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Flowing Cloud Technology Ltd Share Issue/Capital Change 2025
51007_rns_2025-04-30_fdd5894d-3fb3-4fec-bb76-9e77d94dbb84.pdf
Share Issue/Capital Change
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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 purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.
艺术云动
FLOWING CLOUD
Flowing Cloud Technology Ltd
飛天雲動科技有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 6610)
PLACING OF NEW SHARES UNDER GENERAL MANDATE
Placing Agent
PLACING OF NEW SHARES UNDER GENERAL MANDATE
The Board announced that on April 30, 2025 (after trading hours), the Company entered into the Placing Agreement with the Placing Agent, pursuant to which the Company appointed the Placing Agent as its agent to procure not less than six Places to subscribe for up to 361,000,000 Placing Shares at a price of HK$0.201 per Placing Share on a best effort basis pursuant to the terms and conditions set out in the Placing Agreement. The Placing Shares will be allotted and issued under the General Mandate.
The 361,000,000 Placing Shares represents (i) approximately $19.99\%$ of the existing issued share capital of the Company (excluding Shares to be canceled and treasury Shares) as of the date of this announcement; and (ii) approximately $16.66\%$ of the issued share capital of the Company (excluding Shares to be canceled and treasury Shares) as enlarged by the allotment and issue of the Placing Shares (assuming there is no change in the number of issued Shares between the date of the Placing Agreement and the Completion Date).
Assuming that all the Placing Shares are fully placed, the maximum gross proceeds from the Placing will be approximately HK$72.56 million. It is expected that the net proceeds from the Placing (after deducting the placing commission payable to the Placing Agent and other expenses incurred in the Placing) will amount to approximately HK$71.62 million.
The Placing is conditional upon the Listing Committee of the Stock Exchange granting or agreeing to grant the approval for the listing of, and permission to deal in, the Placing Shares.
Completion of the Placing is subject to the satisfaction of the condition precedent under the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.
THE PLACING AGREEMENT
Date: April 30, 2025 (after trading hours)
Parties:
(i) Issuer: The Company
(ii) Placing Agent: CNI Securities Group Limited
To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owner(s) are independent of and not connected with the Company and its connected persons.
Principal terms of the Placing Agreement
Placees and Placing Shares:
The Company has agreed to appoint the Placing Agent as its agent to procure not less than six Placees (who and whose ultimate beneficial owners shall be independent of and not connected with the Company and its connected persons) to subscribe for up to 361,000,000 Placing Shares at a price of HK$0.201 per Placing Share on a best effort basis. It is expected that none of the Placees will become a substantial shareholder of the Company after Completion.
The 361,000,000 Placing Shares represents (i) approximately 19.99% of the existing issued share capital of the Company (excluding Shares to be canceled and treasury Shares) as of the date of this announcement; and (ii) approximately 16.66% of the issued share capital of the Company (excluding Shares to be canceled and treasury Shares) as enlarged by the allotment and issue of the Placing Shares (assuming there is no change in the number of issued Shares between the date of the Placing Agreement and the Completion Date). The maximum aggregate nominal value of the Placing Shares under the Placing will be approximately US$3,610.
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Placing Price:
The price of HK$0.201 per Placing Share (exclusive of any brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy) was determined on an arm's length basis between the Company and the Placing Agent with reference to, among other things, the prevailing market price of the Shares and the liquidity of the Shares on the Stock Exchange. The Placing Price represents:
(a) a discount of approximately 19.60% to the closing price of HK$0.250 per Share as quoted on the Stock Exchange on the date of the Placing Agreement; and
(b) a discount of approximately 17.96% to the average closing price of HK$0.245 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the date of the Placing Agreement.
The Company will bear the costs and expenses of approximately HK$0.94 million in connection with the Placing and the net proceeds from the Placing is estimated to be approximately HK$71.62 million (assuming the Placing Shares are fully placed). As a result, the net price per Placing Share will be approximately HK$0.20.
