Crypto Flow Technology Limited — Share Issue/Capital Change 2025

Feb 28, 2025

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this 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 announcement.

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

Crypto Flow

Crypto Flow Technology Limited

加幂科技有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8198)

SUPPLEMENTAL ANNOUNCEMENT

IN RELATION TO

PLACING OF NEW SHARES UNDER GENERAL MANDATE

Financial adviser to the Company

Reference is made to the announcement of Crypto Flow Technology Limited (the "Company") dated 21 February 2025 in relation to the placing of new shares under general mandate (the "Announcement"). Unless otherwise specified, capitalised terms used herein shall have the same meanings as those defined in the Announcement.

SUPPLEMENTAL PLACING AGREEMENT

As disclosed in the Announcement, among others, completion of the Placing is conditional on the fulfilment of the conditions precedent to the Placing Agreement by 31 March 2025 (the "Long Stop Date") or such other date as may be agreed between the Company and the Placing Agent.

On 28 February 2025 (after trading hours), the Company and the Placing Agent entered into a supplemental agreement to the Placing Agreement, pursuant to which the Long Stop Date has been amended after arm's lengths negotiations between the parties from 31 March 2025 to 12 March 2025.

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Save and except for the aforesaid change in the Long Stop Date, all other terms of the Placing Agreement shall remain unchanged and the Placing Agreement shall remain in full force and effect. The Board considers that the change in the Long Stop Date is in the interests of the Company and the Shareholders as a whole.

FURTHER DETAILS ON THE INTENDED USE OF PROCEEDS

The Board wishes to provide further details on the expected timeline for utilising the net proceeds from the Placing and the intended application of the net proceeds from the Placing for the Group’s business development relating to Web3.0.

Expected timeline for utilising the net proceeds

Based on the latest development plans of the Group, it is expected that the respective net proceeds from the Placing allocated for (i) the development and new business opportunities relating to Web3.0 will be utilised within approximately 15 months following Completion; (ii) the expansion and improvement of big data centre(s) will be utilised within approximately nine months following Completion; (iii) the continuous enhancement of the research and development capabilities will be utilised within approximately nine months following Completion; and (iv) the general working capital purposes will be utilised within approximately nine months following Completion.

Intended application of the net proceeds for the business development relating to Web3.0

As disclosed in the interim report of the Group for the six months ended 30 June 2024, in response to the “Policy Statement on the Development of Virtual Assets in Hong Kong” released by the Hong Kong Finance and Treasury Bureau, the Company has been performing research on blockchain, the application of Web3.0 and the business models of infrastructure platforms with supporting technologies. The Company considers that the entering into of the Web3.0 industry at its relatively early stage would offer it strategic advantages to capitalise on the emerging opportunities and gain competitive edges within the industry. Specifically, the Company targets to expand its business development of Web3.0 by developing different products including but not limited to two core platforms, being an on-chain data analysis platform (the “Analysis Platform”) and a platform organising latest trading quotes from multiple Web3.0 decentralised exchanges (the “DEX Aggregator”), respectively. With experience in establishing big data centers, the Group could locate and set up the venue for the operation of both the Analysis Platform and the DEX Aggregator efficiently, which would on the other hand facilitate expansion in the business scale of the Group’s big data centres. While there may be certain platforms offering services within the same field, the Company believes that the rising market demand is yet to saturate and the development of such platforms would allow it to become one of the pioneers to capture the potential market share in Web3.0 developed regions before any players with market dominance are identified.

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The Analysis Platform is expected to integrate multi-chain trading data, provide artificial-intelligence ("AI") driven analyses and visualisation tools, while integrating social data to provide market sentiment insights primarily relating to blockchain assets. Comparing to the traditional data analysis platforms, the Analysis Platform is expected to deliver faster and real-time integration and analysis of decentralised data via Web3.0, enabling higher-speed insights and trend predictions from multiple blockchains and social data sources, meeting the high-frequency demands of the blockchain trading ecosystem. On the other hand, the DEX Aggregator is expected to be an aggregator that collects real-time trading quotes of blockchain assets from different decentralised exchanges, allowing users to identify the best deals before executing trade at decentralised exchanges, providing users with more comprehensive and customised trading experiences. The DEX Aggregator shall feature itself as a trading advisory tool for the blockchain assets such as token. It is expected that the target users of the Analysis Platform would be institutional investors such as hedge funds, data-driven traders and blockchain developers, whereas the target users of the DEX Aggregator would be high-net-worth individuals, asset management companies and institutional traders such as crypto funds that trade via Web3.0.

