Pacific Legend Group Limited — Capital/Financing Update 2021

Aug 25, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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

PACIFIC LEGEND GROUP LIMITED

(incorporated in the Cayman Islands with limited liability) (Stock Code: 8547)

PLACING OF NEW SHARES UNDER GENERAL MANDATE

Placing Agent

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THE PLACING

The Board is pleased to announce that on 25 August 2021 (after trading hours of the Stock Exchange), the Company and the Placing Agent entered into the Placing Agreement pursuant to which the Company has conditionally agreed to place through the Placing Agent, on a best effort basis, up to 120,000,000 Placing Shares, to not less than six Placees who and whose ultimate beneficial owners shall be Independent Third Parties at a price of HK$0.112 per Placing Share.

The Placing Price of HK$0.112 per Placing Share represents (i) a discount of approximately 17.04% to the closing price of HK$0.135 per Share as quoted on the Stock Exchange on the Last Trading Day; (ii) a discount of approximately 18.84% to the average of the closing prices per Share of approximately HK$0.138 as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Placing Agreement; and (iii) a premium of approximately 13.91% to the average of the closing price per Share of HK$0.0983 as quoted on the Stock Exchange for the last six months immediately preceding the date of the Placing Agreement;

The maximum number of the Placing Shares represents (i) approximately 10% of the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 9.09% of the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares (assuming that there is no change in the issued share capital of the Company from the date of this announcement and up to the completion of the Placing).

The Placing Shares will be allotted and issued under the General Mandate. The allotment and issue of the Placing Shares is not subject to the approval of the Shareholders.

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Assuming all 120,000,000 Placing Shares are subscribed for in full, upon completion of the Placing, the aggregate gross proceeds from the Placing will be approximately HK$13,440,000 and the aggregate net proceeds will be approximately HK$12,768,000 (after deduction of commission and other expenses of the Placing), representing a net issue price of approximately HK$0.1064 per Placing Share. The Directors intend to use the entire net proceeds as working capital of the Group.

Completion of the Placing is subject to the satisfaction of the conditions precedent in the Placing Agreement. As the Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

THE PLACING

The Board is pleased to announce that on 25 August 2021 (after trading hours of the Stock Exchange), the Company and the Placing Agent entered into the Placing Agreement in relation to the Placing, pursuant to which the Company has conditionally agreed to place through the Placing Agent, on a best effort basis, up to 120,000,000 Placing Shares, to not less than six Placees who and whose ultimate beneficial owners shall be Independent Third Parties at a price of HK$0.112 per Placing Share. Details of the Placing Agreement are set out below:

The Placing Agreement

Date: 25 August 2021 (after trading hours of the Stock Exchange) Parties: Issuer: The Company Placing Agent: Lego Securities Limited

The Placing Agent has been appointed to place up to 120,000,000 Placing Shares at the Placing Price of HK$0.112 on a best effort basis, to not less than six Placees.

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owners are Independent Third Parties.

Placees

The Placing Shares are expected to be placed, on a best effort basis, to not less than six Placees, who and whose ultimate beneficial owners, shall be Independent Third Parties. Upon completion of the Placing, it is expected that none of the Placees will become a substantial Shareholder (as defined under the Listing Rules) of the Company.

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Placing Shares

The maximum number of Placing Shares of up to 120,000,000 Shares under the Placing represents (i) 10% of the existing issued share capital of the Company as at the date of this announcement; and (ii) approximately 9.09% of the issued share capital of the Company as enlarged by the allotment and issue of the Placing Shares (assuming that there is no change in the issued share capital of the Company from the date of this announcement and up to the completion of the Placing). The aggregate nominal value of the Placing Shares under the Placing will be HK$1,200,000.

Placing Price

The Placing Price of HK$0.112 per Placing Share represents:

• (i) a discount of approximately 17.04% to the closing price of HK$0.135 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (ii) a discount of approximately 18.84% to the average of the closing prices per Share of HK$0.138 as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Placing Agreement; and

• (iii) a premium of approximately 13.91% to the average of the closing price per Share of HK$0.0983 as quoted on the Stock Exchange for the last six months immediately preceding the date of the Placing Agreement;

The Placing Price was determined with reference to the prevailing market price of the Shares and was negotiated on an arm’s length basis between the Company and the Placing Agent. The Directors consider that the terms of the Placing are on normal commercial terms and are fair and reasonable based on the current market conditions. Hence, the Directors consider that the Placing is in the interests of the Company and the Shareholders as a whole. After taking into account all related costs, fees, expenses and commission of the Placing, the net issue price of the Placing Shares is approximately HK$0.1064 per Share.

