Graphex Group Limited — Capital/Financing Update 2022

Jan 10, 2022

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 any invitation to subscribe for any securities in Hong Kong, the United States or elsewhere, nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or invitation to subscribe for securities, and is provided for information only. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession the information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the laws of any such jurisdictions. Securities referred to in this announcement have not been issued, registered in accordance with any securities laws and regulations or allowed to be offered to public or to circulate in Hong Kong, the United States, or elsewhere. No representation is made that any such securities will be issued or so registered or allowed to be offered to the public or circulated in Hong Kong, the United States or elsewhere. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or an exemption from registration under the Securities Act. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the issuer and its management, as well as financial statements.

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GRAPHEX GROUP LIMITED 烯石電動汽車新材料控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 6128)

COMPLETION OF THE ISSUES OF SUBSEQUENT NOTE AND SUBSEQUENT WARRANT UNDER SPECIFIC MANDATE

Reference is made to the announcements of Graphex Group Limited (the “ Company ”) dated 19 January 2021, 28 January 2021, 29 January 2021, 1 February 2021, 1 March 2021, 15 March 2021, 12 April 2021, 26 April 2021, 10 May 2021, 24 May 2021, 27 May 2021, 7 June 2021, 30 June 2021, 14 July 2021, 21 July 2021, 23 July 2021, 24 August 2021 and 10 September 2021 (the “ Announcements ”) and the circular of the Company dated 30 June 2021 (the “ Circular ”) in relation to the Subscription. Unless the context requires otherwise, capitalised terms used herein shall have the same meanings as those defined in the Announcements and Circular.

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COMPLETION OF THE ISSUE OF SUBSEQUENT NOTE

The Company is pleased to announce that the Company has on 10 January 2022 issued a Subsequent Note in the principal amount of US$6,910,000 due in 2024 to the Subscriber (the “ Subsequent Note ”) which entitles the Noteholder to convert into 82,338,461 Conversion Shares at the initial Conversion Price of HK$0.65 per Conversion Share.

The net proceeds arising from the issue of the Subsequent Note shall all be applied to the redemption of the Company’s outstanding debt securities issued to third parties and the general working capital of the Group.

The approval for the listing of, and the permission to deal in 82,388,461 Conversion Shares upon conversion of the Subsequent Note has been granted by the Listing Committee of the Stock Exchange.

COMPLETION OF THE ISSUE OF SUBSEQUENT WARRANT

The Company is pleased to announce that the Company has on 10 January 2022 issued the Subsequent Warrant to the Subscriber.

The Subsequent Warrant is issued by the Company to the Subscriber at the Warrant Purchase Price of US$1.00, which entitles the Warrantholder to exercise the Warrant Subscription Right of up to the Subsequent Warrant Amount of US$3,455,000 worth of Warrant Shares equivalent to 41,194,230 Warrant Shares at the initial Warrant Exercise Price of HK$0.65 per Warrant Share.

The approval for the listing of, and the permission to deal in 41,194,230 Warrant Shares upon exercise the Warrant Subscription Right of the Subsequent Warrant has been granted by the Listing Committee of the Stock Exchange.

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EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

For illustration purpose only, set out below is a table showing the shareholding structure of the Company (i) as at the date of this announcement; (ii) immediate upon the allotment and issuance of all Conversion Shares at the initial Conversion Price under the outstanding Other Initial Notes and the Subsequent Note; and (iii) immediate upon the allotment and issuance of all Conversion Shares at the initial Conversion Price under the outstanding Other Initial Notes, the Subsequent Note and all Warrant Shares at the initial Warrant Exercise Price under the Initial Warrant and the Subsequent Warrant:

