Joy Spreader Group Inc. — Capital/Financing Update 2018

Sep 3, 2018

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.

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AGTech Holdings Limited 亞博科技控股有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock Code: 8279)

INSIDE INFORMATION

FORMATION OF JOINT VENTURE IN MACAU

On 3 September 2018, Star N Cloud, a 30% indirectly owned associated company of the Company, entered into the Shareholders’ Agreement with the JV Company, Alipay (Macau) Holding and Alipay (Macau) Investment in relation to the formation of the JV Company in Macau. The JV Company will be principally engaged in banking and related activities.

This announcement is made by the Company pursuant to Rule 17.10(2) of the GEM Listing Rules and the Inside Information Provisions (as defined in the GEM Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The Board is pleased to announce that, on 3 September 2018, Star N Cloud, a 30% indirectly owned associated company of the Company, entered into the Shareholders’ Agreement with the JV Company, Alipay (Macau) Holding and Alipay (Macau) Investment in relation to the formation of the JV Company in Macau. The JV Company will be principally engaged in banking and related activities.

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The initial share capital of the JV Company shall be MOP100 million (equivalent to approximately HK$97.1 million), which shall be contributed as to (i) MOP33.3 million (equivalent to approximately HK$32.3 million) by Star N Cloud, of which MOP9.99 million (equivalent to approximately HK$9.7 million) will be financed by the Group’s internal cash resources (other than the proceeds from the Subscription) (in proportion to the Group’s 30% shareholding in Star N Cloud), (ii) MOP33.4 million (equivalent to approximately HK$32.4 million) by Alipay (Macau) Holding and (iii) MOP33.3 million (equivalent to approximately HK$32.3 million) by Alipay (Macau) Investment, respectively. Upon completion of the initial capital contribution, the JV Company shall be owned as to 33.3% by Star N Cloud, 33.4% by Alipay (Macau) Holding and 33.3% by Alipay (Macau) Investment, respectively.

In connection with the formation of the JV Company, Star N Cloud and Alipay HK entered into the Call Option Agreement on 3 September 2018, pursuant to which Star N Cloud granted Alipay HK the Option to acquire from Star N Cloud the Option Shares at any time commencing on the second anniversary of the formation of the JV Company. The exercise price of the Option will be equal to the fair market value of the Option Shares at the time of exercise of the Option, which shall be paid by Alipay HK to Star N Cloud on the date falling ten business days after the service of the exercise notice by Alipay HK to Star N Cloud (the “ Option Completion Date ”). Completion of the sale and purchase of the Option Shares under the Call Option Agreement shall take place on the Option Completion Date and is conditional upon obtaining customary regulatory approval and approval from the shareholders of the Company, if required. Assuming the Option is exercised by Alipay HK, Star N Cloud will have disposed of its 8.3% of the issued share capital of the JV Company and will hold effectively 25% of the issued share capital of the JV Company.

Information on the parties to the Shareholders’ Agreement and the Call Option Agreement

Star N Cloud is a private company incorporated in Macau with limited liability and is a 30% indirectly owned associated company of the Company. It is an investment holding vehicle with no other business activities and the only material asset will be its equity interest in the JV Company. The Group is an integrated technology and services provider, principally engaged in the lottery and mobile games and entertainment market.

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Alipay (Macau) Holding is a holding company.

Alipay (Macau) Investment is a holding company.

Alipay HK is a holding company of each of Alipay (Macau) Holding and Alipay (Macau) Investment. Alipay HK is an indirect wholly-owned subsidiary of Ant Financial. The controlling shareholder of the Company, Ali Fortune, is indirectly held as to 60% by Alibaba Group Holding Limited and as to 40% by Ant Financial.

As at the date of this announcement, the formation of the JV Company has been approved by the relevant government of Macau and the business license of the JV Company was issued on 24 August 2018.

Reasons and benefits for the entering into of the Shareholders’ Agreement and the Call Option Agreement

The terms of the Shareholders’ Agreement and the Call Option Agreement were negotiated on an arm’s length basis between the parties involved. The Board believes that the formation of the JV Company provides the Company a good investment opportunity to participate in a stable business in Macau. It also enables the Company to further build up its business networks in various aspects and develop more business opportunities in Macau and overseas. The co-investment structure with Alipay (Macau) Holding and Alipay (Macau) Investment also reduces the level of risk exposure for the Group’s indirect investment in the JV Company. The core businesses of the Group (i.e., lottery and games and entertainment) remain unchanged.

GEM Listing Rules Implications

Since the Company holds an indirect 30% equity interest in Star N Cloud, and Star N Cloud only owns 33.3% of the issued share capital of the JV Company, both Star N Cloud and the JV Company will not be treated as subsidiaries of the Company. Accordingly, the transactions contemplated under the Shareholders’ Agreement and the Call Option Agreement do not constitute notifiable transactions for the Company under Chapter 19 of the GEM Listing Rules and the financial results of both Star N Cloud and the JV Company will not be consolidated into financial statements of the Group.

For the Group’s investment in Star N Cloud, the Group has contributed a total of MOP9.99 million in cash for an indirect 30% equity interest in Star N Cloud. As all the applicable percentage ratios (as defined under the GEM Listing Rules) for such investment are less than 5%, the Group’s investment in Star N Cloud does not constitute a notifiable transaction for the Company under Chapter 19 of the GEM Listing Rules.

