NOIZ Group Ltd. — Capital/Financing Update 2025

Jun 17, 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.

NOIZ GROUP LIMITED

聲揚集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8163)

SUPPLEMENTAL ANNOUNCEMENT

(1) DISCLOSABLE TRANSACTION IN RELATION TO THE ACQUISITION OF THE WEB 3.0 SOCIAL PLATFORM INVOLVING THE ISSUE OF CONSIDERATION SHARES UNDER GENERAL MANDATE; AND

(2) SUBSCRIPTION OF SHARES UNDER GENERAL MANDATE

Financial adviser to the Company

MERDEKA趙幢

References are made to the announcements of NOIZ Group Limited (the "Company") dated (i) 28 April 2025, in relation to, amongst other things, the Asset Purchase Agreement and the Subscription Agreement (the "Announcement"); and (ii) 30 May 2025, in relation to the extension of long stop dates of the Asset Purchase Agreement and the Subscription Agreement. Unless otherwise defined, capitalised terms used herein shall have the same meanings as those defined in the Announcement.

The Board wishes to provide the supplemental information in relation to the Acquisition.

BASIS OF THE DETERMINATION AND BOARD'S ASSESSMENT OF THE CONSIDERATION

Basis of determination of the Consideration

As set out in the Announcement, the Consideration of HK$9,000,000 was determined based on arm's length negotiations between the Purchaser and the Vendor with reference to, among others, (i) the development costs of approximately HK$10 million of LOOP Space; (ii) the prospect and future of LOOP Space which demonstrates strong potential for growth as a niche social platform; (iii) the Put Option mechanism provided by the Vendor; and (iv) the reasons for and benefits of the Acquisition.

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The Board has adopted cost replacement method to assess the Consideration. The cost replacement method, also referred as the cost approach, is formally recognised as one of the three principal valuation approaches under the International Valuation Standards (IVS), alongside the market approach and the income approach. The cost replacement method is particularly applicable when valuing early-stage technology platforms or digital assets, where the fair value is estimated based on the amount a market participant would need to pay to recreate or replace the asset with one of similar utility, quality, and functionality. In cases where (i) there are no observable market comparables, (ii) the asset is at an early stage of commercialisation, and (iii) the income approach, is not applicable due to insufficient financial data, the cost replacement method provides a practical and supportable basis for valuation.

As at the date of the Asset Purchase Agreement, (i) LOOP Space is in the pre-commercialisation stage, with its platform launched and user acquisition activities actively underway and has not yet commenced generating actual revenue; and (ii) the platform has not completed any external fundraising rounds, nor are there any available precedent transactions or observable market-based valuation references for comparable businesses at a similar developmental stage. Hence, with the lack of financial forecasts, historical revenue data, and market benchmarks, conventional valuation approaches, both discounted cash flow (DCF) analysis (income approach) and market comparables or precedent transaction analysis (market approach) are not considered appropriate. In light of these circumstances, the Company considered that the adoption of the cost replacement method as the primary basis for assessing the value of LOOP Space is acceptable and align with market standard.

Under cost replacement approach, the asset's value is estimated by aggregating the costs required to rebuild it from scratch. In such regard, the Board has obtained detailed documentation and representations from the Vendor, including a comprehensive breakdown of development expenditures, staffing structure, and technical specifications of the LOOP Space platform. The Board understands that the total development cost of LOOP Space is approximately HK$10,080,000 ("LOOP Development Costs"), encompassing the total compensation for the engineering, design, product management, and administrative staff directly engaged in the development of LOOP Space.

Save for the HK$10,080,000 LOOP Development Costs which relate to personnel expenses, the Vendor confirms that no other material development costs were incurred in connection with the creation and launch of LOOP Space.

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The Board’s decision to acquire LOOP Space was driven by its positive outlook on the prospects of social platforms with Web 3.0 elements. The Board further recognised that developing a comparable platform internally would be both time-consuming and resource-intensive particularly in the fast-evolving Web 3.0 market, where time is of the essence to achieving success. In contrast, LOOP Space was already available as a technically tested, professionally designed, and fully operational solution. Based on the due diligence procedures conducted by the Company as disclosed in the below section, it was noted that the personnel costs for the staffs involved in the development of LOOP Space are generally consistent with the market rates shown in salary data from reputable recruitment agencies. Following further consultation with the industry expert, the Board is of the view that developing a comparable application would require a similar level of expenditure as reflected in the LOOP Development Costs, and the Board understands that developing a similar application requires certain level of technological expertise, personnel resources, and time investment, all of which would reasonably result in costs comparable to those incurred for the LOOP Development Costs. Accordingly, the Consideration was principally based on the LOOP Development Costs incurred in building the platform.

