Sinopharm Tech Holdings Limited — Capital/Financing Update 2021

Aug 22, 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 contents of this announcement.

This announcement appears for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company nor anything herein forms the basis for any contract or commitment whatsoever.

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Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

ISSUE OF CONVERTIBLE BONDS

ISSUE OF CONVERTIBLE BONDS

The Board is pleased to announce that on 20 August 2021 (after trading hours), the Company and each of the two Subscribers entered into the First Subscription Agreement and the Second Subscription Agreement respectively in relation to the issuance of Convertible Bonds of an aggregate principal amount of HK$100,000,000. The Convertible Bonds will bear interest at the rate of 7% per annum, interest is payable semi-annually in arrears.

The initial Conversion Price is HK$0.29 per Conversion Share, which represents (i) a premium of approximately 26.1% over the closing price of HK$0.23 per Share quote on the Stock Exchange on the date of the Subscription Agreements; (ii) a premium of approximately 26.6% to the average closing price of approximately HK$0.229 per Share as quoted on the Stock Exchange for the five consecutive trading days immediately prior to the date of the Subscription Agreements; and (iii) a premium of approximately 25.0% to the average closing price per Share of approximately HK$0.232 as quoted on the Stock Exchange for the last ten consecutive trading days immediately prior to the date of the Subscription Agreements.

Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$0.29 per Conversion Share, the Convertible Bonds will be convertible into 344,827,586 Shares, representing approximately 7.83% of the issued share capital of the Company as at the date of this announcement and approximately 7.26% of the issued share capital of the Company as enlarged by the issue and allotment of the Conversion Shares. The Conversion Shares will be fully paid and rank pari passu in all respects with the Shares then in issue on the relevant conversion date.

LISTING RULES IMPLICATIONS

The Conversion Shares will be allotted and issued by the Company pursuant to the General Mandate. The issue of the Conversion Shares by the Company upon exercise of the conversion rights under the Convertible Bonds is not subject to Shareholders’ approval.

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As the Subscription Agreements are subject to the conditions precedent therein and therefore any or all of the Subscription Agreements 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.

The Board is pleased to announce that on 20 August 2021 (after trading hours), the Company entered into the First Subscription Agreement and the Second Subscription Agreement respectively with each of the Subscribers in relation to the issuance of the Convertible Bonds of an aggregate principal amount of HK$100,000,000 with a term of 18 months (540 days) from the Bond Issue Date, at an initial Conversion Price of HK$0.29 per Share.

THE SUBSCRIPTION AGREEMENTS

Pursuant to the Subscription Agreements, the First Subscriber and the Second Subscriber has respectively conditionally agreed to subscribe for the Convertible Bonds, the details of which are set out under “PRINCIPAL TERMS OF THE CONVERTIBLE BONDS” below. The Subscription Agreements are on principally the same terms and their material terms are detailed as below.

The First Subscription Agreement

Date:	20 August 2021
Parties:	(i) the Company, as issuer; and
	(ii) Expert Global Enterprises Limited, as the First Subscriber
Principal Amount:	HK$50,000,000
Interest:	The Convertible Bonds shall bear interest at the rate of 7% per
	annum. The interest will be payable by the Company semi-annually
	in arrears on the Interest Repayment Date.
Maturity Date:	18 months after the Bond Issue Date, being the 540thday after the
	Bond Issue Date.
Management Right:	The First Subscriber is entitled to nominate a non-executive director
	to the Board during the term of the Convertible Bonds, subject to
	fulfilment of the Company’s director nomination policy, board
	diversity policy and the applicable GEM Listing Rules. Such
	director so appointed shall be subject to retirement and re-election
	at the Company’s general meetings as required under the then valid
	articles of association of the Company and all applicable GEM
	Listing Rules.

The Second Subscription Agreement

Date: 20 August 2021 Parties: (i) the Company, as issuer; and (ii) Japan Equity Value Investment Fund, as the Second Subscriber Principal Amount: HK$50,000,000

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Interest:

The Convertible Bonds shall bear interest at the rate of 7% per annum. The interest will be payable by the Company semi-annually in arrears on the Interest Repayment Date.

Maturity Date:

18 months after the Bond Issue Date, being the 540[th] day after the Bond Issue Date.

Information about the Subscribers

The First Subscriber is a company established in the British Virgin Islands with limited liability and is principally engaged in investment holding. The Second Subscriber is an exempted company incorporated with limited liability in the Cayman Islands focusing on achieving capital appreciation through investing in wide range of instruments.