The Company plans to source the aforesaid users through different channels including but not limited to conducting blockchain developer competitions and crypto institutional investor events through major online community platforms, advertising on Web3.0 social media platforms, partnering with virtual assets exchanges and public blockchains on data sharing, and engaging in offline expansion by attending different Web3.0 conferences. Also, the Group could leverage on its 30%-interested up-and-running Web3.0 social media application, which has been launched since 2022, to facilitate the marketing and launch of the Analysis Platform and the DE Aggregator by promoting such platforms within the established crypto enthusiast community. In addition, by leveraging the Group's existing connections with the blockchain technology network including the mining customers of its existing big data centres, the Group could further amplify the outreach and adoption of the Analysis Platform and the DEX Aggregator. It is expected that the Group's sources of revenue from the Analysis Platform and the DEX Aggregator would be membership fees, subscription fees and/or service fees.

The Board considers that the extensive experience and background of the existing management of the Group are well suited for the Group's development of its Web3.0 business, while the Group is planning to recruit different talents to support the development of the Analysis Platform and the DEX Aggregator. Ms. Xiong Jiayan, an executive Director and the Vice President of Business Development of the Group, has over 15 years of experience in business development, operation and management. Ms. Xiong founded Shenzhen Mengdan Interactive Network Co., Ltd. in 2014, a company focused on the development and operation of internet games, and currently serves as its chairman, overseeing daily management and operations. Ms. Xiong also had previous experience in product operations at Tencent Technology (Shenzhen) Co., Ltd. On the other hand, Mr. Sheng Ling, the Chief Executive Officer of the Company, has more than 18 years of experience in finance and fintech, having worked at prominent financial institutions such as Bank of China (Hong Kong) Limited, Ant Group and WeBank Co., Ltd. In addition to the above, it is the plan of the Group to initially recruit 25 employees

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to support the development and expansion of the Web3.0 business including the Analysis Platform and the DEX Aggregator, with an intention to expand to 60 employees subject to the growth of the customer number and transaction volume. The recruitment will focus on various key areas including software engineering, AI or data science, security engineering, customer support and marketing and sales. With the extensive management experience of the existing management of the Group, together with the above recruitment plan, it is believed that the Group would have the necessary expertise and resources to develop the Web3.0 business effectively.

The Group plans to initially internally develop the Analysis Platform and the DEX Aggregator, while it may also engage in different ways to accelerate or expand product development and launch, such as through joint ventures etc., subject to the prevailing market conditions. Taking into account that no regulatory approval is required for the operation in Web3.0 developed regions, the Analysis Platform and the DEX Aggregator are expected to be ready for launch around three months after the Completion, followed by a trial operation and refinement period of approximately one year. It is expected that the allocated amount of approximately HK$11,646,000 based on the maximum net proceeds from the Placing of approximately HK$33,272,938.0 would be sufficient for the Group for, among others, developing the Analysis Platform and the DEX Aggregator, covering equipment, personnel and other costs, while the Group may seek additional fundraising for expansion depending on the prevailing product development and market opportunities. The initial efforts of the development would focus on core functionalities, with subsequent expansions, aiming to capture the Web3.0 market through technical innovation and user experience. The Board is of the view that amid the continuous operations of the existing big data centres of the Group, the aforesaid intended applications of the net proceeds would allow the Group to foster the development of its Web3.0 business while capturing any potential opportunities from the generally increasing market trend, which is in the interests of the Company and the Shareholders as a whole.

Shareholders should note that completion of the Placing is subject to the satisfactions of the conditions precedent to the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

By order of the Board of
Crypto Flow Technology Limited
Li Hongbin
Chairman

Hong Kong, 28 February 2025

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As at the date of this announcement, the executive Directors are Mr. Li Hongbin, Mr. Huang Yibin and Ms. Xiong Jiayan; and the independent non-executive Directors are Mr. Sun Yuqiang, Mr. Chu, Howard Ho Hwa and Mr. Tong, I Tony.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this announcement 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 announcement misleading.

This 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.cryptoflowhk.com.

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