OSL Group Limited - Proxy Solicitation & Information Statement 2020

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all of your shares in BC Technology Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee, or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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

BC TECHNOLOGY GROUP LIMITED B C 科技集團有限 `公` 司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 863)

(1) SUBSCRIPTION OF NEW SHARES AND CONVERTIBLE NOTE UNDER SPECIFIC MANDATE

(2) ISSUE OF UNLISTED WARRANT UNDER SPECIFIC MANDATE AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the EGM to be held at 39/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong, at 10:00 a.m. on Wednesday, 17 June 2020 is set out on pages 36 to 38 of this circular of the Company. A form of proxy for the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete and return the enclosed form of proxy to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of a form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish, and in such event, the form of proxy will be deemed to be revoked.

PRECAUTIONARY MEASURES FOR THE EGM

Please see page ii of this circular for measures to be implemented at the EGM to safeguard the health and safety of Shareholders and prevent the spread of the coronavirus (COVID-19) pandemic, including:

. mandatory body temperature checks
. wearing of surgical face masks
. no distribution of refreshments or corporate gifts

Any person who does not comply with the precautionary measures may be denied entry into the EGM venue. The Company reminds all Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights and would like to encourage Shareholders to appoint the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM, instead of attending the EGM in person.

1 June 2020

CONTENTS

	Page
PRECAUTIONARY MEASURES FOR THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iii
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36

– i –

PRECAUTIONARY MEASURES FOR THE EGM

To safeguard the health and safety of Shareholders and prevent the spread of the coronavirus (COVID-19) pandemic, the following measures will be implemented at the EGM:

. Each attendee will be required to undergo a mandatory body temperature check. Any person with a body temperature above 37.4 degrees Celsius, or who is exhibiting flulike symptoms, will be denied entry into the EGM venue.
. Shareholders, proxies and other attendees are required to wear surgical face masks inside the EGM venue at all times, and maintain a safe distance between seats. Any person who does not comply with this requirement will be required to leave the EGM venue.
. No refreshments will be served at the EGM, and there will be no corporate gifts.

The Company reminds all Shareholders that any person who is subject to any quarantine order prescribed by the Hong Kong SAR Government will be denied entry into the EGM venue, in order to ensure the health and safety of all attendees at the EGM.

Additionally, the Company reminds all Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights and would like to encourage Shareholders to appoint the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM, instead of attending the EGM in person.

If Shareholders have any questions relating to the EGM, please contact Tricor Investor Services Limited, the Company’s Hong Kong branch share registrar, as follows:

Tricor Investor Services Limited Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong Fax: (852) 2810 8185 E-mail: [email protected]

– ii –

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the 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: (i) the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive; and (ii) there are no other matters the omission of which would make any statement herein misleading.

– iii –

DEFINITIONS

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

‘‘Affiliate’’

with respect to the Subscriber or the Warrant Holder, any person controlling, controlled by or under common control with the Subscriber or the Warrant Holder (as the case may be) and for this purpose, control means the possession, directly or indirectly, of the power to direct the management and policies of the Subscriber or the Warrant Holder (as the case may be) whether through the ownership of voting securities, by contract or otherwise. The Subscriber or the Warrant Holder will be deemed to control any entity that is directly or indirectly more than 50% owned by the persons who directly or indirectly collectively own more than 50% of the Subscriber or the Warrant Holder (as the case may be)

‘‘Aggregate Available Warrant Shares’’
has the meaning ascribed to it under the section headed ‘‘Issue of Unlisted Warrant’’ in the Letter from the Board in this circular
‘‘Aggregate Transaction Value’’
the aggregate notional dollar value of transactions executed by the Warrant Holder and its Affiliates across all Company Trading Platforms during a particular Measurement Period
‘‘Average Daily Value’’
with respect to a particular Measurement Period, the Aggregate Transaction Value during such Measurement Period divided by 30
‘‘BC MarketPlace’’
BC MarketPlace Limited, a wholly-owned subsidiary of the Company
‘‘BC Warrant’’
the unlisted pre-paid warrant issued to the Subscriber by BC MarketPlace on 14 December 2018
‘‘Board’’
the board of Directors
‘‘Business Day’’
a day on which commercial banks in London and Hong Kong are generally open for business other than (i) Saturday and Sunday or a public holiday in London and/or Hong Kong, or (ii) a day on which commercial banks do not open for business owing to a tropical cyclone warning signal number 8 or above or a black rainstorm warning signal being in force in Hong Kong
‘‘Calendar Quarter’’
each period of three months commencing 1 January, 1 April, 1 July and 1 October in each calendar year
‘‘Commencement Date’’
the first day of the first Calendar Quarter following the issue date of the Warrant

– 1 –

DEFINITIONS

‘‘Company’’
BC Technology Group Limited (stock code: 863), the shares of which are listed on the Main Board of the Stock Exchange
‘‘Company Trading Platforms’’ each online digital asset trading platform operated (i) directly or indirectly by any member of the Group under the name of ANXONE or OSL; and (ii) by any third party with respect to which any member of the Group (1) has entered into any arrangement pursuant to which such member of the Group provides any intellectual property licenses and/or support services relating to the operation of such online digital asset trading platform; and (2) receives a share of the revenues with respect to such online digital asset trading platform
‘‘Completion’’ the consummation of the Subscription under the terms and conditions of the Subscription Agreement
‘‘Completion Date’’
the date on which the Completion occurs
‘‘connected person(s)’’
has the meaning ascribed to it in the Listing Rules
‘‘Conversion Price’’
the conversion price per Conversion Share at which Conversion Shares will be issued, being HK$9.52 per Conversion Share, subject to adjustment under the terms and conditions of the Convertible Note
‘‘Conversion Share(s)’’ the Share(s) which may fall to be allotted and issued upon exercise of the conversion right attaching to the Convertible Note
‘‘Convertible Note’’ the 5% convertible note due 2020 in the aggregate principal amount of HK$15,600,000 to be issued by the Company to the Subscriber under the terms and conditions of the Subscription Agreement
‘‘Corporate Action’’ (i) the declaration or making of any dividend or other distribution by the Company of any of its assets (or rights to acquire any of its assets) to all or substantially all of the Shareholders, by way of return of capital or otherwise; or (ii) the grant, issuance or sale by the Company of any options, convertible securities or rights to purchase shares, warrants, securities or other property in each case pro rata to all or substantially all of the Shareholders
‘‘Corporate Transaction’’ a sale, conveyance or other disposition of all or substantially all of the property or business of the Company or any subsidiary thereof, or a merger or consolidation with or into any other person or other business transaction or series of transactions as a result of which the Shareholders would hold less than a majority of the voting interests of the Company after the transaction

– 2 –

DEFINITIONS

‘‘Director(s)’’
‘‘EGM’’
‘‘Equity Conditions’’
‘‘Equity Conditions Measuring Period’’
the director(s) of the Company

an extraordinary general meeting of the Company to be convened and held at 39/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong, at 10:00 a.m. on Wednesday, 17 June 2020 to consider and, if thought fit, to approve, among others, the Subscription Agreement, the Warrant Subscription Agreement and the transactions contemplated thereunder, including the allotment and issue of the Subscription Shares, the Convertible Note, the Conversion Shares upon exercise of the conversion rights attaching to the Convertible Note, the Warrant and the Warrant Shares upon exercise of the subscription rights attaching to the Warrant

(i) during the Equity Conditions Measuring Period, all of the Conversion Shares are freely tradable under all applicable securities laws; (ii) during the Equity Conditions Measuring Period, the Shares are listed or designated for quotation (as applicable) on the Stock Exchange and shall not have been suspended from trading (other than suspensions of not more than two days and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or suspension by the Stock Exchange have been threatened or pending for any reason; (iii) all Conversion Shares may be issued in full without violating the Listing Rules; (iv) during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Corporate Transaction shall have occurred which has not been abandoned, terminated or consummated; (v) the Company shall have no knowledge of any fact that would reasonably be expected to cause the Conversion Shares to not be freely tradable; (vi) the Noteholder shall not be in possession of any information regarding the Group provided to it by any member of the Group or any of their respective affiliates, employees, officers, representatives, agents or the like that would restrict the ability of the Noteholder to freely trade in securities of the Company; and (vii) during the Equity Conditions Measuring Period, the Company shall not have breached any provision of any of the conditions of the Convertible Note, the Subscription Agreement or the Warrant

the period beginning one month prior to the applicable date of determination and ending on and including the applicable date of determination

– 3 –

DEFINITIONS

‘‘Equity Conditions Failure’’ with respect to a particular date of determination, that during the period commencing 20 Trading Days immediately prior to such date of determination, the Equity Conditions have not been satisfied (or waived in writing)
‘‘Exercise Period’’ has the meaning ascribed to is under the section headed ‘‘Issue of Unlisted Warrant’’ in the Letter from the Board in this circular
‘‘Expiration Date’’
the fifth Business Day immediately following the second anniversary of the issue date of the Warrant
‘‘Group’’ the Company and its subsidiaries
‘‘HK$’’ Hong Kong dollar, the lawful currency of Hong Kong
‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC
‘‘Jump’’ Jump Trading LLC
‘‘Jump Group’’ Jump and its affiliates
‘‘Latest Practicable Date’’
28 May 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular
‘‘Letter Agreement’’
a letter agreement dated 10 November 2019 entered into by the Company, OS Holdings, BC MarketPlace and the Subscriber for the repurchase of the OS CN and the BC Warrant
‘‘Listing Rules’’
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
‘‘Maximum Warrant Shares’’
the maximum number of 11,526,270 Warrant Shares which may fall to be allotted and issued upon exercise of the subscription right attaching to the Warrant
‘‘Measurement Period’’
each trailing 30 trading day period during the Warrant Measuring Period
‘‘Noteholder(s)’’
holder(s) of the Convertible Note
‘‘OS Holdings’’
OS Holdings Limited, a wholly-owned subsidiary of the Company