Shareholders Chan Yick Yan Andross (Note 1) PBLA Limited Lau Hing Tat Patrick (Note 2) The Subscriber (Note 3) EMA (Note 5) Other Public Shareholders Total	As at the date of this announcement Immediately upon the allotment and issuance of all Conversion Shares at the initial Conversion Price under the outstanding Other Initial Notes and the Subsequent Note For illustration purpose only, immediate upon the allotment and issuance of all Conversion Shares at the initial Conversion Price under the outstanding Other Initial Notes, the Subsequent Note and all Warrant Shares at the initial Warrant Exercise Price under the Initial Warrant and the Subsequent Warrant (Note 4) Number of Shares Approximate (%) Number of Shares Approximate (%) Number of Shares Approximate (%) 97,920,887 19.23 97,920,887 14.81 97,920,887 13.05 75,223,669 14.78 75,223,669 11.38 75,223,669 10.02 55,215,444 10.85 55,215,444 8.35 55,215,444 7.36 20,865,383 4.10 166,923,075 25.25 256,346,151 34.15 — — 5,961,538 0.90 5,961,538 0.79 259,891,538 51.04 259,891,538 39.31 259,891,538 34.63 509,116,921 100 661,136,151 100 750,559,227 100	As at the date of this announcement Immediately upon the allotment and issuance of all Conversion Shares at the initial Conversion Price under the outstanding Other Initial Notes and the Subsequent Note For illustration purpose only, immediate upon the allotment and issuance of all Conversion Shares at the initial Conversion Price under the outstanding Other Initial Notes, the Subsequent Note and all Warrant Shares at the initial Warrant Exercise Price under the Initial Warrant and the Subsequent Warrant (Note 4) Number of Shares Approximate (%) Number of Shares Approximate (%) Number of Shares Approximate (%) 97,920,887 19.23 97,920,887 14.81 97,920,887 13.05 75,223,669 14.78 75,223,669 11.38 75,223,669 10.02 55,215,444 10.85 55,215,444 8.35 55,215,444 7.36 20,865,383 4.10 166,923,075 25.25 256,346,151 34.15 — — 5,961,538 0.90 5,961,538 0.79 259,891,538 51.04 259,891,538 39.31 259,891,538 34.63 509,116,921 100 661,136,151 100 750,559,227 100
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Notes

1. Mr. Chan Yick Yan Andross, an executive Director and the chief executive officer of the Company, holds 4,204,000 Shares by himself and 93,716,887 Shares through CYY Holdings Limited, a company wholly owned by him.

2. Mr. Lau Hing Tat, Patrick, the chairman and an executive director of the Company, holds 7,232,000 Shares by himself, 46,003,444 Shares through LSBJ Holdings Limited, a company wholly owned by him and is interested in 1,980,000 Shares held by his spouse.

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1. On 10 November 20,865,383 Conversion Shares were allotted and issued by the Company to the Subscriber at the Conversion Price of HK$0.65 per Conversion Share following the exercise by the Subscriber of the Conversion Rights attached to Convertible Notes with an aggregate principal amount of US$1,750,000.

2. Under the conditions of both the Convertible Notes and the Warrants, the exercise of the Conversion Rights and the Warrant Subscription Rights are restricted should the exercise of such rights may result in (i) the Company not fulfilling the public float requirements under rule 8.08 of the Listing Rules; or (ii) result in the holder of Convertible Notes or Warrants triggering a mandatory offer obligation under rule 26 of the Takeovers Code on the part of the holders of the Convertible Notes or the Warrants and any parties acting in concert with it (as defined in the Takeovers Code).

3. EMA and its ultimate beneficial owner being independent investors are not connected to the Subscriber and being Independent Third Parties are being classified as public Shareholders.

GENERAL

Unless specified the otherwise, conversion of US$ into HK$ is based on the exchange rate of US$1.00 to HK$7.75. The exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or other rates or at all.

By Order of the Board Graphex Group Limited Lau Hing Tat Patrick Chairman

Hong Kong, 10 January 2022

As at the date of this announcement, the executive Directors are Mr. Lau Hing Tat Patrick, Mr. Chan Yick Yan Andross, Mr. Yang Liu and Mr. Qiu Bin; the non-executive Director is Mr. Ma Lida; and the independent non-executive Directors are Ms. Tam Ip Fong Sin, Mr. Wang Yuncai, Mr. Liu Kwong Sang, Mr. Tang Zhaodong and Mr. Chan Anthony Kaikwong.

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