Ranking of Placing Shares

The Placing Shares, when issued and fully paid, shall rank pari passu in all respects among themselves and with the existing Shares in issue as at the date of this announcement.

Placing Commission

The Placing Agent will charge the Company a placing commission of 5% of the aggregate Placing Amount. The Placing commission was arrived at after arm’s length negotiation between the Company and the Placing Agent by reference to the prevailing market rates. The Directors consider that the terms of the Placing, including the Placing commission, are fair and reasonable based on the current market conditions and the Placing is in the interests of the Company and the Shareholders as a whole.

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General Mandate to issue the Placing Shares

The Placing Shares will be allotted and issued under the General Mandate granted to the Directors by resolution of the Shareholders passed at the AGM, subject to the limit of up to 20% of the then issued share capital of the Company as at the date of the AGM. Under the General Mandate, the Company is authorised to issue up to 240,000,000 new Shares. Up to the date of this announcement, no Shares have been allotted and issued under the General Mandate. Accordingly, the allotment and issue of the Placing Shares is not subject to the approval of the Shareholders.

Conditions of the Placing

The Placing is conditional upon (i) the Listing Committee of the Stock Exchange granting or agreeing to grant the approval for the listing of, and permission to deal in, the Placing Shares and (ii) the passing by the Board of resolutions to approve the Placing Agreement and the transactions contemplated thereunder.

If the above conditions are not fulfilled by 15 September 2021 (or such later date as may be agreed between the Company and the Placing Agent), the Placing will be terminated and the Placing will not proceed and all rights, obligations and liabilities of the parties thereto shall cease and terminate and the Placing Agent shall be released from all obligations pursuant to the Placing Agreement and none of the parties shall have any claim against the other in respect of the Placing save for any antecedent breach.

Completion of the Placing

Completion of the Placing shall take place on the third (3rd) Business Day after the fulfilment of the conditions as set out in paragraph headed ‘‘Conditions of the Placing’’ above (or such later date as may be agreed between the parties) or such other date as the Company and the Placing Agent may agree in writing.

Application for listing

The Company will make an application to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares.

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Termination

The Placing Agent may terminate the Placing Agreement by notice in writing given to the Company prior to 10:00 a.m. on the Completion Date upon the occurrence of the following events which, in the absolute opinion of the Placing Agent, has or may have an adverse effect on the business or financial conditions or prospects of the Company or the Group taken as a whole or the success of the Placing or the full placement of all of the Placing Shares or otherwise makes it inappropriate, inadvisable or inexpedient to proceed with the Placing on the terms and in the manner contemplated in the Placing Agreement:

• (a) the occurrence of any event, development or change (whether or not local, national or international or forming part of a series of events, developments or changes occurring or continuing before, on and/or after the date hereof) and including an event or change in relation to or a development of an existing state of affairs of a political, military, industrial, financial, economic, fiscal, regulatory or other nature, resulting in a change in, or which may result in a change in, political, economic, fiscal, financial, regulatory or stock market conditions and which in the Placing Agent’s absolute opinion would affect the success of the Placing; or

• (b) the imposition of any moratorium, suspension (for more than 7 trading days) or restriction on trading in securities generally on the Stock Exchange occurring due to exceptional financial circumstances or otherwise and which in the Placing Agent’s absolute opinion, would affect the success of the Placing; or

• (c) any new law or regulation or change in existing laws or regulations or any change in the interpretation or application thereof by any court or other competent authority in Hong Kong or any other jurisdiction relevant to the Group and if in the Placing Agent’s absolute opinion any such new law or change may affect the business or financial prospects of the Group and/or the success of the Placing; or

• (d) any litigation or claim being instigated against any member of the Group, which has or may have an effect on the business or financial position of the Group and which in the Placing Agent’s absolute opinion would affect the success of the Placing; or

• (e) any material adverse change in the business or in the financial or trading position or prospects of the Group as a whole; or

• (f) any material breach of any of the representations and warranties set out in the Placing Agreement comes to the knowledge of the Placing Agent or any event occurs or any matter arises on or after the date hereof and prior to the Completion Date which if it had occurred or arisen before the date hereof would have rendered any of such representations and warranties untrue or incorrect or there has been a breach by the Company of any other provision of the Placing Agreement; or

• (g) there is any material change (whether or not forming part of a series of changes) in market conditions which in the absolute opinion of the Placing Agent would materially and prejudicially affect the Placing or makes it inadvisable or inexpedient for the Placing to proceed.

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Notwithstanding anything contained in the Placing Agreement, the Company may terminate the Placing Agreement without any liability to the Placing Agent, by notice in writing given to the Placing Agent at any time prior to 10:00 a.m. on the Completion Date if there is a breach of the warranties, representations and undertakings given by the Placing Agent in the Placing Agreement and such breach is considered by the Company on reasonable grounds to be material.