– 4 –

DEFINITIONS

‘‘OS CN’’

‘‘PRC’’
‘‘Previous Subscription Agreements’’
‘‘Sale of the Company’’

the convertible note in an aggregate principal amount of US$2,000,000 issued to the Subscriber by OS Holdings on 14 December 2018

the People’s Republic of China (for the purpose of this circular, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan)
the subscription agreement dated 14 December 2018 entered into between the Subscriber and OS Holdings relating to the OS CN and the subscription agreement dated 14 December 2018 entered into between the Subscriber and BC MarketPlace relating to the BC Warrant

any of the following:

(i) a merger or consolidation involving the Group as detailed under the terms of the Warrant;
(ii) either (1) the sale, lease, transfer, exclusive license or other disposition by any member of the Group of all or substantially all the assets of the Group (taken as a whole); or (2) the sale or disposition of one or more subsidiaries of the Company if substantially all of the assets of the Group (taken as a whole) are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly-owned subsidiary of the Company; or
(iii) either (1) the sale, transfer or issuance by the Company; or (2) the sale or transfer by Shareholders, in either case, of more than 50% of the voting power of the Company in a single transaction or series of related transactions
‘‘Share(s)’’
‘‘Shareholder(s)’’
‘‘Specific Mandate’’

the ordinary share(s) of HK$0.01 each in the share capital of the Company

holder(s) of the Shares

the specific mandate proposed to be granted by the Shareholders to the Directors at the EGM to allot and issue (i) the Subscription Shares and the Conversion Shares under the terms and conditions of the Subscription Agreement; and (ii) the Warrant Shares under the terms and conditions of the Warrant

– 5 –

DEFINITIONS

‘‘Stock Exchange’’
‘‘Subscriber’’
‘‘Subscriber Designee’’
‘‘Subscription’’
‘‘Subscription Agreement’’
‘‘Subscription Price’’
‘‘Subscription Shares’’
‘‘Termination Trigger Event’’
‘‘Total Warrant Price’’
‘‘Trading Day’’
‘‘Triggering Event’’

The Stock Exchange of Hong Kong Limited

J Digital 5 LLC
any person or entity designated by the Subscriber to take up the Warrant Shares
the subscription by the Subscriber for the Subscription Shares and the Convertible Note under the terms and conditions of the Subscription Agreement
the subscription agreement dated 10 November 2019 entered into between the Company and the Subscriber in respect of the Subscription as amended and/or supplemented by a supplemental subscription agreement dated 8 February 2020, a second supplemental subscription agreement dated 25 March 2020 and a third supplemental subscription agreement dated 7 May 2020
HK$7.42 per Subscription Share
1,051,213 new Shares to be subscribed by the Subscriber and to be allotted and issued by the Company under the terms and conditions of the Subscription Agreement
the Aggregate Transaction Value does not place the Warrant Holder and its Affiliates in the top 3 third-party customers of the Company (i) in a particular Calendar Quarter after the Commencement Date; and (ii) the immediately following Calendar Quarter
the aggregate of the Warrant Issue Price and the exercise price of HK$0 of the Warrant
as applicable, (i) with respect to all price determinations relating to the Shares, any day on which the Shares are traded on the Stock Exchange, provided that ‘‘Trading Day’’ shall not include any day on which the Shares are scheduled to trade on such exchange for less than 4.5 hours or any day that the Shares are suspended from trading during the final hour of trading on such exchange unless such day is otherwise designated as a Trading Day in writing by the Noteholder; or (ii) with respect to all determinations other than price determinations relating to the Shares, any day on which the Stock Exchange is open for trading of securities.
any of the following: (i) a Sale of the Company; or (ii) a liquidation, dissolution or winding up of the Company

– 6 –

DEFINITIONS

‘‘Undertaking’’
an undertaking dated 25 March 2020 executed by the Subscriber in favour of the Company in respect of certain Warrant Shares
‘‘US$’’
United States dollar, the lawful currency of the United States of America
‘‘Warrant’’
the unlisted warrant to be issued by the Company to the Subscriber pursuant to the Warrant Subscription Agreement, entitling the Warrant Holders to subscribe for up to the maximum number of 11,526,270 Warrant Shares
‘‘Warrant Completion’’
the consummation of the Warrant Issuance under the terms and conditions of the Warrant Subscription Agreement
‘‘Warrant Completion Date’’
the date on which the Warrant Completion occurs
‘‘Warrant Holder(s)’’ holder(s) of the Warrant
‘‘Warrant Issuance’’
the issuance of the Warrant by the Company to the Subscriber under the terms and conditions of the Warrant Subscription Agreement
‘‘Warrant Issue Price’’
HK$78,000 in total, the issue price of the Warrant
‘‘Warrant Measuring Period’’
the period commencing on the issue date of the Warrant and ending on the earlier of (i) the day immediately preceding the 24-month anniversary of the issue date of the Warrant; and (ii) the second Business Day following the delivery to the Warrant Holder of a written notice pursuant to which the Company validly elects to end such period as a result of the occurrence of a Termination Trigger Event
‘‘Warrant Share(s)’’
the Share(s) which may fall to be allotted and issued upon exercise of the subscription right attaching to the Warrant
‘‘Warrant Subscription Agreement’’
the warrant subscription agreement dated 10 November 2019 entered into between the Company and the Subscriber in respect of the Warrant Issuance as amended and/or supplemented by a supplemental warrant subscription agreement dated 8 February 2020, a second supplemental warrant subscription agreement dated 25 March 2020 and a third supplemental warrant subscription agreement dated 7 May 2020
‘‘%’’

per cent

– 7 –

LETTER FROM THE BOARD

BC TECHNOLOGY GROUP LIMITED B C 科技集 `團` 有限公 `司`

(incorporated in the Cayman Islands with limited liability) (Stock code: 863)

Executive Directors: Mr. Lo Ken Bon Mr. Ko Chun Shun, Johnson Mr. Tiu Ka Chun, Gary Mr. Madden Hugh Douglas (Chief Executive Officer) Mr. Chapman David James

Independent Non-Executive Directors: Mr. Chau Shing Yim David Mr. Chia Kee Loong Lawrence Mr. Tai Benedict

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal Place of Business in Hong Kong: 39/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong 1 June 2020

To the Shareholders

Dear Sir/Madam,

SUBSCRIPTION OF NEW SHARES AND CONVERTIBLE NOTE UNDER SPECIFIC MANDATE, ISSUE OF UNLISTED WARRANT UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcements of the Company dated 10 November 2019 and 25 March 2020 in relation to, among other things, the Subscription and the Warrant Issuance.

The purpose of this circular is to provide you with, among other things, (i) details of the Subscription and the Warrant Issuance; and (ii) a notice convening the EGM.

– 8 –

LETTER FROM THE BOARD

SUBSCRIPTION OF NEW SHARES AND CONVERTIBLE NOTE

The principal terms of the Subscription Agreement are set out below:

Date: 10 November 2019 Parties: (i) the Company (ii) the Subscriber

The Company conditionally agreed to allot and issue, and the Subscriber conditionally agreed to subscribe for, in each case, subject to the Letter Agreement: (i) the 1,051,213 Subscription Shares for a total consideration of HK$7,800,000; and (ii) the Convertible Note in an aggregate principal amount of HK$15,600,000.

Subscription Shares and Subscription Price

The Subscription Shares represent (i) approximately 0.32% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 0.31% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares, the Conversion Shares and the Warrant Shares.

The aggregate nominal value of the 1,051,213 Subscription Shares is HK$10,512.13.

The Subscription Price of HK$7.42 per Subscription Share represents:

(i) a discount of approximately 8.73% to the closing price of HK$8.13 per Share as quoted on the Stock Exchange on the last trading day prior to the date of the Subscription Agreement; and
(ii) a premium of approximately 11.71% over the average closing price of approximately HK$6.642 per Share as quoted on the Stock Exchange for the five trading days immediately prior to the date of the Subscription Agreement.

The Subscription Price was determined after arm’s length negotiation between the Company and the Subscriber after taking into account (i) the prevailing market conditions; (ii) the recent price performance and liquidity of the Shares; (iii) the financial performance of the Company; (iv) the number of the Subscription Shares; and (v) the benefits of introducing the Subscriber as a strategic shareholder as detailed in the section headed ‘‘Reasons for and benefits of the Subscription and the Warrant Issuance and use of proceeds’’ in this Letter from the Board. The Board considers that the Subscription Price is fair and reasonable based on the current market conditions.