As at the date of this announcement, to the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, each of the Subscribers and its respective ultimate beneficial owner is an Independent Third Party. Each of the Subscribers is (i) independent of the other Subscriber and does not have any business dealings with each other; and (ii) save as the relationship of bondholder and issuer created between each Subscriber with the Company as a result of completion of the Subscription Agreements, neither of the Subscribers nor its ultimate beneficial owner nor their respective associates has any interests in the Shares or any business dealings with the Group.

Principal amount of the Convertible Bonds

Pursuant to the Subscription Agreements, the Subscribers will subscribe for the Convertible Bonds in the aggregate principal amount of HK$100,000,000.

Conditions Precedent to the First Subscription Agreement

Completion of the First Subscription Agreement shall be subject to and conditional upon the following:

• (a) the representations and warranties of the Company contained in the Subscription Agreements shall be true and correct on and as of the date of Completion (except to the extent that a representation and warranty speaks as of a specific date, in which case such representation and warranty shall be true and correct as of such specific date);

• (b) the Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in the Subscription Agreements that are required to be performed or complied with by it on or before the Completion;

• (c) there shall not have occurred a Material Adverse Effect since the date of the Subscription Agreements;

• (d) all necessary waivers, approvals, consents, authorizations and confirmation of any relevant party, including but not limited to the independent Shareholders and Stock Exchange, required to be obtained on the part of the Company in relation to the transactions contemplated under the Subscription Agreements having been obtained;

• (e) the Company shall have produced to the Subscriber a certified copy of the board resolutions of the Company approving the entering into and performance of its obligations of the Subscription Agreements, and all agreements and documents and all transactions contemplated under the Subscription Agreements; and

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• (f) the Stock Exchange having granted the listing of, and the permission to deal in, the Conversion Shares; and such grant not having been revoked as at the date of Completion.

The First Subscriber may waive the conditions precedent referred to above at any time before the First Long Stop Date by notice in writing to the Company except that conditions (d) and (f) are not capable of being waived.

If any condition above is not fulfilled or satisfied (or waived by the First Subscriber) on or before the First Long Stop Date (or another date as mutually agreed by the parties), then the subscription of the Convertible Bonds contemplated under the First Subscription Agreement shall lapse, determine and be of no further effect, and no party shall be liable to the other save and except antecedent breach committed before the termination of the First Subscription Agreement.

Conditions Precedent to the Second Subscription Agreement

Completion of the Second Subscription Agreement shall be subject to and conditional upon the following:

• (a) the representations and warranties of the Company contained in the Subscription Agreements shall be true and correct on and as of the date of Completion (except to the extent that a representation and warranty speaks as of a specific date, in which case such representation and warranty shall be true and correct as of such specific date);

• (b) the Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in the Subscription Agreements that are required to be performed or complied with by it on or before the Completion;

• (c) there shall not have occurred a Material Adverse Effect since the date of the Subscription Agreements;

• (d) all necessary waivers, approvals, consents, authorizations and confirmation of any relevant party, including but not limited to the independent Shareholders and Stock Exchange, required to be obtained on the part of the Company in relation to the transactions contemplated under the Subscription Agreements having been obtained;

• (e) the Company shall have produced to the Subscribers a certified copy of the board resolutions of the Company approving the entering into and performance of its obligations of the Subscription Agreements, and all agreements and documents and all transactions contemplated under the Subscription Agreements;

• (f) the Stock Exchange having granted the listing of, and the permission to deal in, the Conversion Shares; and such grant not having been revoked as at the date of Completion; and

• (g) the Company or its subsidiaries having entered into legally binding contracts with its customers for the procurement of no less than 5 million pieces of “Anti-counterfeiting + Lottery” devices.

The Second Subscriber may waive the conditions precedent referred to above at any time before the Second Long Stop Date by notice in writing to the Company except that conditions (d) and (f) are not capable of being waived.

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If any condition above is not fulfilled or satisfied (or waived by the Second Subscriber) on or before the Second Long Stop Date (or another date as mutually agreed by the parties), then the subscription of the Convertible Bonds contemplated under the Second Subscription Agreement shall lapse, determine and be of no further effect, and no party shall be liable to the other save and except antecedent breach committed before the termination of the Second Subscription Agreement.

Date of Completion

Completion of the Subscription Agreements will take place at a date and time to be fixed between the Company and the respective Subscriber and in any event within 48 hours following receipt by the respective Subscriber of a written confirmation given by the Company that the conditions precedent referred to above have been satisfied. Completion of the First Subscription Agreement and the Second Subscription Agreement may or may not take place on the same date/time and is not inter-conditional with each other.