If notice is given pursuant to the termination clauses above, the Placing Agreement shall terminate and be of no further effect and neither party shall be under any liability to the other party in respect of the Placing Agreement save for any antecedent breach under the Placing Agreement prior to such termination and liabilities under the Placing Agreement in relation to commissions and expenses.

REASONS FOR THE PLACING AND USE OF PROCEEDS

The Group is principally involved in (i) the sale of home furniture and accessories; (ii) rental of home furniture and accessories; and (iii) project and hospitality services, which typically involve designing, styling, decorating and furnishing commercial or residential properties such as hotels, serviced apartments and showflats.

Assuming the maximum number of the Placing Shares is placed under the Placing Agreement, the gross proceeds from the Placing will be approximately HK$13,440,000, and the net proceeds will be approximately HK$12,768,000 (after deduction of commission and other expenses of the Placing), representing a net issue price of approximately HK$0.1064 per Placing Share.

The Directors intend to use the entire proceeds as general working capital of the Group.

As at 30 June 2021 and the date of this announcement, the unutilized amount of net proceeds from the Listing was approximately HK$23,676,000. The Directors still intend to continue the existing business operations of the Group and given the knock-on effects of COVID-19 pandemic resulting in worldwide economic uncertainty, the Directors intends to preserve the unutilized proceeds for the continuing expansion of the Group’s retail network once the COVID-19 pandemic is contained and the worldwide economy is recovered. In view of the current market conditions, the Directors consider that the Placing will strengthen the Group’s financial position and represents an opportunity to raise additional funding for the business operations of the Group (including but not limited to the achievement of the Company’s business objectives as set out in the prospectus of the Listing) and will, and enlarge Shareholders’ base of the Company which may in turn enhance the liquidity of the Shares, and provide working capital to the Group to meet any financial obligations of the Group without any interest burden, within a relatively shorter time frame and at lower costs when compared with other means of fundraising.

The Directors consider that the Placing Agreement is entered into upon normal commercial terms following arm’s length negotiations between the Company and the Placing Agent and the terms of the Placing Agreement (including the Placing Price and the placing commission) are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

FUND RAISING ACTIVITY OF THE COMPANY IN THE PAST 12 MONTHS

The Company has conducted the following fundraising activity in the past twelve months immediately preceding the date of this announcement:

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Date of announcement	Event	Net proceeds	Intended use of proceeds	Actual use of proceeds as at the date of announcement
7 January 2021, 29 January 2021 and 4 February 2021	Placing of 200,000,000 new Shares under the general mandate granted by Shareholders at the Company’s annual general meeting on 25 May 2020	Approximately HK$11,279,000	General working capital for operations	Administrative and operations of HK$11,279,000

Save as abovementioned, the Company had not conducted any other fundraising exercise in the past twelve months immediately preceding the date of this announcement.

EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY

The shareholding structure of the Company (i) as at the date of this announcement and (ii) upon completion (assuming all the Placing Shares are issued and allotted) of the Placing are set out below:

Major Shareholder Double Lions Limited (Note 1, 2 and 3） Mr. Cheung Wai Keung The Placees Other Public Shareholders Total	As at the date of this announcement No. of Shares Approximate % 414,500,000 34.54% 120,000,000 10.00% ─ ─ 665,500,000 55.46% 1,200,000,000 100.00%	Immediately upon completion of the Placing No. of Shares Approximate % 414,500,000 31.40% 120,000,000 9.09% 120,000,000 9.09% 665,500,000 50.42% 1,320,000,000 100.00%	Immediately upon completion of the Placing No. of Shares Approximate % 414,500,000 31.40% 120,000,000 9.09% 120,000,000 9.09% 665,500,000 50.42% 1,320,000,000 100.00%
			100.00%

Notes:

1. Double Lions Limited is owned as to 40.48% by Mr. John Warren MCLENNAN, 20.00% by Ms. Tracy-Ann FITZPATRICK, 14.88% by Ms. Alison Siobhan BAILEY, 14.88% by Mr. John Martin RINDERKNECHT and 9.76% by Mr. James Seymour Dickson LEACH (collectively, with Double Lions Limited, the “Controlling Shareholders”). Each of the Controlling Shareholders executed the deed of acting in concert dated 12 February 2018 confirming the existence of their acting in concert and are deemed to be interested in all the Shares owned by Double Lions Limited.

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1. Mr. David Frances BULBECK is the spouse of Ms. Tracy-Ann FITZPATRICK and is deemed to be interested in the Shares held by Ms. Tracy-Ann FITZPATRICK by virtue of the SFO.