– 9 –

LETTER FROM THE BOARD

Principal terms of the Convertible Note

Issuer : The Company Principal amount : HK$15,600,000 in aggregate Interest rate : 5% per annum on the principal amount outstanding under the Convertible Note from time to time. If an event of default occurs, the interest rate shall automatically be increased to 10% per annum.
Maturity date : 31 December 2020 Status : The Convertible Note constitutes a general, unsecured and unsubordinated obligations of the Company and will rank pari passu with all other present and future unsecured and unsubordinated obligations of the Company.
Conversion : The Noteholder may convert all or any portion of the principal amount outstanding into Conversion Shares on or after the issue date of the Convertible Note up to the date falling one day prior to the maturity date.
Conversion Price : HK$9.52 per Conversion Share, subject to adjustments upon occurrence of any of the following events:
(i) issue of any bonus shares by the Company;
(ii) making of a dividend or distribution by the Company that is payable in Shares;
(iii) an alteration to the share capital structure of the Company as a result of consolidation or subdivision of the Shares;
(iv) grant, issue or sale of any options or convertible securities by the Company pro rata to all or substantially all of the Shareholders (i.e. all Shareholders except those Shareholder(s) who is resident in a place outside Hong Kong and whom the Directors consider it necessary or expedient not to offer the relevant rights on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place); and

– 10 –

LETTER FROM THE BOARD

(v) grant, issue or sale of any rights to purchase any shares, warrants, securities or other property by the Company pro rata to all or substantially all of the Shareholders (i.e. all Shareholders except those Shareholder(s) who is resident in a place outside Hong Kong and whom the Directors consider it necessary or expedient not to offer the relevant rights on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place).

In the case of (iv) above, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately before such issue, grant or sale (as the case may be) by the following fraction, effective on the date of such issue, grant or sale (as the case may be) of such options or convertible securities or where a record date is set, the first date on which the Shares are traded exrights or ex-options, as the case may be:

==> picture [85 x 30] intentionally omitted <==

Where:

A is the number of Shares in issue immediately before the date of the announcement of the terms of such issue, grant or sale (as the case may be);
B is the number of Shares which the aggregate amount (if any) payable for the options or convertible securities issued, granted or sold (as the case may be) would subscribe for, purchase or otherwise acquire at the current market price per Share on the date immediately before the date of the announcement of the terms of such issue, grant or sale (as the case may be); and
C is the aggregate number of Shares comprised in such issue, grant or sale (as the case may be) of options or convertible securities assuming such options or convertible securities are fully converted, exercised or exchanged (as the case may be) into Shares.

– 11 –

LETTER FROM THE BOARD

In the case of (v) above, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately before such issue, grant or sale (as the case may be) by the following fraction, effective on the date of such issue, grant or sale (as the case may be) of such rights or where a record date is set, the first date on which the Shares are traded ex-rights:

– (A B)

Where:

A is the current market price of one Share on the date on which such issue, grant or sale (as the case may be) is publicly announced; and
B is the fair market value on the date of such announcement of the portion of the rights attributable to one Share.
Redemption upon : The redemption amount shall be the sum representing 100% of the maturity principal amount of the outstanding Convertible Note plus all accrued and unpaid interest.
Early prepayment or redemption; mandatory conversion
: (a) The Company shall not redeem or repay all or any part of the Convertible Note prior to the maturity date without the consent of the Noteholder;
(b) Upon the consummation of a Corporate Transaction, the Company, at the option of the Noteholder, shall immediately repay all amounts outstanding under the Convertible Note; and

– 12 –

LETTER FROM THE BOARD

(c) If at any time after the two month anniversary of the issue date of the Convertible Note (the ‘‘Eligibility Date’’), (i) the closing price of the Share is equal to or greater than HK$14.39 per share (the ‘‘Trigger Price’’) for at least 15 Trading Days during any 30 consecutive Trading Days following the Eligibility Date; (ii) the aggregate dollar trading volume of the Shares for each Trading Day during the period in (i) above exceeds HK$39,000,000; and (iii) no Equity Conditions Failure shall have occurred, then the Company shall have the right to require the Noteholder to convert all outstanding Convertible Note (the ‘‘Mandatory Conversion’’). The Company may require conversion by delivering a written notice to the Noteholder (the ‘‘Mandatory Conversion Notice’’) which shall state the date selected for the Mandatory Conversion (the ‘‘Mandatory Conversion Date’’).

If (I) any Shares trade for a price less than the Trigger Price during the date of the Mandatory Conversion Notice up to the Trading Day immediately preceding the Mandatory Conversion Date; (II) the aggregate dollar trading volume of the Shares during the period in (I) above is less than HK$39,000,000; or (III) an Equity Conditions Failure occurs during the date of the Mandatory Conversion Notice up to the Mandatory Conversion Date which has not been waived, then the Mandatory Conversion Notice shall be null and void ab initio and the Mandatory Conversion shall not occur.

Under IFRS 7 — Financial Instruments: Disclosures, the liability component of the Convertible Note is measured at fair value based on, among others, the market price of the Shares. In the event that the market price of the Shares increases dramatically, the liabilities of the Company increase as well. However, such liabilities of the Company are capitalized into shareholders’ equity on conversion. The Mandatory Conversion is in place to protect the Company from any unexpected increase in the liabilities of the Company resulting from the dramatic increase in the market price of the Shares.

– 13 –

LETTER FROM THE BOARD

The Trigger Price of HK$14.39 per Share represents approximately 1.8 times of the closing price of HK$8.13 per Share on the last trading day prior to the date of the Subscription Agreement, and the aggregate dollar trading volume of HK$39,000,000 represents approximately 7.76 times of the average dollar trading volume of the Shares of HK$5,024,080 for the five trading days immediately prior to the date of the Subscription Agreement. The Trigger Price and the aggregate dollar trading volume of HK$39,000,000 were determined after arm’s length negotiation between the Company and the Subscriber taking into account (i) the impact of the liability component of the Convertible Note on the consolidated financial statements of the Company; and (ii) the potential upside for the Subscriber by becoming a Shareholder based on its belief in the future growth and prospects of the Company.

Transferability : The Convertible Note is transferable by the Noteholder (i) without the consent of the Company, to (x) any person following the occurrence of any event of default set out in the Subscription Agreement; or (y) any affiliate of the Noteholder; or (ii) with the consent of the Company, in all other cases. No transfer shall be made to a connected person of the Company or any person who will become a connected person of the Company as a result of such transfer without the prior approval of the Company.
Voting : The Noteholder, in its capacity as the holder of the Convertible Note, shall not be entitled to attend or vote at any general meeting of the Company.
Listing : No application will be made for the listing of the Convertible Note on the Stock Exchange.

An application will be made by the Company for the listing of, and permission to deal in, the Conversion Shares on the Stock Exchange.

Conversion Shares and Conversion Price

Based on the Conversion Price of HK$9.52 per Conversion Share, a maximum number of 1,638,655 Conversion Shares will be allotted and issued upon exercise of the conversion rights attaching to the Convertible Note in full, which represent (i) approximately 0.50% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 0.48% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares, the Conversion Shares and the Warrant Shares.

The aggregate nominal value of the 1,638,655 Conversion Shares is HK$16,386.55.

– 14 –

LETTER FROM THE BOARD

The Conversion Price of HK$9.52 per Conversion Share represents:

(i) a premium of approximately 17.10% over the closing price of HK$8.13 per Share as quoted on the Stock Exchange on the last trading day prior to the date of the Subscription Agreement; and
(ii) a premium of approximately 43.33% over the average closing price of approximately HK$6.642 per Share as quoted on the Stock Exchange for the five trading days immediately prior to the date of the Subscription Agreement.

The Conversion Price was determined after arm’s length negotiation between the Company and the Subscriber. The Board considers that the Conversion Price is fair and reasonable based on the current market conditions.

Conditions precedent

Completion of the Subscription is conditional upon the fulfillment of the following conditions:

(a) The obligation of the Company to allot and/or issue the Subscription Shares and the Convertible Note to the Subscriber at Completion is subject to the satisfaction, at or before the Completion Date, of the following conditions, provided that the following conditions are for the Company’s sole benefit and, in the case of paragraph (a)(iii) below, may be waived by the Company at any time in its sole discretion:
(i) The Company shall have obtained approval by the Shareholders in a special general meeting giving a specific mandate to the Directors for the allotment and issuance of the Subscription Shares, the Convertible Note, the Conversion Shares, the Warrant and the Warrant Shares;
(ii) The listing of, and permission to deal in, all of the Subscription Shares, the Conversion Shares and the Warrant Shares shall have been granted by the listing committee of the Stock Exchange (on an unconditional basis) and such listing and permission remaining in full force and effect and shall not have been subsequently revoked;
(iii) The representations and warranties of the Subscriber shall be true and correct in all material respects as of the date when made and as of the Completion Date as though originally made at that time, and the Subscriber shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Subscription Agreement to be performed, satisfied or complied with by the Subscriber at or prior to the Completion Date; and
(iv) All of the conditions precedent under the Warrant Subscription Agreement shall have been satisfied or waived (other than the conditions precedent therein requiring all of the conditions precedents set forth in the Subscription Agreement to be satisfied or waived).