Placing Commission:
The Placing Agent will receive a placing commission of 1% of the amount equals to the Placing Price multiplied by the number of the Placing Shares being successfully placed by the Placing Agent. The placing commission payable to the Placing Agent under the Placing Agreement was determined on an arm's length basis between the Company and the Placing Agent with reference to, among other things, the prevailing market commission rate for similar transactions, the size of the Placing and the price performance of the Shares.
Ranking of the Placing Shares:
The Placing Shares, when issued, will rank pari passu in all respects with other Shares in issue on the date of allotment and issue of the Placing Shares, and the Placing Shares, when issued and allotted, will be free from all liens, charges, encumbrances and the third party rights of whatever nature and together with all rights attaching to them as of the date of their allotment.
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Condition precedent to Completion:
The Placing is conditional upon the Listing Committee of the Stock Exchange granting or agreeing to grant the approval for the listing of, and permission to deal in, the Placing Shares.
Each of the Company and the Placing Agent shall use their respective best endeavors to procure the satisfaction of the condition precedent by May 14, 2025 or such other date as the parties may agree in writing (the “Long Stop Date”), but if the condition precedent shall not be so satisfied by the Long Stop Date, all liabilities of the Placing Agent and the Company shall cease and determine and none of the parties shall have any claim against the other in relation thereto (save in respect of any antecedent breach of any obligation under the Placing Agreement).
Completion:
Completion is expected to take place on the fourth Business Day after the date on which the condition precedent is satisfied or such other date as the Company and the Placing Agent may agree in writing.
Termination:
The Placing Agent may, in its reasonable opinion, after consultation with the Company, terminate the Placing Agreement by notice in writing to the Company at any time up to 8:00 a.m. on the Completion Date if:
(a) there is any material adverse change in national, international, financial, exchange control, political, economic conditions in Hong Kong which in the reasonable opinion of the Placing Agent would be materially adverse in the consummation of the Placing; or
(b) there is any breach of the warranties, representations and undertakings given by the Company in the Placing Agreement and such breach is considered by the Placing Agent on reasonable grounds to be materially detrimental in the context of the Placing; or
(c) there is any material adverse change (whether or not forming part of a series of changes) in market conditions which in the reasonable opinion of the Placing Agent would materially and prejudicially affect the Placing or makes it inadvisable or inexpedient for the Placing to proceed; or
(d) any statement contained in all announcements, circulars and annual report issued by the Company relating to the annual results of the Company for the year ended December 31, 2024 has become or been discovered to be untrue, incorrect or misleading in any material respect which in the opinion of the Placing Agent would be materially adverse in the consummation of the Placing.
Upon termination of the Placing Agreement, all liabilities of the Placing Agent and the Company shall cease and determine and none of the parties shall have any claim against the other party in relation thereto (save in respect of any antecedent breach of any obligation under the Placing Agreement).
GENERAL MANDATE
The Placing Shares will be allotted and issued under the General Mandate and therefore no Shareholders’ approval is required. Pursuant to the General Mandate, the total number of new Shares that the Directors are authorized to allot and issue is 362,000,000 new Shares. As of the date of this announcement, no Shares have been allotted and issued pursuant to the General Mandate.
APPLICATION FOR LISTING
Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Placing Shares.
FILING WITH REGULATORY AUTHORITIES IN THE PRC
After the Placing Shares are issued and listed on the Stock Exchange, the Company will file with the regulatory authorities in the PRC in accordance with the relevant applicable laws and regulations, including the CSRC Filing Rules.
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REASONS FOR AND BENEFITS OF THE PLACING
The Group is principally engaged in the provision of AR & VR marketing services, AR & VR content, integrated marketing services and relevant services. The Company is an investment holding company.
The Directors are of the view that the Placing can strengthen the financial position of the Group and provide additional working capital to the Group to meet any future development and obligations. The Placing also represents good opportunities to broaden the Shareholders' base and the capital base of the Company. The Board is of the view that the terms of the Placing Agreement (including the Placing Price and the placing commission) are fair and reasonable, and the Placing is in the interests of the Company and the Shareholders as a whole.