Company’s Covenants

Under each of the Subscription Agreements, all future indebtedness of the Company will be subordinated to the Convertible Bonds, but the Company can exercise its sole discretion to repay its existing indebtedness at any time without any of the Subscriber’ consent. The Company has received the consent from the bondholder of the Existing CBs to issue the Convertible Bonds.

PRINCIPAL TERMS OF THE CONVERTIBLE BONDS

Details of the principal terms of the Convertible Bonds are set out as follows:

Issuer:	The Company
Principal amount:	An aggregate of HK$100,000,000.
Interest:	The Convertible Bonds shall bear interest at the rate of 7% per annum. The
	interest will be payable by the Company semi-annually in arrears on the
	Interest Repayment Date.
Maturity Date:	18 months after the Bond Issue Date, being the 540thday after the Bond
	Issue Date.
Conversion right:	Subject to and upon compliance with the terms and conditions of the
	Convertible Bonds and all regulatory requirements (including without
	limitation the Takeovers Code and the GEM Listing Rules), the conversion
	rights attached to the Convertible Bonds shall be exercisable during the
	conversion period commencing from the Bond Issue Date up to 7 days
	immediately preceding the Maturity Date. Upon exercise of any conversion
	rights attached to the Convertible Bonds, the Company will allot the number
	of Conversion Shares in respect of which conversion rights have been
	exercised. Conversion rights attached to the Convertible Bonds will be
	restricted to the extent the issue and allotment of the Conversion Shares
	upon conversion of the Convertible Bonds aggregated with the Shares then
	held by the Bondholder, its associates and parties acting in concert with any
	of them not resulting in (i) the Company’s non-compliance with the
	minimum public shareholding level requirement under the GEM Listing
	Rules or other relevant requirements under the GEM Listing Rules; nor (ii)
	a change of control as defined in the Takeovers Code.

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Ranking of The Conversion Shares shall rank pari passu in all aspects with the Shares Conversion Shares: in issue as at the Conversion Date.

Conversion Price: HK$0.29 per Conversion Share which, for the avoidance of doubt, shall be subject to adjustment provided in the Convertible Bonds. The Conversion Price represents:

• (i) a premium of approximately 26.1% to the closing price per Share of HK$0.23 as quoted on the Stock Exchange on the date of the Subscription Agreements;

• (ii) a premium of approximately 26.6% to the average closing price per Share of approximately HK$0.229 as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the date of the Subscription Agreements, and

• (iii) a premium of approximately 25.0% to the average closing price per Share of approximately HK$0.232 as quoted on the Stock Exchange for the last ten consecutive trading days immediately prior to the date of the Subscription Agreements.

The conversion price of the Convertible Bonds was determined based on arm’s length negotiations between the parties with reference to the prevailing market prices of the Shares as quoted on the Stock Exchange.

• Conversion period: The period commencing from the Bond Issue Date and ending on 7 days immediately preceding the Maturity Date.

Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$0.29 per Conversion Share, the Convertible Bonds will be convertible into 344,827,586 Shares, representing approximately 7.83% of the issued share capital of the Company as at the date of this announcement and approximately 7.26% of the issued share capital of the Company as enlarged by the issue and allotment of the Conversion Shares. The Conversion Shares will be fully paid and rank pari passu in all respects with the Shares then in issue on the relevant conversion date.

• Redemption at Unless previously redeemed, converted or purchased and cancelled in the Maturity: circumstances set out in the terms of the Convertible Bonds, each of the Convertible Bonds will be redeemed by the Company on the Maturity Date at 100% of its principal amount outstanding plus the amount of interest accrued but remains unpaid. The Company may not redeem the Convertible Bonds at its option prior to the Maturity Date except as described below.

• Redemption at the At any time after the Bond Issue Date, the Company may, having given not option of the less than 7 Business Days’ notice to the Bondholders, redeem the Company: Convertible Bonds in whole or in part (in amount of HK$10,000,000 or integral multiples thereof), at their principal amounts plus interest accrued and unpaid until the date of such redemption.

• Redemption at the In the event the Shares cease to be listed or admitted to trading on the Stock option of the Exchange (“ Delisting ”), each Bondholder shall have the right, at such Bondholder(s): Bondholder’s option, to require the Company to redeem all (but not less than all) of such Bondholder’s Convertible Bonds on the twentieth Business

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Days after notice has been given to any Bondholder regarding the Delisting, or if such notice is not given, the twentieth Business Day after the Delisting at their principal amount.