Board’s assessment on the Consideration

Upon first identifying the potential of the project, the Company took an active interest in LOOP Space. Recognizing its prospects, to the Company (i) conduct research on LOOP Space and its broader industry landscape, with a view to comprehensively evaluating the market prospects and strategic positioning of the application; and (ii) reviewed of the breakdown of the development and related costs of LOOP Space obtained from the Vendor.

The Company conducted a thorough review of the development costs provided by the Vendor. The Company focused on conducting benchmarking and market research on remuneration levels for each category of personnel involved to ensure the reasonableness of the figures against publicly available salary data from leading recruitment firms, while the Company also concentrated on verifying the costs and to ensure the Acquisition complies with the accounting standard.

In addition, the Company held meetings with the Vendor’s technical team to conduct technical due diligence. During the session, the Vendor’s technical representatives provided explanations and walkthroughs of the source code and backend architecture of LOOP Space, enabling the Company to gain a clear understanding of the platform’s technical framework and operational integrity. After gaining a comprehensive understanding of the development costs and completing the technical review, the Company consulted an industry expert to validate the information and assumptions provided by the Vendor.

The Company also participated in a Web 3.0 industry event in Hong Kong where LOOP Space was being promoted, conducting on-site due diligence at the platform’s booth by observing live demonstrations and meeting the team. In addition, the Company actively engaged in LOOP Space’s livestream sessions through the mobile-app to directly assess user engagement and interaction. These experiences reinforced management’s positive assessment of the platform’s community dynamics and engagement levels.

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The Board is also fully aware of the inherent risks associated with investing in early-stage technology ventures. In light of this, the Company has negotiated a Put Option as part of the transaction structure. This provides the Company with a contractual exit mechanism, enabling it to require the Vendor to repurchase the Consideration Shares in the event that LOOP Space underperforms against agreed performance criteria. The inclusion of the Put Option serves as a risk-mitigation tool to protect Shareholders' interests and reflects the Board's prudent and commercially responsible approach in evaluating and structuring the Acquisition.

BUSINESS DEVELOPMENT OF LOOP SPACE

LOOP Space, integrates blockchain industry communities, digital gifting, 3D audio-visual social participation and AI-based systems, and offers a next-generation community experience through features similar to X App, Discord groups and Douyin.

While the Board acknowledges that LOOP Space remains at a pre-commercialisation stage, it has nevertheless accumulated a substantial user base, which the Board considers to be an added value to the Acquisition. As part of the due diligence process, the Company sought to quantify the value of this user base, referencing industry benchmarks for Customer Acquisition Cost ("CAC") and estimating the value attributable to LOOP Space's existing users at approximately US$215,000 (approximately HK$1.68 million). This user-derived value, while not forming the primary basis for the Consideration, provided additional commercial justification and confidence to the Board in proceeding with the transaction.

As at the date of this announcement, the registered user base and overall market exposure of LOOP Space have increased significantly following the successful livestream coverage of TOKEN2049 Dubai (a landmark event in the global crypto landscape held from April 30 to May 1, 2025, drawing over 15,000 attendees from more than 160 countries). In addition, LOOP Space conducted a broadcasting session at the Bitcoin Conference 2025 held in Las Vegas in late May 2025, further strengthening its global outreach and brand awareness among the international crypto community. As at the date of this announcement, LOOP Space has approximately 280,000 registered users, with its user base now extending to include coverage in Vietnam with approximately 15,000 registered users and Indonesia with approximately 8,000 registered users, respectively.

LOOP Space's monetization strategy is built on four core revenue streams, each designed to leverage platform engagement, creator activity, and community interaction:

1. Advertising Fees from Project Owners/Individual Users – Advertising fees paid by project owners represent a key revenue stream for LOOP Space. These fees are incurred by project teams or individual users seeking to enhance their visibility and outreach by securing promotional exposure on the platform. Through the purchase of advertising space, such users are able to leverage the platform's user base and community engagement to promote their offerings more effectively.

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1. Commission on Virtual Gifting – Users can purchase virtual gifts to reward or support content creators during livestream sessions. LOOP Space facilitates these transactions and charges a 25% commission on the value of each digital gift exchanged. This monetization model is commonly adopted in social media and livestreaming applications, where user engagement is a critical success factor. It creates a dynamic and interactive ecosystem in which users are encouraged to support their favourite creators, creators are motivated to produce high-quality content, and the platform benefits from recurring transaction-based income. This feedback loop effectively drives both platform activity and revenue growth.

2. Developer Ecosystem and Events – Revenue from developer ecosystem initiatives arises from the Group’s efforts to build an active and innovative community of third-party developers and ecosystem partners. These initiatives include hosting developer conferences, conducting technical training workshops, and offering support services that enable seamless integration with the LOOP Space platform.