USE OF PROCEEDS FROM THE PLACING
Assuming that all the Placing Shares are fully placed, the maximum gross proceeds from the Placing will be approximately HK$72.56 million. It is expected that the net proceeds from the Placing (after deducting the placing commission payable to the Placing Agent and other expenses incurred in the Placing) will amount to approximately HK$71.62 million.
The Company intends to apply the net proceeds from the Placing for the purposes and in the amounts set forth below:
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approximately 60% of the net proceeds, or approximately HK$42.97 million, will be used for enhancing the R&D capabilities and improving services and products to (i) develop and optimize the Group's algorithms and data analysis capabilities; (ii) upgrade and iterate the AR&VR development engines; (iii) improve operational capabilities; (iv) develop AR&VR content business; and (v) cover the out-sourced R&D expenses;
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approximately 30% of the net proceeds, or approximately HK$21.49 million, will be used for enhancing sales and marketing function to (i) strengthen brand image through marketing effort; (ii) enhance brand awareness through online channels; and (iii) strengthen and optimize sales and marketing network, thereby enhancing the promotions of the Group's overseas markets; and
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approximately 10%, or approximately HK$7.16 million, of the net proceeds will be used for general working capital purposes.
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FUND RAISING ACTIVITIES DURING THE PAST TWELVE MONTHS
The Company has not conducted any other fund raising activities in the past twelve months immediately before the date of this announcement.
EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY
Assuming there is no change in the number of issued Shares between the date of this announcement and the Completion Date, below is the shareholding structure of the Company (i) as of the date of this announcement; and (ii) immediately after Completion:
| As of the date of this announcement | Immediately after Completion | |||
|---|---|---|---|---|
| Number of Shares | Approximate % of Shareholding | Number of Shares | Approximate % of Shareholding | |
| Director | ||||
| Mr. Wang Lei (“Mr. Wang”) (Note 1) | 669,821,900 | 37.09% | 669,821,900 | 30.91% |
| Public | ||||
| The Placee(s) | — | — | 361,000,000 | 16.66% |
| Other public Shareholders | 1,136,324,100 | 62.91% | 1,136,324,100 | 52.43% |
| Total (Note 2) | 1,806,146,000 | 100% | 2,167,146,000 | 100% |
Notes:
- Mr. Wang is the executive Director, chairman of the Board and the chief executive officer. As of the date of this announcement, Mr. Wang is interested in 669,821,900 Shares through Brainstorming Cafe Limited (“Brainstorming Cafe”). Brainstorming Cafe is owned as to approximately 30.00% by Wanglei Co., Ltd. (“Wang BVI”) and approximately 70.00% by Cyber Warrior Holdings Limited (“Cyber Warrior”). Wang BVI is wholly owned by Mr. Wang. Cyber Warrior is wholly owned by Vistra Trust (Singapore) Pte. Limited, the trustee of a discretionary trust established for estate planning purposes by Mr. Wang as the settlor and protector and Wang BVI as the beneficiary.
- The total number of issued Shares excludes Shares to be canceled and treasury Shares.
The Company confirms that, immediately after the completion of the Placing (assuming all the Placing Shares are successfully placed), the public float of the Company remains no less than 25% of the Company’s issued Shares (excluding Shares to be canceled and treasury Shares) as enlarged by the Placing (assuming there is no change in the number of issued Shares (excluding Shares to be canceled and treasury Shares) between the date of this announcement and the Completion Date).
GENERAL
Completion of the Placing is subject to the satisfaction of the condition precedent under the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.