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LETTER FROM THE BOARD

(b) The obligation of the Subscriber to subscribe for the Subscription Shares and the Convertible Note at Completion is subject to the satisfaction, at or before the Completion Date, of each of the following conditions, provided that the following conditions are for the Subscriber’s sole benefit and may be waived by the Subscriber at any time in its sole discretion (except that the conditions set forth in paragraphs (b)(ii) through (b)(v) below may not be waived by the Subscriber):
(i) Each and every representation and warranty of the Company shall be true and correct as of the date when made and shall be true and correct in all material respects as of the Completion Date as though originally made at that time and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Completion Date;
(ii) The Company shall have obtained approval by the Shareholders in a special general meeting giving a specific mandate to the Directors for the allotment and issuance of the Subscription Shares, the Convertible Note, the Conversion Shares, the Warrant and the Warrant Shares;
(iii) The Company shall have obtained all governmental and regulatory consents and approvals, if any, necessary for the issuance of the Subscription Shares and the issuance of the Conversion Shares upon conversion of the Convertible Note;
(iv) No law or injunction shall have been enacted, entered, promulgated or endorsed by any governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Subscription Agreement;
(v) The listing of, and permission to deal in, all of the Subscription Shares, the Conversion Shares and the Warrant Shares shall have been granted by the listing committee of the Stock Exchange (on an unconditional basis) and such listing and permission remaining in full force and effect and shall not have been subsequently revoked;
(vi) The Company shall have obtained all third-party consents and approvals, if any, necessary for the issuance of the Subscription Shares and the issuance of the Conversion Shares upon conversion of the Convertible Note (excluding any approval required from the Shareholders as contemplated by sub-paragraph (ii) above);
(vii) The listing status of the Company on the Stock Exchange shall not have been revoked or withdrawn, the Shares shall continue to be traded on the Stock Exchange (save and except for any temporary suspension in connection with the transactions contemplated under the Subscription Agreement) and there shall have been no indication from the Stock Exchange that the listing status of the Company will be suspended, cancelled, revoked or withdrawn; and

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LETTER FROM THE BOARD

(viii) Since the date of execution of the Subscription Agreement, no event or series of events shall have occurred that has or have resulted in or would reasonably be expected to have any material adverse effect in respect of the Group.

As at the Latest Practicable Date, the conditions set out above have not been fulfilled.

Termination

In the event that (i) Completion shall not have occurred by 30 June 2020 (or such other date as the parties may agree in writing); or (ii) the Company breaches the Subscription Agreement in any material respect prior to Completion, then the Subscriber shall have the right to terminate the Subscription Agreement at any time on or after the close of business on such date without liability of the Subscriber to the Company; provided, however, the right of the Subscriber to terminate the Subscription Agreement shall not be available to the Subscriber if the failure of the transactions contemplated under the Subscription Agreement to have been consummated by such date is the result of the Subscriber’s material breach of the Subscription Agreement.

The Subscription Agreement shall automatically be terminated simultaneously with a termination of the Warrant Subscription Agreement.

Completion

Completion of the Subscription shall take place on the first Business Day on which all conditions precedent have been satisfied or waived and shall occur simultaneously with the completion of the Warrant Issuance.

As detailed in the section headed ‘‘Reasons for and benefits of the Subscription and the Warrant Issuance and use of proceeds’’ in this Letter from the Board, it is the intention of the parties that the Completion of the Subscription, the Completion of the Warrant Issuance and the repurchases of the OS CN and the BC Warrant will take place simultaneously, upon when the Previous Subscription Agreements will be terminated.

Subscriber’s undertaking

The Subscriber undertakes to the Company that, for a period of 60 days following Completion, the Subscriber will not, and will procure any relevant person acting on its behalf not to, without the prior written consent of the Company:

(a) enter into a binding offer, pledge, issue, sell, contract to sell, sell any contract to purchase, or otherwise transfer or dispose of any of the Subscription Shares, the Convertible Note, the Conversion Shares or any interests thereof;
(b) enter into any swap or other similar arrangement or any transaction that transfers to another person, in whole or in part, directly or indirectly, any of the economic consequences of ownership of the Subscription Shares, the Convertible Note or any of the Conversion Shares;

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LETTER FROM THE BOARD

(c) agree to enter into or effect any transaction with the same economic effect as any of the transactions referred to in sub-paragraphs (a) or (b) above; and
(d) announce any intention to enter into or effect any of the transactions referred to in sub-paragraphs (a) to (c) above, where any of the foregoing transactions referred to in sub-paragraphs (a) to (c) above is to be settled by delivery of the Subscription Shares and the Convertible Note or such other securities, in cash or otherwise.

Notwithstanding anything contained above to the contrary, nothing in sub-paragraphs (a) to (d) above shall prohibit the Subscriber from taking any actions with respect to any of the Subscription Shares, the Convertible Note or any of the Conversion Shares in connection with a Corporate Transaction.

Ranking

The Subscription Shares and the Conversion Shares, when allotted and issued, will rank pari passu in all respects among themselves and with the Shares in issue.

Specific mandate

The Subscription Shares and the Conversion Shares will be allotted and issued under the Specific Mandate to be sought from the Shareholders at the EGM.

Listing application

An application will be made by the Company to the listing committee of the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares and the Conversion Shares on the Stock Exchange.

ISSUE OF UNLISTED WARRANT

The principal terms of the Warrant Subscription Agreement are set out below:

Date: 10 November 2019 Parties: (i) the Company (ii) the Subscriber

The Company conditionally agreed to issue to the Subscriber the Warrant conferring the rights onto the Warrant Holder to subscribe for a maximum number of 11,526,270 Warrant Shares.

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LETTER FROM THE BOARD

Principal terms of the Warrant

Issuer : The Company Warrant Issue Price : HK$78,000 in total

Number of Warrant : A maximum number of 11,526,270 Warrant Shares may be Shares issuable allotted and issued upon exercise of the Warrant in the manner set and exercise of out in the Warrant Subscription Agreement. Warrant

The Warrant may only be exercised during the Exercise Period (as detailed below) in respect of the number of Warrant Shares corresponding to the highest Average Daily Value Threshold (‘‘Aggregate Available Warrant Shares’’) as set out in the following sliding schedule (the ‘‘Sliding Schedule’’):

	Number of
Average Daily Value Threshold	Warrant
(‘‘ADVT’’) (in HK$)	Shares
100	508,787
7,800,000	2,991,752
15,600,000	3,940,032
23,400,000	4,888,312
31,200,000	5,836,591
39,000,000	6,784,871
46,800,000	7,733,151
54,600,000	8,681,431
62,400,000	9,629,710
70,200,000	10,577,990
78,000,000	11,526,270

Once the Average Daily Value reaches the respective threshold, the exercise price for the Warrant is HK$0. The Average Daily Value is determined as follows:

The Aggregate Transaction Value during Average the Measurement Period Daily Value = 30

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LETTER FROM THE BOARD

Exercise period : (i) with respect to a Triggering Event, the period commencing 10 (‘‘Exercise Business Days prior to the consummation of such Triggering Period’’) Event (i.e. completion of the Sale of the Company or the taking place of liquidation, dissolution or winding up of the Company) and ending immediately following the consummation of such triggering event; (ii) with respect to any Corporate Action, the period commencing on the first day immediately following such Corporate Action being approved by the Board and such information being published by the Company (if required) and ending immediately following the consummation of such Corporate Action; or (iii) in all other cases, (as applicable) (1) with respect to up to an aggregate of 508,787 Warrant Shares, the period commencing on the issue date of the Warrant and ending on the Expiration Date or (2) with respect to all other Warrant Shares issuable upon exercise of the Warrant, the period commencing on the first day immediately following the end of the Warrant Measuring Period and ending on the Expiration Date.

If the Aggregate Transaction Value does not place the Subscriber and its Affiliates in the top 3 third-party customers of the Company for two consecutive Calendar Quarters, a Termination Trigger Event would have occurred and the Company can elect to end the Warrant Measuring Period by way of written notice. In such case, the Warrant Holder’s right to further Warrant Shares would cease.

When considering whether to elect to end the Warrant Measuring Period, it is expected that the Company will take into account factors such as (and not limited to): (i) circumstances that may have contributed to or resulted in the occurrence of the Termination Trigger Event; (ii) the commercial value in, and the desirability of continuing to incentivise the Subscriber to provide liquidity to the Company Trading Platforms in a competitive manner at the time; and (iii) the commercial strategic value in maintaining and maximizing an alignment of interests between the Subscriber and the Company and its Shareholders.

In determining the Warrant Measuring Period, the Company and the Subscriber considered the 24-month period being a commercially acceptable period for the mutual interests of the Company and the Subscriber, and an appropriate period for increasing the liquidity of the Company Trading Platforms.

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LETTER FROM THE BOARD

Adjustments of : The number of Warrant Shares will be adjusted under the terms number of Warrant and conditions of the Warrant upon occurrence of any of the Shares following events: (i) issuance of any bonus Shares; and
(ii) subdivision and consolidation of Shares.
Transferability : The Warrant may not be offered for sale, sold, transferred or assigned without the consent of the Company, provided that the Warrant may be sold, transferred or assigned to an Affiliate of the Warrant Holder so long as such Affiliate is not a connected person of the Company.
Voting : The Warrant Holder, in its capacity as the holder of the Warrant, shall not be entitled to attend or vote at any general meeting of the Company.
Listing : No listing of the Warrant will be sought on the Stock Exchange or any other stock exchanges.

An application will be made by the Company for the listing of, and permission to deal in, the Warrant Shares on the Stock Exchange.

The Warrant Holder, in its capacity as the holder of the Warrant, is not a Shareholder, and does not enjoy any Shareholder rights (such as dividends, distributions, voting, etc). The Warrant Holder is an unsecured creditor on liquidation of the Company.

Warrant Shares and Total Warrant Price

The maximum number of 11,526,270 Warrant Shares represent (i) approximately 3.52% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 3.37% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares, the Conversion Shares and the Warrant Shares.

The aggregate nominal value of the 11,526,270 Warrant Shares is HK$115,262.7.