• Ranking: The Convertible Bonds constitute direct, senior, unconditional, unsubordinated and unsecured obligations of the Company and rank pari passu and without any preference or priority among themselves. The payment obligations of the Company under the Convertible Bonds shall, save for such exceptions as may be provided by provisions of applicable law that are both mandatory and of general application, at all times rank at least equally with all of its other present and future direct, senior, unsecured, unconditional and unsubordinated obligations.

• Transferability: Bondholders may transfer the Convertible Bonds to the transferee other than to connected person(s) of the Company subject to compliance with any applicable laws, rules and regulations, and with the prior written consent of the Company.

• Voting rights: The Convertible Bonds shall not confer on the Bondholder(s) the right to vote at any general meetings of the Company.

Listing: The Convertible Bonds will not be listed on the Stock Exchange or any other stock exchange.

• Application will be made by the Company for the listing of, and the permission to deal in, the Conversion Shares, which will be allotted and issued under the General Mandate.

Undertakings by the The Company undertakes, among other things: Company:

• (a) not to make any reduction of its ordinary share capital or any uncalled liability in respect thereof or of any share premium account or capital redemption reserve fund (except, in each case, as required by law); and

• (b) to keep available, free from pre-emptive or other rights, such number of Shares as would be required to be issued on conversion of all the Convertible Bonds from time to time remaining outstanding and to satisfy in full all other rights of conversion into or subscription for Shares and shall ensure that all Shares delivered on conversion of the Convertible Bonds will be duly and validly issued as fully-paid and nonassessable, provided that the Company shall not be prohibited from purchasing its own Shares to the extent permitted by applicable laws and regulations.

• Event of Default: If any of the following events (each an “ Event of Default ”) occurs, any Bondholder(s) shall be entitled to give notice to the Company that the Convertible Bonds are, and they shall immediately become, due and payable:

• (i) the Company fails to pay any amount due on any Interest Payment Date or on the Maturity Date in accordance with the terms and conditions of the Convertible Bonds provided the Company shall have 5 Business Day period to remedy such breach;

• (ii) the Company fails to duly and punctually perform or comply with

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any of its obligations or undertakings under the terms and conditions of the Convertible Bonds (if any) and, in respect only of a failure which in the reasonable opinion of the Bondholder is capable of remedy and which is not a failure to pay money, does not remedy such failure to the Bondholder’s satisfaction within thirty (30) days (or such longer period as the Bondholder may approve) after receipt of written notice from the Bondholder requiring it to do so;

• (iii) any representation or warranty made or deemed to be made by the Company in or in connection with the terms and conditions of the Convertible Bonds, proves to have been untrue, incorrect or misleading in any material respect reasonably considered by the Bondholder to be material;

• (iv) the shares of the Company cease to be listed on the Stock Exchange or trading in such shares is suspended for a period of longer than one hundred and eighty (180) consecutive trading days and the reason therefor is not acceptable to the Bondholder provided that Bondholder shall have in good faith given the Company the opportunity to provide full explanations of the reasons for the cessation or suspension and have informed the Company in writing its grounds for rejecting such reasons put forward by the Company;

• (v) the Company ceases or threatens to cease to carry on business or any substantial part thereof or changes or threatens to change materially the nature or scope of the principal businesses or the Company disposes of or threatens to dispose of or any government or other authority expropriates or threatens to expropriate all or any substantial part of such businesses or assets without the written consent of the Bondholder;

• (vi) the Company defaults or receives notice of default under any agreement or obligation relating to borrowing or any indebtedness of the Company becomes payable or capable of being declared payable before its stated maturity or is not paid when due or any charge, guarantee or other security now or hereafter created by the Company becomes enforceable provided such default continues for more than thirty (30) days;

• (vii) a creditor takes possession of all or any part of the business or assets of the Company or any execution or other legal process is enforced against the business or any assets of the Company and is not discharged within ten (10) days;

• (viii) a petition is presented or a proceeding is commenced or an order is made for the winding-up of the Company or for the appointment of a liquidator, receiver, administrator, trustee or similar officer of the Company on all or any part of its business or assets;

• (ix) if the Company shall become a party to any material litigation or arbitration or administrative or criminal proceedings and an order or judgement has been made against the Company with a consequence that is reasonably considered to be a Material Adverse Effect;

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• (x) it is or will become unlawful for the Company to perform or comply with any obligations under the terms and conditions of the Convertible Bonds;

