PINE Technology Holdings Limited — Capital/Financing Update 2015

Mar 12, 2015

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

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PINE TECHNOLOGY HOLDINGS LIMITED 松景科技控股有限公司 [*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1079)

DISCLOSEABLE TRANSACTION DISPOSAL OF PROPERTY

THE DISPOSAL

The Board wishes to announce that on 11 March 2015, the Vendor (a wholly-owned subsidiary of the Company) entered into the Sale and Purchase Agreement with the Purchaser, an Independent Third Party, pursuant to which the Vendor has agreed to dispose of the Property at the Consideration of US$5,160,000 (equivalent to approximately HK$40,248,000). The Consideration was determined after arm’s length negotiation and was based on normal commercial terms.

As the applicable percentage ratios calculated under Chapter 14 of the Listing Rules in respect of the Disposal exceed 5% but are less than 25%, the Disposal constitutes a discloseable transaction for the Company under the Listing Rules.

THE DISPOSAL

The Board wishes to announce that on 11 March 2015, the Vendor (a wholly-owned subsidiary of the Company) entered into the Sale and Purchase Agreement with the Purchaser, an Independent Third Party, pursuant to which the Vendor has agreed to dispose of the Property at the Consideration of US$5,160,000 (equivalent to approximately HK$40,248,000).

The principal terms of the Sale and Purchase Agreement are set out below.

SALE AND PURCHASE AGREEMENT

Date :

11 March 2015

• for identification purpose only

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Parties:

Vendor:

Green Privado Asset Holdings LLC, a wholly-owned subsidiary of the Company

Purchaser:

• Rivermist Investments, LLC (and/or its assignee), a company incorporated in the U.S.A.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, the Purchaser and its ultimate beneficial owner(s) are Independent Third Parties.

The Property:

The Property is a freestanding concrete tilt-up industrial building with an area of approximately 40,793 sq. ft. erected on a fully improved lot of approximately 2.26 acre. The Property is currently leased to the Tenant, for use as its office and warehouse.

Consideration:

The Consideration amounts to US$5,160,000 (equivalent to approximately HK$40,248,000) and shall be satisfied in the following manner:

• (1) a deposit (the “ Deposit ”) in the sum of US$100,000 (equivalent to approximately HK$780,000) shall be deposited by the Purchaser with the Escrow Holder within two (2) business days upon the execution of the Sale and Purchase Agreement and the delivery of the executed Sale and Purchase Agreement to the Escrow Holder;

• (2) the balance of US$5,060,000 (equivalent to approximately HK$39,468,000) shall be deposited by the Purchaser with the Escrow Holder by federal funds wire transfer or any other method acceptable to the Escrow Holder in immediately collectable funds no later than 2:00 p.m. on the business day prior to the Closing.

If the Deposit is not received by the Escrow Holder within the time and in the manner specified in above, the Vendor may elect to unilaterally terminate the Sale and Purchase Agreement by giving written notice to the Escrow Holder whereupon neither party shall have any further liability to the other under the Sale and Purchase Agreement.

The Consideration payable by the Purchaser for the Property was determined after arm’s length negotiations between the Group and the Purchaser, with reference to, among other things, the prevailing market value of similar properties with comparable size and quality in the area where the Property is located and the book value of the Property of US$3,189,000 (equivalent to approximately HK$24,874,000) as at 31 December 2014. The Directors, consider that the Consideration is fair and reasonable.

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Financing contingency

The Sale and Purchase Agreement is contingent upon the Purchaser obtaining from an insurance company, financial institution or other lender, a commitment to lend to the Purchaser a sum equal to at least 90% of the Consideration (the “ Loan ”), on terms reasonable to the Purchaser.

If the Purchaser fails to notify its broker, the Escrow Holder and the Vendor, in writing within 30 days following the date of the Sale and Purchase Agreement, that the Loan has not been obtained, it shall be conclusively presumed that the Purchaser has either obtained the Loan or has waived this financing contingency. If, after due diligence, the Purchaser shall notify its broker, the Escrow Holder and the Vendor, in writing, within 30 days following the date of the Sale and Purchase Agreement, that the Loan has not been obtained, the Sale and Purchase Agreement shall be terminated, and the Purchaser shall be entitled to the prompt return of the Deposit together with any interest earned thereon, less any cancellation fees and costs charged by the Escrow Holder and title company.

Closing

Closing is also contingent upon the satisfaction or waiver of the following contingencies, including, among others:

• (1) physical aspects and the size of the Property;

• (2) approvals and permits from governmental agencies or departments which the Purchaser deems necessary or desirable in connection with its intended use of the Property;

• (3) the Escrow Holder causing a current commitment for title insurance concerning the Property; and

• (4) delivery of all documents and due performance by the Vendor of each and every undertaking and agreement to be performed by the Vendor under the Sale and Purchase Agreement,

within the time limits as provided for under the Sale and Purchase Agreement. Closing is expected to take place 30 days after the waiver or expiration of the Purchaser’s contingencies (including the above-mentioned financing contingency).

Legal fees and transaction costs:

Each party shall each pay its own legal costs and one-half of the Escrow Holder’s charges. The Vendor shall, among other transaction costs, pay the brokerage fees, the usual recording fees and any required documentary transfer taxes.