The Total Warrant Price of HK$0.0067 per Warrant Share (based on the maximum number of 11,526,270 Warrant Shares and the Total Warrant Price of HK$78,000) represents:

(i) a discount of approximately 100% to the closing price of HK$8.13 per Share as quoted on the Stock Exchange on the last trading day prior to the date of the Warrant Subscription Agreement; and
(ii) a discount of approximately 100% to the average closing price of approximately HK$6.642 per Share as quoted on the Stock Exchange for the five trading days immediately prior to the date of the Warrant Subscription Agreement.

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LETTER FROM THE BOARD

The Total Warrant Price (including the exercise price and the Sliding Schedule) were determined after arm’s length negotiation between the Company and the Subscriber and taking into account the benefits of introducing the Subscriber as a strategic shareholder and the direct quantitative benefits in the form of trading commissions or revenues resulting from client transaction volumes directly attributable to the liquidity provided by the Subscriber and its Affiliates as detailed in the section headed ‘‘Reasons for and benefits of the Subscription and the Warrant Issuance and use of proceeds’’ in this Letter from the Board. In particular, based on revenue models prepared by the Company (with reference to the historical transaction data and the projected revenue during the term of the Warrant) in relation to the commercial benefits expected to be derived from the liquidity provided by the Subscriber and its Affiliates to the Company Trading Platforms and with reference to the ADVT, it is expected that the accumulated revenue directly attributable to the liquidity resulting from the digital asset trading executed by the Subscriber and its Affiliates will fully offset the cost of the Warrant to the Company during the term of the Warrant. The Board considers that the Total Warrant Price is fair and reasonable.

Undertaking

Pursuant to the Undertaking, the Subscriber has undertaken to the Company that, among others, except in the case of a Triggering Event, it shall not, and it shall procure any person or entity acting on behalf of the Subscriber or any Subscriber Designee not to, pledge, sell, contract to pledge or sell, sell any contract to purchase or otherwise transfer or dispose of, create any options, rights, interests or encumbrances in respect of, either conditionally or unconditionally, or directly or indirectly, or otherwise, any of the Warrant Shares that are issued to the Subscriber or any Subscriber Designee upon its exercise of the Warrant during an Exercise Period that is triggered as a result of the Company undertaking a Corporate Action (or any additional Shares arising solely from such Warrant Shares thereafter as a result of any actions undertaken by the Company) until the first day immediately following the end of the Warrant Measuring Period.

In other words, pursuant to the Warrant Subscription Agreement and the Undertaking, if the Company undertakes any Corporate Action, the Warrant Holder can exercise the Warrant (to the extent of the Aggregate Available Warrant Shares accrued prior to such Corporate Action) immediately and such Warrant Shares would be subject to a lock-up period until the end of the Warrant Measuring Period (i.e. 24-month anniversary of the issue date of the Warrant or on an earlier date if the Company elects to end the Warrant Measuring Period earlier pursuant to a Termination Trigger Event).

Internal control procedures to monitor the Aggregate Transaction Value

Transactions executed by the Subscriber and its Affiliates will be extracted from the daily reports prepared by the Company on all transaction values across all Company Trading Platforms. The Company monitors the Aggregate Transaction Value during the Measurement Period on a monthly basis. The Company will then determine whether a Termination Trigger Event occurs at the end of each Calendar Quarter and the Average Daily Value at the end of the Warrant Measuring Period.

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LETTER FROM THE BOARD

Conditions precedent

Completion of the Warrant Issuance is conditional upon the fulfillment of the following conditions:

(a) The obligation of the Company to issue and sell the Warrant to the Subscriber at Warrant Completion is subject to the satisfaction, at or before the Warrant Completion Date, of the following conditions, provided that the following conditions are for the Company’s sole benefit and, in the case of paragraph (a)(iii) below, may be waived by the Company at any time in its sole discretion:
(i) The Company shall have obtained approval by the Shareholders in a special general meeting giving a specific mandate to the Directors for the allotment and issuance of the Warrant and the Warrant Shares;
(ii) The listing of, and permission to deal in, all of the Subscription Shares, the Conversion Shares and the Warrant Shares shall have been granted by the listing committee of the Stock Exchange (on an unconditional basis) and such listing and permission remaining in full force and effect and shall not have been subsequently revoked;
(iii) The representations and warranties of the Subscriber shall be true and correct in all material respects as of the date when made and as of the Warrant Completion Date as though originally made at that time, and the Subscriber shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Warrant Subscription Agreement to be performed, satisfied or complied with by the Subscriber at or prior to the Warrant Completion Date; and
(iv) All of the conditions precedent under the Subscription Agreement shall have been satisfied or waived (other than the conditions precedent therein requiring all of the conditions precedents set forth in the Warrant Subscription Agreement to be satisfied or waived).
(b) The obligation of the Subscriber to purchase the Warrant at Warrant Completion is subject to the satisfaction, at or before the Warrant Completion Date, of each of the following conditions, provided that the following conditions are for the Subscriber’s sole benefit and may be waived by the Subscriber at any time in its sole discretion (except that the conditions set forth in paragraphs (b)(ii) through (b)(v) below may not be waived by the Subscriber):
(i) Each and every representation and warranty of the Company shall be true and correct as of the date when made and shall be true and correct in all material respects as of the Warrant Completion Date as though originally made at that time and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Warrant Completion Date.

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(ii) The Company shall have obtained approval by the Shareholders in a special general meeting giving a specific mandate to the Directors for the allotment and issuance of the Subscription Shares, the Convertible Note, the Conversion Shares, the Warrant and the Warrant Shares.
(iii) The Company shall have obtained all governmental and regulatory consents and approvals, if any, necessary for the issuance and sale of the Warrant and the Warrant Shares.
(iv) No law or injunction shall have been enacted, entered, promulgated or endorsed by any governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Warrant Subscription Agreement.
(v) The listing of, and permission to deal in, all of the Subscription Shares, the Conversion Shares and the Warrant Shares shall have been granted by the listing committee of the Stock Exchange (on an unconditional basis) and such listing and permission remaining in full force and effect and shall not have been subsequently revoked.
(vi) The Company shall have obtained all third-party consents and approvals, if any, necessary for the issuance and sale of the Warrant (and the Warrant Shares issuable upon exercise of the Warrant) (excluding any approval required from the Shareholders as contemplated by sub-paragraph (ii) above).
(vii) The listing status of the Company on the Stock Exchange shall not have been revoked or withdrawn, the Shares shall continue to be traded on the Stock Exchange (save and except for any temporary suspension in connection with the transactions contemplated under the Warrant Subscription Agreement) and there shall have been no indication from the Stock Exchange that the listing status of the Company will be suspended, cancelled, revoked or withdrawn.
(viii) Since the date of execution of the Warrant Subscription Agreement, no event or series of events shall have occurred that has or have resulted in or would reasonably be expected to have any material adverse effect in respect of the Group.

As at the Latest Practicable Date, the conditions set out above have not been fulfilled.

Termination

In the event that (i) Warrant Completion shall not have occurred by 30 June 2020 (or such other date as the parties may agree in writing); or (ii) the Company breaches the Warrant Subscription Agreement in any material respect prior to Warrant Completion, then the Subscriber shall have the right to terminate the Warrant Subscription Agreement at any time on or after the close of business on such date without liability of the Subscriber to the Company; provided, however, the right of the Subscriber to terminate the Warrant Subscription

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Agreement shall not be available to the Subscriber if the failure of the transactions contemplated under the Warrant Subscription Agreement to have been consummated by such date is the result of the Subscriber’s material breach of the Warrant Subscription Agreement.

The Warrant Subscription Agreement shall automatically be terminated simultaneously with a termination of the Subscription Agreement.

Completion

Completion of the Warrant Issuance shall take place on the first Business Day on which all conditions precedent have been satisfied or waived and shall occur simultaneously with the completion of the Subscription.

Ranking

The Warrant Shares, when allotted and issued, will rank pari passu in all respects among themselves and with the Shares in issue.

Specific mandate

The Warrant Shares will be allotted and issued under the Specific Mandate to be sought from the Shareholders at the EGM.

Listing application

An application will be made by the Company to the listing committee of the Stock Exchange for the listing of, and permission to deal in, the Warrant Shares on the Stock Exchange.

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION AND THE WARRANT ISSUANCE AND USE OF PROCEEDS

The Group is principally engaged in advertising business and the provision of business park area management services in the PRC, and digital assets trading, brokerage, technologies and services businesses in Hong Kong.

The Company’s digital asset trading business and strategic partnership with the Subscriber

Based on the information provided by the Subscriber, the Subscriber is a Delaware limited liability company that was originally formed for the purpose of the Previous Subscription Agreements. The Subscriber is controlled by two individuals, namely Mr. William DiSomma and Mr. Paul Gurinas through (i) DYSO TC, LLC (‘‘DYSO’’), which is controlled and

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beneficially owned by Mr. DiSomma, and (ii) PXG, LLC (‘‘PXG’’), which is controlled and beneficially owned by Mr. Gurinas. Each of DYSO and PXG owns more than 35% of the equity of the Subscriber. The William R. Shepard Trust, which is controlled and beneficially owned by Mr. William R. Shepard, owns a passive investment of more than 10% of the equity of the Subscriber. The remaining equity interests of the Subscriber (less than 15%) are owned by three persons: two of them are current employees of Jump and one is a passive investor who is a long-term equity owner of the Jump Group and each of them owns less than 10% equity of the Subscriber. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Subscriber and its ultimate beneficial owner are third parties independent of the Company and its connected persons.

