 –

LETTER FROM THE BOARD

Adjustments in relation to other securities of the Company

As at the Latest Practicable Date, there are outstanding Share Options for subscription of an aggregate of 295,836,000 Existing Shares under the Share Option Scheme. The Share Consolidation may lead to adjustments to the exercise price and/or the number of Consolidated Shares falling to be issued upon exercise of the outstanding Share Options pursuant to the terms and conditions of the Share Option Scheme and the GEM Listing Rules. Such adjustments will be made with reference to the following formula:

Adjusted number of Share Options = Existing number of Share Options × F

Adjusted exercise price = Existing exercise price × F[1]

Where F = 10[1] (i.e. every ten (10) Existing Shares will be consolidated into one (1) Consolidated Share)

Based on the above adjustment formula, the expected adjustments to be made to the Share Options which were outstanding as at the Latest Practicable Date are as follows.

	Before adjustments	Before adjustments	After adjustments	After adjustments
			Adjusted number
	Number of		of Consolidated
	Existing Shares		Shares to be
	to be allotted		allotted and	Adjusted
	and issued upon		issued upon full		exercise
	full exercise of	Exercise price	exercise of the	price per
	the outstanding	per Existing	outstanding	Consolidated
Date of grant	Share Options	Share	Share Options		Share
		(HK$)			(HK$)
5 January 2018	153,400,000	0.20	15,340,000		2.00
1 April 2019	142,436,000	0.11	14,243,600		1.10

The adjusted exercise prices and number of Consolidated Shares falling to be issued upon exercise of the Share Options are subject to the review and confirmation in writing by the Company’s auditor, ZHONGHUI ANDA CPA Limited, as required under the Share Option Scheme.

The Company will make further announcement(s) on such adjustments as and when appropriate.

Save for the aforesaid, the Company has no other outstanding options, warrants or other securities in issue which are convertible into or giving rights to subscribe for, convert or exchange into, any Existing Shares or Consolidated Shares, as the case may be, as at the Latest Practicable Date.

– 10 –

LETTER FROM THE BOARD

Reasons for the Share Consolidation

Pursuant to Rule 17.76 of the GEM Listing Rules, where the market price of the securities of an issuer approaches the extremities of HK$0.01 or HK$9,995.00, the issuer may be required either to change the trading method or to proceed with a consolidation or splitting of its securities. In addition, according to the “Guide on Trading Arrangements for Selected Types of Corporate Actions” issued by the Stock Exchange on 28 November 2008 and updated on 30 August 2019, taking into account the minimum transaction costs for a securities trade, the expected value per board lot should be greater than HK$2,000. In view of the recent trading price(s) of the Existing Shares and the value of each board lot of the Existing Shares being less than HK$2,000, the Board proposes to implement the Share Consolidation. It is expected that the Share Consolidation would bring about a corresponding upward adjustment in the trading price of the Consolidated Shares on the Stock Exchange and allow the value of each board lot to be increased to more than HK$2,000 and thereby complying with the above-mentioned trading requirements of the Stock Exchange.

In view of the prevailing trading price of the Existing Shares which is approaching the above mentioned threshold of extremities and the value per board lot being less than HK$2,000, the Board proposes to implement the Share Consolidation. The proposed Share Consolidation will increase the nominal value of the Shares and reduce the number of Shares currently in issue. It is expected to bring about a corresponding upward adjustment in the trading price per Consolidated Shares on the Stock Exchange and increase the trading value of each board lot to a reasonable level. It will also reduce the overall transaction and handling costs of dealings in the Shares as a proportion of the market value of each board lot, since most of the banks/securities houses will charge a minimum transaction costs for each securities trade. The Board believes that the higher trading price of the Consolidated Shares will enhance the Company’s corporate image and therefore attract investors to invest in the Company which is beneficial to both the Company and the Shareholders.

Given the foregoing, the Company considers the proposed Share Consolidation is justifiable in light of the potential costs and to maintain compliance with the GEM Listing Rules. Accordingly, the Directors consider that the Share Consolidation is beneficial to and in the interests of the Company and the Shareholders as a whole.

As at the Latest Practicable Date, the Company has no intention to carry out other corporate actions in the next 12 months which may have an effect of undermining or negating the intended purpose of the Share Consolidation, and the Company does not have any concrete plan to conduct any fund raising activities in the next 12 months. However, subject to prevailing market conditions in the coming 12 months, the Company may consider fund raising activities to replenish its general working capital and/or to finance any potential business opportunities after completion of the Share Consolidation when suitable fund raising opportunities arise in order to support future development of the Group. The Company will make further announcement in this regard in accordance with the GEM Listing Rules as and when appropriate.

– 11 –

LETTER FROM THE BOARD

(III) EGM

A notice of the EGM to be held for the Shareholders at 11:00 a.m. on Tuesday, 26 May 2020 at 50th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong is set out on pages EGM-1 to EGM-2 of this circular for the purpose of considering, and, if thought fit, to approve the Share Consolidation.

A form of proxy for use at the EGM is enclosed. Whether or not you intend to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Registrar 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.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholders are required to abstain from voting on the resolutions proposed at the EGM.