2. Ms. Alison Siobhan BAILEY and Mr. James Seymour Dickson LEACH are married to each other and each of them is deemed to be interested in the Shares held by her/his spouse via Double Lions Limited by virtue of the SFO.

Shareholders and potential investors of the Company should note that completion of the Placing is subject to the satisfaction of the conditions precedent in the Placing Agreement. The Placing may or may not proceed. Shareholders and potential investors of the Company are therefore advised to exercise caution when dealing in the securities of the Company.

DEFINITIONS

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

“AGM”	the annual general meeting of the Company held on 9 June 2021
“Board”	the board of Directors
“Business Day”	a day (excluding Saturday, Sunday, public holiday and any day on
	which a tropical cyclone warning signal no. 8 or above is hoisted
	or remains hoisted between 9:00 a.m. and 12:00 noon and is not
	lowered at or before 12:00 noon or on which a ‘‘black’’ rainstorm
	warning signal is hoisted or remains in effect between 9:00 a.m.
	and 12:00 noon and is not discontinued at or before 12:00 noon)
	on which licensed banks in Hong Kong are open for business
	throughout their normal business hours
“Company”	Pacific Legend Group Limited, a company incorporated in the
	Cayman Islands on 1 September 2017 as an exempted company
	with limited liability, the issued shares of which are listed on GEM
	of the Stock Exchange (stock code: 8547)
“Completion Date”	the date which is the third (3rd) Business Days after the fulfilment
	of the condition set out in the Placing Agreement (or such later date
	as may be agreed between the Company and the Placing Agent)
“Director(s)”	the director(s) of the Company
“General Mandate”	the mandate granted to the Directors by the Shareholders at the
	AGM to allot, issue and deal with up to 20% of the then issued
	share capital of the Company as at the date of the AGM
“Group”	the Company and its subsidiaries

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“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“Independent Third Party”	party(ies) who is (are) not connected persons of the Company and
	is (are) third party(ies) independent of the Company and its
	connected persons in accordance with the Listing Rules
“Last Trading Day”	24 August 2021, being the last trading day of the Shares on the
	Stock Exchange immediately before the entering into of the
	Placing Agreement
“Listing”	the listing of the Shares on GEM on 18 July 2018 by way of share
	offer.
“Listing Committee”	the listing sub-committee of the board of directors of the Stock
	Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Placee(s)”	any professional, institutional or other investor(s) or any of their
	respective subsidiaries or associates procured by the Placing Agent
	to subscribe for any of the Placing Shares pursuant to the Placing
	Agent’s obligations under the Placing Agreement
“Placing”	the placing, on a best effort basis, of up to 120,000,000 Placing
	Shares pursuant to the terms of the Placing Agreement
“Placing Agent”	Lego Securities Limited, a corporation licensed to carry on type 1
	(dealing in securities) regulated activities under the Securities and
	Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Placing Agreement”	the conditional placing agreement entered into between the
	Company and the Placing Agent dated 25 August 2021 in relation
	to the Placing
“Placing Amount”	the total aggregate amount of money (total monetary value)
	derived from multiplying the Placing Price by the actual number of
	Placing Shares actually subscribed for by the Placees procured by
	the Placing Agent
“Placing Price”	HK$0.112 per Placing Share
“Placing Share(s)”	up to 120,000,000 new Shares to be placed pursuant to the Placing
	Agreement
“PRC”	the People’s Republic of China, which for the purpose of this
	announcement excludes Hong Kong, Macau Special
	Administrative Region of the PRC and Taiwan

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“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the
	Company
“Shareholder”	holder(s) of the issued Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“GEM”	GEM of the Stock Exchange
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“%”	per cent.

By order of the Board of Pacific Legend Group Limited John Warren McLennan Executive Director, Chairman and Chief Executive Officer

Hong Kong, 25 August 2021

As at the date of this announcement, the Board comprises Mr. John Warren McLennan, Ms. Mok Lai Yin Fiona, Mr. So Kin Ting Wilson and Mr. Zheng Tianzhi as executive Directors; Mrs. Jennifer Carver McLennan as non-executive Director; and Ms. Lale Kesebi, Mr. Roderick Donald Nichol, Mr. So Alan Wai Shing and Mr. Lee Kwong Ming as independent non-executive Directors.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purposes 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 announcement is accurate and complete in all material respects and not misleading or deceptive; (ii) there are no other matters the omission of which would make any statement herein or this announcement misleading; and (iii) all opinions expressed in this announcement have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

This announcement will remain on the ‘‘Latest Listed Company Information’’ page of the website of the Stock Exchange at www.hkexnews.hk for at least seven days from the day of its posting. This announcement will also be published on the Company’s website at www.pacificlegendgroup.com.

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