Moreover, based on the information provided by the Subscriber, the Subscriber is an affiliate of Jump as part of the Jump Group. The Jump Group is a group of affiliated companies under the common control and beneficial ownership of Mr. DiSomma and Mr. Gurinas, which includes, among others, Jump, Jump Trading Futures, LLC, Jump Capital, LLC and Jump Trading Europe, B.V. The business of the Jump Group is primarily focused on (i) automated trading of financial instruments (such as futures, bonds, stocks, options, currencies and cryptocurrencies) and (ii) venture capital investments. Various members of the Jump Group are significant contributors to the orderly trading of a variety of asset classes worldwide and provide liquidity on over 100 global venues.

The Company has a total of approximately 1,000 onboarded clients, of which approximately 160 were active during the three months ended 30 November 2019. The Company considers that out of these clients, seven of them are liquidity providers of the Group. During the three months ended 30 November 2019, approximately 36.6% of the transaction volume on the Company Trading Platforms involved liquidity providers. Among these liquidity providers, the transaction values executed by the Subscriber and its Affiliates comprised approximately 49% of the aggregate transaction value involving liquidity providers.

The commercial success of brokerage or automated trading venue (i.e. trading services) is closely tied to the concept of liquidity: that is, the volume of transactions and orders for buying and selling that are processed by the trading services at any given time. For users of the trading services who may be buyers and sellers of digital assets, in practical terms, liquidity means how easily they may buy or sell a given quantity of digital asset at a price which is, or is close to, what they see as market price. Therefore, clients’ decision on selection of digital asset trading venues is heavily influenced by and dependent on the liquidity of such venues, as liquidity is one of the most important factors affecting the ease and ultimate price of execution. In the specific case of the Company, the use of liquidity providers by the Company has direct and indirect economic benefits as detailed below. In addition to the direct revenue contributions from transactions directly attributable to the liquidity provided by such liquidity providers, the Company also benefits from cost-savings as a result of taking less proprietary positions and associated investment risks or hedging costs.

The Company’s digital asset trading business is currently in a stage of growth and expansion, while the industry is still adapting to the rapidly evolving regulatory landscape, with regulatory licensing beginning to be introduced or enforced in most major markets. In this

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context, the Company aims to seize the opportunity to establish and strengthen its relationship with major stakeholders in the business such as, among others, the Jump Group (being a liquidity provider).

In late 2018, the Company had the opportunity to establish a strategic relationship with the Subscriber by entering into the Previous Subscription Agreements, under which the Subscriber has paid a total of US$3,000,000 as consideration. The parties considered that by the Subscriber obtaining shareholding interests in two major subsidiaries of the Company, an appropriate level of alignment of interests between the Company and the Subscriber was created; thereby incentivizing the Subscriber to provide continuous liquidity to the Company Trading Platforms. The Company believes this strategic relationship with the Jump Group through the Subscriber is an important ingredient for further growth and rapid expansion of the Company Trading Platforms.

As at the Latest Practicable Date, the OS CN has not been converted and the BC Warrant has not been exercised. If the Subscriber chooses not to exercise its conversion right under the OS CN, OS Holdings would be required to repay the principal amount together with accrued interest to the Subscriber, which would add to the cashflow burden of the Group and would not be desirable. Further, given the continuous growth of the business of the Group, the Company and the Subscriber agree that it is now important for the Subscriber’s interest to be aligned at the Company holding level as opposed to the subsidiary level. To facilitate the continuing growth of the digital asset trading businesses of the Group, the Group has undertaken various internal corporate reorganizations, including the following: (i) as disclosed in the announcement issued by the Company on 7 November 2019, pursuant to the position paper setting out a new regulatory framework for the regulation of virtual asset trading platforms in Hong Kong issued by the Securities and Futures Commission, OSL Digital Securities Limited (‘‘OSL Digital Securities’’), a wholly-owned subsidiary of the Company, has applied to the Securities and Futures Commission for a license to conduct Types 1 and 7 regulated activities. It is expected that OSL Digital Securities, once licensed, will replace OS Limited (a whollyowned subsidiary of OS Holdings) to become the Group’s exclusive Hong Kong digital asset trading service business operating entity; and (ii) in respect of the non-Hong Kong digital asset trading service business of the Group, OSL SG Pte Ltd. (‘‘OSL Singapore’’), a wholly-owned subsidiary of the Company, has filed the requisite notice to the Monetary Authority of Singapore pursuant to the Payment Services (Exemption for Specified Period) Regulations 2019 and accordingly has been granted a temporary exemption from holding a license under the Payment Services Act (‘‘PSA’’) in respect of its digital asset trading service business in Singapore. OSL Singapore intends to submit a formal application to become licensed under the PSA. It is expected that OSL Singapore will be the primary non-Hong Kong digital asset trading service business operating entity of the Group.

To continue the strategic partnership for the Subscriber to continuously support the Group and to avoid having OS Holdings having to repay the OS CN, the Company and the Subscriber agreed to enter into the Subscription Agreement and the Warrant Subscription Agreement. Under the terms of the Letter Agreement, it was agreed that: (a) OS Holdings would repurchase the OS CN from the Subscriber for US$2,000,000; (b) BC MarketPlace would repurchase the BC Warrant from the Subscriber for US$1,000,000; and (c) the repurchase proceeds shall be paid by OS Holdings and BC MarketPlace to the Company on behalf of the

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Subscriber in satisfaction of the subscription price for the Subscription Shares and the Convertible Note. It is the intention of the parties that the Completion, the Warrant Completion and the repurchases of the OS CN and the BC Warrant will take place simultaneously, upon when the Previous Subscription Agreements will be terminated.

The incentive structure of the Warrant

Digital asset is a new asset class, and digital asset trading venues is a new market segment. Having regard to the wide array of domicile jurisdictions, regulatory circumstances, target investor segments, product/service offerings, levels of market transparency and standards of cybersecurity protections, there is no readily available and reliable one-for-one market benchmark for incentive arrangements for liquidity providers. Nonetheless, the necessity and general modus operandi of the Warrant arrangement as an incentive program is consistent with the practices of well-established marketplaces for financial instruments.

The intention of the Warrant is to promote liquidity within the Company Trading Platforms by encouraging trading activities of the Subscriber and its Affiliates. Pursuant to the terms of the Warrant, if the Subscriber and its Affiliates achieve a progressive schedule of ADVT which essentially translates into an increasing level of liquidity on the Company Trading Platforms, then the Subscriber shall be entitled to the Warrant Shares.

There is a positive correlative relationship between the value of transactions executed by the Subscriber and its Affiliates on the Company Trading Platforms and the value of commission or trading revenues earned by the Company from its digital asset brokerage/ facilitating services. In other words, the liquidity resulting from the transactions executed by the Subscriber and its Affiliates on the Company Trading Platforms contributes to the generation of trading revenues and commissions for the Company.

Accordingly, the Warrant operates: (i) as a financial incentive for the Subscriber and its Affiliates to transact on the Company Trading Platforms, thereby providing or improving liquidity for such Company Trading Platforms; and (ii) at the same time, to align the interests of the Subscriber with the longer-term interests of the Company.

In addition to the direct quantitative benefits that the Subscriber can bring to the Group in the short-term (direct trading commissions or revenues resulting from client transaction volumes directly attributable to the liquidity provided by the Subscriber and its Affiliates), the Company believes that the transactional activities of the Subscriber and its Affiliates in seeking to achieve maximum ADVT are also expected to result in, among others, the following long-term benefits to the Group:

(a) the passive and active liquidity provided by these transactions are expected to attract or generate other non-Subscriber-related trading volumes (and the Company’s trading revenues) on the Company Trading Platforms; and

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LETTER FROM THE BOARD

(b) the enhanced liquidity on the Company Trading Platforms will:
(i) further enhance the commercial value and attractiveness of the Company’s software-as-a-service (‘‘SaaS’’) packaged services for other potential third-party digital asset trading venue operators. SaaS packaged services, or SaaS packaged solutions, commonly refer to bundled service and product arrangements between a client and a technology system and service provider, which consist of the service provider providing a combination of (1) intellectual property licences for use of its technology product or system; (2) hosting (and in some cases operating) its product or system in an environment controlled or operated by such service provider (such as a data center, server or cloud data service environment); (3) maintaining or managing the maintenance of the product or system for the client (such as regular software or hardware updates, or fixing of technical issues); and (4) other ancillary third-party services procured by the service provider. SaaS packaged services allow clients to operate complex technology systems and processes while avoiding the high costs of in-house expertise, technological software and hardware and personnel resources which would otherwise have to be incurred. The Company’s SaaS primarily serves clients (‘‘SaaS Clients’’) who are also operators of digital asset trading platforms. Therefore, the success of the Company’s own trading platform is an important consideration for potential SaaS Clients looking to utilise the Company’s SaaS systems and services. Where the Company is satisfied that such SaaS Clients are appropriate to also trade on the Company’s trading platform, such SaaS Clients may also utilise the Company’s trading services as a means to enhance such SaaS Client’s platform’s own liquidity. In other words, the success of the Company’s digital trading platform in terms of liquidity also contribute to the reputation as well as practical functionality of the Company’s SaaS systems and services for the Company’s SaaS Clients. Generally, the Company’s ability to facilitate trading liquidity on trading platforms operated by SaaS Clients on account of the Company’s trading services contributes to the commercial value and attractiveness of the Company’s SaaS packaged services to SaaS Clients;
(ii) enable the over-the-counter digital asset brokerage service of the Company to obtain more placement and block-trade engagements from institutional traders, which typically attract higher fees/commissions. The Company provides trading services via both an automated trading platform and a manual over-the-counter interface. The Company’s brokerage services primarily serve professional and institutional clients which typically engage in transactions of larger transaction volumes. Clients wishing to execute block trades typically select brokers on the basis of the perceived ability of the broker to execute at the most desirable price for the clients. The ability to execute at a desirable price for any given volume of assets is dependent on the liquidity in the trading of that asset. Accordingly, in the context of brokers and marketplaces, the ability to access such liquidity is a key attribute sought after by clients. As information regarding the liquidity on the automated trading platform of the Company is

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LETTER FROM THE BOARD

visible to the Company’s clients, liquidity becomes an important consideration in their selection of brokers for large-sized transactions – which typically attract higher fees for the Company; and

(iii) facilitate the Company’s longer-term aspirations to further expand its financial market footprint and influence into advisory and underwriting roles in digital securities transactions.