In order to determine the list of shareholders who will be entitled to attend and vote at the EGM, the register of members of the Company will be closed for registration of transfer of Shares from Thursday, 21 May 2020 to Tuesday, 26 May 2020 (both days inclusive) during which period no transfer of Shares will be effected. Shareholders whose names appear on the register of members of the Company on Wednesday, 20 May 2020 shall be entitled to attend and vote at the EGM. In order for the Shareholders to qualify for attending and voting at the EGM, all transfer documents, accompanied by the relevant share certificates, should be lodged for registration with the Registrar at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong on or before 4:30 p.m. on Wednesday, 20 May 2020.

Pursuant to Rule 17.47(4) of the GEM Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Accordingly, the resolutions proposed at the EGM will be taken by way of poll. An announcement on the poll results will be made by the Company after the EGM in the manner prescribed under Rule 17.47(5) of the GEM Listing Rules.

(IV) 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 is not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

(V) RECOMMENDATION

The Board considers that the proposed resolutions in relation to the Share Consolidation to be put forward at the EGM are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends all Shareholders to vote in favour of the resolutions to be proposed at the EGM.

– 12 –

LETTER FROM THE BOARD

(VI) WARNING

Shareholders should take note that the Share Consolidation is conditional upon satisfaction of the respective conditions set out above. Therefore, the Share Consolidation may or may not proceed.

Shareholders and potential investors are advised to exercise caution when dealing in the Shares of the Company, and if they are in any doubt about their position, they should consult their professional advisers.

Yours faithfully, For and on behalf of the Board of

Loto Interactive Limited Wang Bingzhong

Chief Executive Officer and Executive Director

– 13 –

NOTICE OF THE 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 the extraordinary general meeting of Loto Interactive Limited (the “ Company ”) will be held at 50th Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong on Tuesday, 26 May 2020 at 11:00 a.m. (the “ EGM ”) for the purpose of considering and, if thought fit, passing the following resolutions:

ORDINARY RESOLUTION

1. “ THAT subject to and conditional upon the granting of approval by the Listing Committee of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) of the listing of, and permission to deal in, the issued shares of the Company consolidated in the manner as set out in paragraph (a) of this resolution below (the “ Share Consolidation ”):

2. (a) with effect from the next business day immediately following the date on which this resolution is passed or the above condition is fulfilled (whichever is later):

   • (i) every ten (10) issued and unissued ordinary shares of HK$0.01 each in the share capital of the Company be consolidated into one (1) consolidated share of HK$0.1 each (each a “ Consolidated Share ”), such Consolidated Shares shall rank pari passu in all respects with each other and have the rights and privileges and be subject to the restrictions as contained in the articles of association of the Company; and

   • (ii) all fractional Consolidated Shares will be disregarded and not issued to the shareholders of the Company but all such fractional Consolidated Shares will be aggregated, and if possible, sold for the benefits for the Company; and

3. (b) any one or more of directors of the Company be and is/are hereby authorised to do all such acts and things and execute all such documents, including under seal where applicable, as he/she/they consider necessary, desirable or expedient to give effect to the foregoing arrangement for the Share Consolidation.”

By Order of the Board

Loto Interactive Limited

Wang Bingzhong

Chief Executive Officer and Executive Director

Hong Kong, 11 May 2020

– EGM-1 –

NOTICE OF THE EGM

Registered office: Head office and principal place of business P.O. Box 31119 in Hong Kong: Grand Pavilion, Hibiscus Way 50th Floor, Bank of China Tower 802 West Bay Road 1 Garden Road Grand Cayman, KY1-1205 Central Cayman Islands Hong Kong

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 Share 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. For determining the entitlement to attend and vote at the EGM, the register of members of the Company will be closed from Thursday, 21 May 2020 to Tuesday, 26 May 2020 (both days inclusive), during which period no share transfers will be registered. In order to be eligible to attend and vote at the EGM, all transfer forms accompanied by 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 Wednesday, 20 May 2020.

5. 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 if he so desires. If a shareholder attends the EGM after having deposited the form of proxy, his form of proxy will be deemed to have been revoked.

6. Article 66 of the Company’s articles of association sets out the procedure by which shareholders of the Company may demand a poll at general meetings.

According to Rule 17.47(4) of the GEM Listing Rules, any voting of the shareholders of the Company at the annual general meeting will be taken by way of a poll and an announcement of the voting results will be made after the annual general meeting. Accordingly, the resolutions will be taken by way of a poll at the annual general meeting.

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

PRECAUTIONARY MEASURES FOR THE EGM

Please see page 1 of the EGM Circular for measures being taken to try to prevent and control the spread of the Novel Coronavirus (COVID-19) at the EGM, including:

• compulsory temperature checks and health declarations

• recommended wearing of surgical face masks

• no distribution of corporate gifts and refreshments

Any person who does not comply with the precautionary measures or is subject to any Hong Kong Government prescribed quarantine may be denied entry into the meeting venue. The Company encourages attendees to wear face masks and reminds Shareholders that they may appoint the Chairman of the meeting as their proxy to vote on the relevant resolution(s) at the EGM as an alternative to attending the EGM in person.

– EGM-2 –