Both offline and online events are viewed as crucial channels for expanding the platform’s reach, procuring target users from diverse sources, and enhancing brand exposure. Through these activities, LOOP Space not only promotes its technical capabilities and use cases, but also builds community loyalty, attracts ecosystem contributors, and generates monetizable opportunities via co-branded campaigns, developer tools, and ecosystem participation fees.

1. Revenue from sales of LOOP Token – Revenue from this segment is generated through the sale of LOOP tokens, the native utility token of the LOOP Space ecosystem. The LOOP token serves as the primary medium of exchange within the platform, enabling users to conduct a wide range of in-app transactions — such as purchasing virtual gifts, subscribing to premium content, tipping content creators, accessing exclusive features, and participating in sponsored campaigns or community events. The token model is designed to promote user engagement and support the development of a self-sustaining digital economy. Revenue is derived from both (i) the sale of LOOP tokens to users at a fixed exchange rate, and (ii) transaction fees or commissions imposed when users convert fiat currency into LOOP tokens or transact within the ecosystem. Each token-related transaction creates a monetizable touchpoint, allowing the platform to generate recurring revenue as user activity increases.

Recognising that Key Opinion Leaders (KOLs) play a pivotal role in user acquisition and retention, the LOOP Space team will actively pursue partnership arrangements with well-known KOLs across various content verticals. These KOLs will host regular livestream sessions and themed events on the platform, offering a diverse range of entertainment experiences to enhance user engagement and platform stickiness.

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In parallel, LOOP Space will continue to collaborate with high-profile industry events — similar to its participation in TOKEN2049 and Bitcoin Conference 2025 — to livestream major panels, conferences, and showcases directly within the app. These initiatives are designed to not only elevate the platform's content offering but also to extend audience reach by cross-connecting with other established platforms and distribution channels, thereby accelerating user growth and enhancing brand visibility in the Web 3.0 ecosystem.

LOOP Space has outlined a comprehensive functional development roadmap to support international expansion and long-term platform scalability. These initiatives include:

1. AI-Driven Multilingual Access: Implementing real-time AI translation and language processing capabilities to support cross-border user interaction and community inclusivity across major regional markets.
2. Cross-Platform Integration and Media Outreach: Expanding distribution by syndicating LOOP Space content across other major platforms (e.g. YouTube, X/Twitter, and Discord) to increase visibility and attract diversified user segments.
3. Open-Source Accessibility and AI Integration: Opening selected platform features to external developers via application programming interface (APIs) and software development kits (SDKs), while embedding AI tools to optimize content recommendations, moderation, and real-time engagement.
4. Strategic Partnerships with Crypto Exchanges: Collaborating with established digital asset exchanges to host co-branded events, increase token utility, and onboard crypto-native communities into the LOOP Space ecosystem.

These functional enhancements are intended to support LOOP Space's positioning as a next-generation Web 3.0 social platform and create sustained value across user, developer, and institutional layers.

The Company acknowledges that the successful implementation of the LOOP Space business plan, particularly the functional expansion, user acquisition efforts, and monetization roadmap, will require ongoing capital support. To reinforce its commitment and align its interests with those of the Shareholders, the Vendor has agreed to further subscribe for additional Shares, thereby closely tying its own benefit to the future performance of LOOP Space. This demonstrates the Vendor's willingness to share both the risks and rewards of execution, and provides the Board with additional confidence in the long-term strategic value of the Acquisition.

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In light of (i) the cost replacement method is an appropriate valuation methodology to assess the value of LOOP Space given the insufficient availability of market comparable and financial data of the platform; (ii) the Consideration of HK$9,000,000 represents approximately 10% discount to the development costs of LOOP Space of approximately HK$10,080,000 (which has been verified by the Company as mentioned in this announcement); (iii) the Put Option mechanism offers protection to the Company's interests in the event LOOP Space underperforms; (iv) the positive outlook for the prospects and further development of the LOOP Space platform; and (v) the Vendor's willingness to subscribe for additional Shares as general working capital for the development of LOOP Space, the Board is of the view that the terms of the Acquisition (including the Consideration) are fair and reasonable, and in the interests of the Company and its shareholders as a whole.

By order of the Board
NOIZ GROUP LIMITED
Wong Hin Shek
Chairman and Chief Executive Officer

Hong Kong, 17 June 2025

As at the date of this announcement, the executive Director is Mr. Wong Hin Shek (Chairman and Chief Executive Officer); and the independent non-executive Directors are Ms. Ng Ka Sim, Casina, Mr. Wong Wing Kit and Ms. Yeung Mo Sheung, Ann.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited 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 seven days from the date of its publication and on the Company's website at www.noiz-group.com.

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