The benefits that the Group may derive from the abovementioned factors are significant to the growth of the Company.

Even though the exercise price of the Warrant is, in effect, a nominal amount, as demonstrated below, the contractual conditions and criteria for exercise, coupled together with the incentive criteria established for the Subscriber under the Sliding Schedule, are of significant commercial value to the Company and its businesses. These constitute valuable commercial consideration for the Warrant.

As mentioned above, there are direct quantitative benefits arising from the Warrant Issuance, when the Subscriber and its Affiliates seek to achieve maximum ADVT, in the form of trading commissions or revenues resulting from client transaction volumes directly attributable to the liquidity provided by the Subscriber and its Affiliates. Based on revenue models prepared by the Company in relation to the commercial benefits expected to be derived from the liquidity provided by the Subscriber and its Affiliates to the Company Trading Platforms and with reference to the ADVT, it is expected that the accumulated revenue directly attributable to the liquidity resulting from the digital asset trading executed by the Subscriber and its Affiliates will fully offset the cost of the Warrant to the Company during the term of the Warrant.

In order for the Subscriber to exercise the Warrant in full after conclusion of the Warrant Measuring Period, the Subscriber and its Affiliates need to have achieved an ADVT of HK$78,000,000 during the Measurement Period. In addition, should the Subscriber and its Affiliates fail during the relevant Measurement Period to remain in the top 3 trading clients of the Company Trading Platforms for two consecutive Calendar Quarters, the right to further Warrant Shares would cease as the Company can elect to end the Warrant Measuring Period by way of written notice. The Company believes that the ADVT shall properly incentivize the Subscriber to facilitate the growth of liquidity on the Company Trading Platforms and to the overall success of the Company not only during the Measurement Period, but for as long as the Subscriber continues to hold the Warrant Shares.

The ADVT and the Sliding Schedule (each threshold represents one-tenth of the Maximum Warrant Shares and gives the Subscriber the right to subscribe for around an additional 948,280 Warrant Shares) were agreed under arm’s length commercial negotiations between the Company and the Subscriber, after taking into account: (i) the ADVT that is attainable by the Subscriber and its Affiliates in the Measurement Period against the early developmental phases of the Company Trading Platforms; (ii) the ADVT that the Group can achieve as a result of the liquidity directly and indirectly generated by the Subscriber and its Affiliates, based on the expertise and experience of the Company and its key management team; and (iii) the incentive for the Subscriber to continue to contribute to the success of the

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LETTER FROM THE BOARD

Company now as strategic shareholder of the Company. The 508,787 Warrant Shares corresponding to the first ADVT of HK$100 is part and parcel of the entire strategic relationship with the Subscriber and forms the base incentive to the Subscriber.

The issue of the Warrant will not have any impact on the cash flow of the Company and, upon issuance, will not result in any immediate dilution of the shareholdings of the existing Shareholders. The number of Warrant Shares which may be issued by the Company to the Subscriber upon exercise of the Warrant is contingent upon the Average Daily Value.

Taking into account all of the above considerations (including both the qualitative considerations and the quantitative considerations), the Board considers that the commercial benefits expected to be enjoyed by the Company resulting from the incentive structure of the Warrant are in the best interests of the Company and its Shareholders as a whole.

Use of proceeds

As stated above, under the Letter Agreement, the repurchase proceeds of the OS CN and the BC Warrant shall be paid by OS Holdings and BC MarketPlace respectively to the Company on behalf of the Subscriber in satisfaction of the subscription price for the Subscription Shares and the Convertible Note. As a result, the aggregate amount payable by the Subscriber for the Subscription is wholly set-off against the aggregate amount payable by OS Holdings and BC MarketPlace for the repurchase of the OS CN and the BC Warrant, and, accordingly, there are no cash proceeds resulting from the Subscription.

The gross proceeds and the estimated net proceeds from the Warrant Issuance are both approximately HK$78,000. The Company intends to apply the net proceeds from the Warrant Issuance towards the general working capital of the Group.

Having taken into account the above factors and reasons, the Board considers that the terms of the Subscription (including the Subscription Price and the Conversion Price) and the Warrant Issuance (including the Warrant Issue Price, the ADVT and the exercise price) are fair and reasonable and the Subscription and the Warrant Issuance are in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

EFFECT ON THE SHAREHOLDING STRUCTURE

The following table illustrates the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately upon issue of the Subscription Shares; (iii) immediately upon issue of the Subscription Shares, and assuming full exercise of the conversion rights attaching to the Convertible Note; and (iv) immediately upon issue of the Subscription Shares, and assuming full exercise of the conversion rights and the subscription rights attaching to the Convertible Note and the Warrant respectively:

Shareholder East Harvest Global Limited (Note 1) The Subscriber Other public Shareholders Total	As at the Latest Practicable Date Number of Shares % 187,536,194 57.25% — — 140,047,719 42.75% 327,583,913 100.00%	Immediately upon issue of the Subscription Shares Number of Shares % 187,536,194 57.07% 1,051,213 0.32% 140,047,719 42.61% 328,635,126 100.00%	Immediately upon issue of the Subscription Shares, and assuming full exercise of the conversion rights attaching to the Convertible Note Number of Shares % 187,536,194 56.78% 2,689,868 0.81% 140,047,719 42.40% 330,273,781 100.00%	Immediately upon issue of the Subscription Shares, and assuming full exercise of the conversion rights and the subscription rights attaching to the Convertible Note and the Warrant respectively Number of Shares % 187,536,194 54.87% 14,216,138 4.16% 140,047,719 40.97% 341,800,051 100.00%	Immediately upon issue of the Subscription Shares, and assuming full exercise of the conversion rights and the subscription rights attaching to the Convertible Note and the Warrant respectively Number of Shares % 187,536,194 54.87% 14,216,138 4.16% 140,047,719 40.97% 341,800,051 100.00%
					100.00%

Note 1: East Harvest Global Limited is owned as to approximately 60.42% and approximately 32.87% by Wise Aloe Limited and Colour Day Limited respectively. Wise Aloe Limited is owned as to approximately 89% by Bell Haven Limited which is in turn owned as to approximately 30.82%, approximately 22.09% and approximately 22.09% by Mr. Lo Ken Bon, Mr. Madden Hugh Douglas and Mr. Chapman David James, respectively. Colour Day Limited is wholly beneficially owned by Mr. Ko Chun Shun, Johnson. Mr. Lo Ken Bon, Mr. Ko Chun Shun, Johnson, Mr. Madden Hugh Douglas and Mr. Chapman David James are executive Directors.

Note 2: Percentages may not add up to 100% due to rounding.

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LETTER FROM THE BOARD

EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has conducted the following equity fund raising activities for the twelve months immediately before the date of the announcement of the Company dated 10 November 2019 and up to the Latest Practicable Date:

Date of Net proceeds and intended Actual use of announcement Event use of proceeds proceeds 27 May 2019 Subscription of The Company intends to use HK$100 million was 22,876,360 new Shares the net proceeds of used for the set off of at the subscription price approximately HK$114.3 loan due to one of of HK$5 per Share million as follows: (i) the subscribers and under general mandate HK$100 million for the setapproximately off of loan due to one of the HK$14.3 million was subscribers; and (ii) used for the payment approximately HK$14.3 of regular and million for the payment of recurring monthly regular and recurring monthly expenditure of the expenditure of the Group. Group.
24 January 2020 Subscription of The Company intends to use HK$50 million was 43,100,000 new Shares the net proceeds of used to repay at the subscription price approximately HK$280 outstanding loans and of HK$6.50 per Share million to strengthen its HK$2.2 million was under general mandate balance sheet to meet the used to pay the financial reserve requirements expenses relating to of its digital asset licensing the placing of the plans, including (i) new Shares, while the approximately HK$70 million remainder are to be for the repayment of loans; used for the general and (ii) approximately working capital of the HK$210 million for general Group. working capital and financial reserves of the Group.

EGM

The EGM will be held at 10:00 a.m. on Wednesday, 17 June 2020 at 39/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong for the purpose of considering and, if thought fit, approving the Subscription Agreement, the Warrant Subscription Agreement and the transactions contemplated thereunder, including the issue of the Subscription Shares, the Conversion Shares upon exercise of the conversion rights attaching to the Convertible Note and the Warrant Shares upon exercise of the subscription rights attaching to the Warrant. The notice convening the EGM is set out on pages 36 to 38 of this circular.

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LETTER FROM THE BOARD

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, as no Shareholders have a material interest in the Subscription and the Warrant Issuance, which is different from that of the other Shareholders, no Shareholders will be required to abstain from voting on the resolution to be proposed at the EGM.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman decides to allow a resolution relating to a procedural or administrative matter to be voted on by a show of hands pursuant to the Listing Rules. An announcement on the poll results will be published by the Company after the EGM in the manner prescribed under the Listing Rules.