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As disclosed in the announcement of the Company dated 23 March 2017, Ant Financial (a 40% substantial shareholder of the controlling shareholder of the Company, Ali Fortune) and its subsidiaries are deemed by the Stock Exchange as connected persons of the Company pursuant to Rule 20.17 of GEM Listing Rules. Accordingly, each of Alipay (Macau) Holding and Alipay (Macau) Investment, being an indirectly wholly-owned subsidiary of Ant Financial, is deemed as a connected person of the Company under the GEM Listing Rules. However, the Company only owns 30% of the issued share capital of Star N Cloud (with the remaining 70% equity interest of Star N Cloud being beneficially owned by a third party who is not a connected person of the Company), Star N Cloud will not be treated as a subsidiary of the Company and the transactions contemplated under the Shareholders’ Agreement and the Call Option Agreement do not constitute connected transactions for the Company under the Chapter 20 of the GEM Listing Rules.

Shareholders and potential investors of the Company should note that the completion of the transactions contemplated under the Call Option Agreement is subject to the fulfillment of the conditions precedent set out therein. Shareholders of the Company and potential investors are advised to exercise caution when dealing in the securities of the Company.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions shall have the following meanings when used herein:

“Ali Fortune” Ali Fortune Investment Holding Limited, the controlling shareholder of the Company “Alipay (Macau) Holding” 支付寶（澳門）控股一人有限公司 (Alipay (Macau) Holding Limited), a company incorporated under the laws of Macau with limited liability and a whollyowned subsidiary of Alipay HK

• “Alipay (Macau) Investment” 支付寶（澳門）投資一人有限公司 (Alipay (Macau) Investment Limited), a company incorporated under the laws of Macau with limited liability and a whollyowned subsidiary of Alipay HK

• “Alipay HK” Alipay (Hong Kong) Holding Limited, a company incorporated under the laws of Hong Kong with limited liability and a holding company of Alipay (Macau) Holding and Alipay (Macau) Investment

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“Ant Financial”	浙江螞蟻小微金融服務集團股份有限公司(Ant Small
	and Micro Financial Services Group Co., Ltd.*), a
	company incorporated under the laws of the PRC with
	limited liability

“Board” the board of Directors “Call Option Agreement” The call option agreement dated 3 September 2018 entered into between Star N Cloud and Alipay HK in relation to the granting of the Option by Star N Cloud to Alipay HK “Company” AGTech Holdings Limited, a company incorporated in Bermuda with limited liability and the issued shares of which are listed on GEM “connected person(s)”, each has the meaning ascribed to it under the GEM “controlling shareholder(s)”, Listing Rules “percentage ratio(s)” and “subsidiary(ies)” “Directors” the directors of the Company “GEM” GEM operated by the Stock Exchange “GEM Listing Rules” the Rules Governing the Listing of Securities on GEM of the Stock Exchange “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the PRC “JV Company” Xinghui Bank Limited (星匯銀行股份有限公司), a company incorporated under the laws of Macau “Macau” the Macau Special Administrative Region of the PRC “MOP” Macao Patacas, the lawful currency of Macau “Option” the call option granted by Star N Cloud to Alipay HK to acquire from Star N Cloud the Option Shares pursuant to the Call Option Agreement

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• “Option Shares”

• 83,000 shares in the capital of the JV Company, provided, however, if after the date of the Call Option Agreement, Star N Cloud acquires additional shares in the JV Company, the number of Option Shares shall be increased by the following: the number of additional shares, multiplied by 83,000 and divided by 333,000 (rounded to the nearest whole number)

• “PRC”

• the People’s Republic of China, which for the purpose of this announcement shall exclude Hong Kong, Macau and Taiwan

• “Shareholders’ Agreement”

• a shareholders’ agreement dated 3 September 2018 entered into among Star N Cloud, the JV Company, Alipay (Macau) Holding and Alipay (Macau) Investment in relation to the formation of the JV Company in Macau

• “Star N Cloud”

• Star N Cloud Network Intelligence Company Limited (星雲網絡科技有限公司), a company incorporated under the laws of Macau with limited liability and a 30% indirectly owned associated company of the Company

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

• “Subscription”

• the subscription for 4,817,399,245 new shares in the Company and convertible bonds of the Company in the aggregate principal amount of HK$712,582,483 by Ali Fortune, which was completed on 10 August 2016

• “%”

• per cent.

• For identification purpose only

By order of the Board AGTech Holdings Limited Sun Ho Chairman & CEO

Hong Kong, 3 September 2018

For the purposes of illustration only, any amount denominated in MOP in this announcement is translated into HK$ at the rate of MOP1 = HK$0.9709. Such translation should not be construed as a representation that the amounts in question have been, could have been or could be, converted at any particular rate at all.

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As at the date of this announcement, the Board comprises (i) Mr. Sun Ho and Mr. Zhou Haijing as executive Directors; (ii) Mr. Zhang Qin, Mr. Yang Guang, Mr. Ji Gang and Mr. Zou Liang as non-executive Directors; and (iii) Ms. Monica Maria Nunes, Mr. Feng Qing and Dr. Gao Jack Qunyao as independent non-executive Directors.

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 Company Announcements” page of the GEM website operated by the Stock Exchange at www.hkgem.com for at least seven days from the day of its posting and will be published on the website of the Company at www.agtech.com.

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