DEFINITIONS
In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:
“AFRC” Accounting and Financial Reporting Council of Hong Kong
“AR” augmented reality, an interactive experience of a real-world environment where the objects that reside in the real world are enhanced by computer-generated perceptual information
“Beijing Flowing Cloud” Beijing Flowing Cloud Technology Co., Ltd.* (北京飛天雲動科技有限公司), a limited company established in the PRC on November 17, 2021 and an indirect wholly-owned subsidiary of the Company
“Board” the board of Directors
“Business Day(s)” any day (not being a Saturdays) on which licensed banks are generally open for business in Hong Kong throughout their normal business hours
“Company” Flowing Cloud Technology Ltd, an exempted company incorporated in the Cayman Islands with limited liability on June 24, 2021, whose shares are listed on the Main Board of the Stock Exchange (Stock Code: 6610)
“Completion” completion of the Placing
“Completion Date” the fourth Business Day after the date on which the condition precedent under the Placing Agreement is satisfied or such other date as the Company and the Placing Agent may agree in writing
“connected person(s)” has the meaning ascribed to it under the Listing Rules
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“Consolidated Affiliated Entities” the entities the Group controls through the Contractual Arrangements
“Contractual Arrangements” the series of contractual arrangements entered into by, among others, Beijing Flowing Cloud, the Consolidated Affiliated Entities and the Registered Shareholders (as defined in the Prospectus), the details of which are set out in the section headed “Contractual Arrangements” in the Prospectus
“CSRC” China Securities Regulatory Commission (中國證券監督管理委員會)
“CSRC Filing” the CSRC Filing Report and any relevant supporting materials to be filed with the CSRC
“CSRC Filing Report” the filing report of the Company in relation to the Placing and any transactions contemplated by the Placing Agreement to be filed with the CSRC pursuant to Article 13 of the CSRC Filing Rules
“CSRC Filing Rules” the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (《境內企業境外發行證券和上市管理試行辦法》) and supporting guidelines issued by the CSRC effective from March 31, 2023, as amended, supplemented or otherwise modified from time to time
“Director(s)” the director(s) of the Company
“General Mandate” the general mandate granted to the Directors pursuant to a resolution passed by the Shareholders at the annual general meeting of the Company convened and held on May 28, 2024 to allot and issue up to 362,000,000 new Shares
“Group” the Company, its subsidiaries and the Consolidated Affiliated Entities at the relevant time
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
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"Hong Kong"
the Hong Kong Special Administrative Region of the PRC
"Independent Third Party(ies)"
third parties who are independent of, and not connected with, the Company and its connected persons
"Listing Committee"
has the meaning ascribed to it under the Listing Rules
"Listing Rules"
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended from time to time
"Placee(s)"
any individual(s), corporations(s) and/or institutional or other professional investor(s) to be procured by the Placing Agent to subscribe for any of the Placing Shares pursuant to the Placing Agreement
"Placing"
the placing, on a best effort basis, of up to 361,000,000 Placing Shares by the Placing Agent pursuant to the terms and conditions set out in the Placing Agreement
"Placing Agent"
CNI Securities Group Limited, a licensed corporation for carrying on Type 1 (dealing in securities), Type 2 (dealing in futures contracts) and Type 4 (advising on securities) regulated activities under the SFO
"Placing Agreement"
the conditional placing agreement dated April 30, 2025 entered into between the Company and the Placing Agent in relation to the Placing
"Placing Price"
HK$0.201 per Placing Share (exclusive of any brokerage, SFC transaction levy, Stock Exchange trading fee and AFRC transaction levy)
"Placing Share(s)"
up to 361,000,000 new Shares, to be placed under the Placing
"PRC"
the People's Republic of China
"Prospectus"
the prospectus issued by the Company dated September 29, 2022
"R&D"
research and development
"SFC" the Securities and Futures Commission of Hong Kong
"SFO" Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong)
"Shares" ordinary share(s) with nominal value of US$0.00001 each in the share capital of the Company
"Shareholder(s)" holder(s) of Share(s)
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"substantial shareholder(s)" has the meaning as ascribed to it under the Listing Rules
"treasury Shares" has the meaning ascribed to it under the Listing Rules
"US$" United States dollars, the lawful currency of the United States of America
"VR" virtual reality, the computer generated simulation of a three-dimensional image or environment that can be interacted with in a seemingly real or physical way
"%" per cent
By order of the Board
Flowing Cloud Technology Ltd
Wang Lei
Chairman
Hong Kong, April 30, 2025
As of the date of this announcement, the Board comprises Mr. Wang Lei, Ms. Xu Bing and Mr. Li Yao as executive Directors and Mr. Jiang Yi, Mr. Tan Deqing and Ms. Chen Yuelin as independent non-executive Directors.
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