A form of proxy for the EGM is enclosed with this circular and such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.com.hk) and the Company (bc.group). Whether or not you intend to attend and vote at the EGM in person, you are requested to complete and return the form of proxy to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the meeting or any adjournment thereof. The completion and return of a form of proxy will not preclude you from attending and voting in person at the EGM or at any adjournment thereof should you wish and, in such event, the form of proxy shall be deemed to be revoked.

RECOMMENDATION

The Directors (including the independent non-executive Directors) consider that the Subscription and the Warrant Issuance are in the best interests of the Company and the Shareholders as a whole.

Accordingly, the Directors (including the independent non-executive Directors) recommend the Shareholders to vote in favour of the resolutions as set out in the notice of EGM.

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LETTER FROM THE BOARD

Completion of the Subscription and the Warrant Issuance is subject to the fulfillment of the conditions under the Subscription Agreement and the Warrant Subscription Agreement, respectively. The Subscription and the Warrant Issuance may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By order of the Board BC Technology Group Limited Lo Ken Bon Executive Director

– 35 –

NOTICE OF EGM

BC TECHNOLOGY GROUP LIMITED B C 科技集 `團` 有限公 `司`

(incorporated in the Cayman Islands with limited liability)

(Stock code: 863)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (‘‘EGM’’) of BC Technology Group Limited (the ‘‘Company’’) will be held at 39/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong on Wednesday, 17 June 2020 at 10:00 a.m. for the purposes of considering and, if thought fit, passing and approving the following resolutions:

ORDINARY RESOLUTIONS

‘‘THAT
(a) a subscription agreement dated 10 November 2019 (as amended and/or supplemented by a supplemental subscription agreement dated 8 February 2020, a second supplemental subscription agreement dated 25 March 2020 and a third supplemental subscription agreement dated 7 May 2020) (the ‘‘Subscription Agreement’’) entered into between the Company and J Digital 5 LLC (a copy of the Subscription Agreement having been produced to the meeting and marked ‘‘A’’ and initialled by the chairman of the meeting for the purpose of identification) in respect of the subscription of (i) 1,051,213 new shares of HK$0.01 each in the share capital of the Company (the ‘‘Subscription Shares’’) at a subscription price of HK$7.42 per Subscription Share; and (ii) convertible note (the ‘‘Convertible Note’’) in an aggregate principal amount of HK$15,600,000 at the conversion price of HK$9.52 per conversion share (subject to adjustments), and the transactions contemplated thereunder (including but not limited to the allotment and issue of the Subscription Shares, the Convertible Note and the conversion shares (the ‘‘Conversion Shares’’) upon exercise of conversion rights attaching to the Convertible Note) be and are hereby approved, confirmed and ratified;
(b) the allotment and issue of (i) the Subscription Shares by the Company to J Digital 5 LLC; (ii) the Convertible Note by the Company to J Digital 5 LLC; and (iii) the Conversion Shares upon exercise of the conversion rights attaching to the Convertible Note in accordance with the terms and conditions of the Convertible Note, be and are hereby approved and confirmed; and

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NOTICE OF EGM

(c) any one Director be and is hereby authorised for and on behalf of the Company to do all such acts and things and execute all such documents which he considers necessary, desirable or expedient for the purpose of, or in connection with, the implementation of and giving effect to the Subscription Agreement and the transactions contemplated thereunder.’’
‘‘THAT
(a) a warrant subscription agreement dated 10 November 2019 (as amended and/or supplemented by a supplemental warrant subscription agreement dated 8 February 2020, a second supplemental warrant subscription agreement dated 25 March 2020 and a third supplemental warrant subscription agreement dated 7 May 2020) (the ‘‘Warrant Subscription Agreement’’) entered into between the Company and J Digital 5 LLC (a copy of the Warrant Subscription Agreement having been produced to the meeting and marked ‘‘B’’ and initialled by the chairman of the meeting for the purpose of identification) in respect of the issue of warrant (the ‘‘Warrant’’) at an aggregate warrant issue price of HK$78,000 entitling the holders thereof to subscribe for up to the maximum number of 11,526,270 new shares (the ‘‘Warrant Shares’’) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;
(b) the creation and issue of the Warrant by the Company in accordance with the terms and conditions of the Warrant Subscription Agreement be and is hereby approved, confirmed and ratified;
(c) the allotment and issue of up to a maximum number of 11,526,270 Warrant Shares credited as fully paid (subject to the terms and conditions as set out in the Warrant Subscription Agreement), which may fall to be allotted and issued upon the exercise of the subscription rights attaching to the Warrant be and is hereby approved and confirmed; and
(d) any one Director be and is hereby authorised for and on behalf of the Company to do all such acts and things and execute all such documents which he considers necessary, desirable or expedient for the purpose of, or in connection with, the implementation of and giving effect to the Warrant Subscription Agreement and the transactions contemplated thereunder.’’

By order of the Board

BC Technology Group Limited Lo Ken Bon Executive Director

Hong Kong, 1 June 2020

Any shareholder of the Company entitled to attend and vote at the EGM is entitled to appoint another person as his proxy to attend and vote instead of him. A shareholder of the Company who is the holder of 2 or more Shares may appoint more than one proxy to represent him and vote on his behalf. A proxy need not be a member of the Company.

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NOTICE OF EGM

In order to be valid, the form of proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority, must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof.
Completion and return of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the EGM or at any adjourned meeting thereof (as the case may be) should they so wish, and in such event, the form of proxy shall be deemed to be revoked.
In case of joint holders of any share, any one of such joint holders may vote, whether in person or by proxy, in respect of such share as if he/she were solely entitled thereto; but if more than one of such joint holders are present at the EGM, the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding.
The resolutions at the meeting will be taken by poll (except where the chairman decides to allow a resolution relating to a procedural or administrative matter to be voted on by a show of hands) pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
To safeguard the health and safety of Shareholders and prevent the spread of the coronavirus (COVID-19) pandemic, the following measures will be implemented at the EGM:
. Each attendee will be required to undergo a mandatory body temperature check. Any person with a body temperature above 37.4 degrees Celsius, or who is exhibiting flu-like symptoms, will be denied entry into the EGM venue.
. Shareholders, proxies and other attendees are required to wear surgical face masks inside the EGM venue at all times, and maintain a safe distance between seats. Any person who does not comply with this requirement will be required to leave the EGM venue.
. No refreshments will be served at the EGM, and there will be no corporate gifts.

If Shareholders have any questions relating to the EGM, please contact Tricor Investor Services Limited, the Company’s Hong Kong branch share registrar, as follows:

Tricor Investor Services Limited Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong Fax: (852) 2810 8185 E-mail: [email protected]

As at the date of this notice, the executive Directors are Mr. Lo Ken Bon, Mr. Ko Chun Shun, Johnson, Mr. Tiu Ka Chun, Gary, Mr. Madden Hugh Douglas and Mr. Chapman David James, and the independent nonexecutive Directors are Mr. Chau Shing Yim David, Mr. Chia Kee Loong Lawrence and Mr. Tai Benedict.

– 38 –

AI assistant

OSL Group Limited — Proxy Solicitation & Information Statement 2020

49522_rns_2020-05-29_ab34a21e-22b8-4f1b-b143-7ff316cecff5.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

BC TECHNOLOGY GROUP LIMITED B C 科 技 集 團 有 限 公 司

(1) SUBSCRIPTION OF NEW SHARES AND CONVERTIBLE NOTE UNDER SPECIFIC MANDATE

(2) ISSUE OF UNLISTED WARRANT UNDER SPECIFIC MANDATE AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

PRECAUTIONARY MEASURES FOR THE EGM

RESPONSIBILITY STATEMENT

DEFINITIONS

BC TECHNOLOGY GROUP LIMITED B C 科 技 集 團 有 限 公 司

SUBSCRIPTION OF NEW SHARES AND CONVERTIBLE NOTE UNDER SPECIFIC MANDATE, ISSUE OF UNLISTED WARRANT UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

SUBSCRIPTION OF NEW SHARES AND CONVERTIBLE NOTE

Subscription Shares and Subscription Price

Principal terms of the Convertible Note

LETTER FROM THE BOARD

Conversion Shares and Conversion Price

Conditions precedent

Termination

Completion

Subscriber’s undertaking

Ranking

Specific mandate

Listing application

ISSUE OF UNLISTED WARRANT

Principal terms of the Warrant

LETTER FROM THE BOARD

Warrant Shares and Total Warrant Price

LETTER FROM THE BOARD

Undertaking

Internal control procedures to monitor the Aggregate Transaction Value

Conditions precedent

Termination

LETTER FROM THE BOARD

Completion

Ranking

Specific mandate

Listing application

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION AND THE WARRANT ISSUANCE AND USE OF PROCEEDS

The Company’s digital asset trading business and strategic partnership with the Subscriber

LETTER FROM THE BOARD

LETTER FROM THE BOARD

The incentive structure of the Warrant

LETTER FROM THE BOARD

Use of proceeds

EFFECT ON THE SHAREHOLDING STRUCTURE

EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

EGM

LETTER FROM THE BOARD

RECOMMENDATION

BC TECHNOLOGY GROUP LIMITED B C 科 技 集 團 有 限 公 司

NOTICE OF EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTIONS

By order of the Board

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