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OPTION TO LEASE BACK THE PROPERTY UNTIL 30 AUGUST 2015

Prior to Closing and following 30 days from the opening of escrow, the Purchaser agrees to provide the existing Tenant with an option to remain as a tenant for a monthly rental of US$20,000 (equivalent to approximately HK$156,000) exclusive of utility charges. The first term will end on 30 June 2015 with two options to extend the lease for thirty days each. The rental was determined after arm’s length negotiations between the parties with reference to the rental of similar properties in the same vicinity. The Directors consider that the rental is fair and reasonable.

REASON FOR AND BENEFIT OF THE DISPOSAL

The Group is principally engaged in the design, manufacturing and distribution of PC based products. The Vendor is a wholly-owned subsidiary of the Company engaged in property investment. The Tenant is a wholly-owned subsidiary of the Company principally engaged in wholesaling and distribution of computer components.

The Purchaser is an Independent Third Party principally engaged in property holding. The Company has no relationship with the Purchaser, and/or its respective ultimate beneficial owner(s) and does not have any transactions with the Purchaser and/or its ultimate beneficial owner(s) completed within 12 months prior to the Disposal.

The Property is a freestanding concrete tilt-up industrial building with an area of approximately 40,793 sq. ft. erected on a fully improved lot of approximately 2.26 acre. The Property is currently leased to the Tenant and used by the Tenant as its office and warehouse in the U.S.A.

Due to the substantial size of the Property, the Property is currently under utilised by the Tenant. The Tenant considers that it would be more cost effective to relocate to other premises of smaller size. The Tenant does not foresee any great difficulties in relocating to a more suitable premises to conduct its business operation. As the Tenant is given the option to remain as a tenant until 30 August 2015, the Directors consider that any unnecessary interruption to the Tenant’s business would be minimised.

The Board is of the view that the terms of the Sale and Purchase Agreement are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Board also considers that the Disposal is in the interests of the Company and the Shareholders as a whole.

POSSIBLE FINANCIAL EFFECT OF THE DISPOSAL

The Group acquired the Property in 2011 at a consideration of US$3,416,000 (equivalent to approximately HK$26,645,000). Details of the acquisition of the Property are set out in the Company’s announcement dated 24 March 2011. Based on the book value of the Property (being US$3,189,000 (equivalent to approximately HK$24,874,000) as at 31 December 2014), it is expected that the Company will realise a pre-tax gain from the Disposal of approximately US$1,971,000

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(equivalent to approximately HK$15,374,000) (not taking into account the brokerage fees, transaction costs and other professional fees to be incurred), being the difference between the Consideration and the book value of the Property as at 31 December 2014.

USE OF PROCEEDS

The Company intends to use the net sale proceeds from the Disposal as general working capital.

IMPLICATIONS UNDER THE LISTING RULES

As the applicable percentage ratios for the Company is greater than 5% but less than 25%, the Disposal constitutes a discloseable transaction under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements pursuant to the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms have the following meanings:

“Sale and Purchase	the sale and purchase agreement entered into between the Vendor	the sale and purchase agreement entered into between the Vendor	the sale and purchase agreement entered into between the Vendor
Agreement”	and the Purchaser on 11 March 2015 in relation to the Disposal
“Board”	the board of Directors
“Company”	PINE Technology Holdings Limited, a company incorporated		in
	Bermuda with limited liability, the issued Shares	of which are listed
	on the main board of the Stock Exchange
“Closing”	completion of the Disposal
“Consideration”	US$5,160,000 (equivalent to approximately HK$40,248,000), being
	the amount of money payable to the Vendor by the Purchaser		for
	the Property
“Director(s)”	the director(s) of the Company
“Disposal”	the disposal of the Property pursuant to the Sale and Purchase
	Agreement by the Vendor
“Escrow Holder”	North American Title Company whose address	is 520 N, Central
	Avenue, 2nd Floor Glendale, CA 91203,	U.S.A., and	an
	Independent Third Party
“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	independent third party(ies) who is/are not connected persons (as
Party(ies)”	defined in the Listing Rules) of the Company and is/are
	independent of and not connected with the Company and its
	connected persons (as defined in the Listing Rules)
“Listing Rules”	Rules Governing the Listing of Securities on the Stock Exchange
“Property”	the freestanding concrete tilt-up industrial building with an area of
	approximately 40,793 sq. ft. erected on a fully improved lot of
	approximately 2.26 acre located at 2134 Green Privado, Ontario,
	San Bernardino, California, the U.S.A.
“Purchaser”	Rivermist Investments, LLC (and/or its assignee), a company
	incorporated in the U.S.A., and an Independent Third Party
“Shareholder(s)”	the shareholder(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Tenant”	Eastcom, DBA XFX Technology USA, a company incorporated in
	the U.S.A. and a wholly-owned subsidiary of the Company
“Vendor”	Green Privado Asset Holdings LLC, a company incorporated in the
	U.S.A. and a wholly-owned subsidiary of the Company
“U.S.A.”	the United Sates of America
“sq. ft.”	square feet

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“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“US$”

United States dollars, the lawful currency of the U.S.A.

By order of the Board PINE Technology Holdings Limited Chiu Hang Tai Chairman

Hong Kong, 12 March, 2015

For illustration purpose, certain amounts denominated in US$ have been translated into HK$ at an exchange rate of US$1.00 to HK$7.8.

As at the date of this announcement, the executive Directors are Mr. Chiu Hang Tai and Mr. Chiu Samson Hang Chin., non-executive Director is Mr. Chiu Herbert H T. and independent non-executive Directors are Mr. Li Chi Chung, Mr. So Stephen Hon Cheung and Dr. Huang Zhijian.

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