• (xi) the Company stops or suspends payments to its creditors generally for a period of more than thirty (30) days or is unable or admits its inability to pay its debts as they fall due or seeks to enter into any composition or other arrangement with its creditors or is declared or becomes bankrupt;

• (xii) any event which has an effect equivalent or similar to any of the events described in any of the paragraphs set out in this Clause occurs;

• (xiii) the terms and conditions of the Convertible Bonds or any provision hereof (which is reasonably regarded as material by the Bondholder) ceases for any reason to be in full force and effect or is terminated or jeopardised or becomes invalid or unenforceable or if there is any dispute regarding such potential jeopardy, invalidity or enforceability or if there is any purported termination of the same or it becomes impossible or unlawful for the Company or any party thereto to perform all or any of its rights, powers and remedies hereunder or thereunder for the Bondholder to exercise all or any of its rights, powers and remedies hereunder or thereunder; or;

• (xiv) any situation occurs which in the reasonable opinion of the Bondholder gives grounds to believe that a material adverse change in the business, operation, financial standing or any other part of the Company has occurred or that the ability of the Company to perform its obligations hereunder has been or will be materially and adversely affected.

Adjustments to The Conversion Price for the Convertible Bonds will be subject to Conversion Price: adjustment in certain events as provided in the terms and conditions of the Convertible Bonds and subject to the extent permitted under the General Mandate, a summary of which is set out below:

• (i) any alteration to the nominal value of the Shares as a result of consolidation, subdivision or reclassification;

• (ii) the issue of Shares to all or substantially all Shareholders as a class by the Company by way of rights, or issue or grant to all or substantially all Shareholders as a class, by way of rights, of options, warrants or other rights to subscribe for or purchase any Shares, in each case at less than 80% of the average of the closing price for Share for the five consecutive trading days ending on the trading day immediately preceding such date (the “ Current Market Price ”) per Share on the date of the announcement of the terms of such issue or grant;

• (iii) the issue of any securities (other than Shares or options, warrants or other rights to subscribe or purchase Shares or securities convertible or exchangeable into Shares) to all or substantially all Shareholders as a class by the Company, by way of rights, or the grant to all or substantially all Shareholders as a class, by way of rights, of any

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options, warrants or other rights to subscribe for or purchase any securities (other than Shares or options, warrants or other rights to subscribe or purchase Shares);

• (iv) the Company shall issue (otherwise than as mentioned in (ii) above) wholly for cash any Shares (other than Shares issued on the exercise of Conversion Rights or on the exercise of any other rights of conversion into, or exchange or subscription for, Shares), or issue or grant (otherwise as mentioned in (ii) above) options, warrants or other rights to subscribe or purchase Shares, in each case at a price per Share which is less than 80% of the Current Market Price per Share on the date of the announcement of the terms of such issue or grant;

• (v) save in the case of an issue of securities arising from a conversion or exchange of other securities in accordance with the terms applicable to such securities themselves falling within the provisions of this paragraph, if and whenever the Company or any of its subsidiaries (other than as mentioned in paragraphs (ii), (iii) or (iv) above) or (at the direction or request of or pursuant to any arrangements with the Company or any of its subsidiaries) any other company, person or entity shall issue, wholly for cash, any securities (other than the Convertible Bonds) which by their terms of issue carry rights of conversion into, or exchange or subscription for, Shares issued or to be issued by the Company upon conversion, exchange or subscription at a consideration per Share receivable by the Company which is less than 80% of the Current Market Price per Share on the date of the announcement of the terms of such issue; and

• (vi) any modification of the rights of conversion, exchange or subscription attaching to any such securities mentioned above (other than in accordance with the terms applicable to such securities) so that the consideration per Share (for the number of Shares available on conversion, exchange or subscription following the modification) is less than 80% of the Current Market Price per share on the last dealing day preceding the date of announcement of the proposals for such modification.

REASONS FOR THE ISSUE OF CONVERTIBLE BONDS AND USE OF PROCEEDS

The principal activities of the Group are provision of (i) lottery-related services; (ii) internet plus services (solution and supply chain), and (iii) manufacturing and distribution of personal protective equipment and (iv) other services.

The Directors consider that raising funds by issuing Convertible Bonds provides an opportunity for the Company to enhance its working capital and strengthen its capital base and financial position. The Directors consider that the issue of the Convertible Bonds is an appropriate means of raising additional capital for the Company since it will not have an immediate dilution effect on the shareholding of the existing Shareholders.

The Group started to promote an anti-counterfeiting traceability solution with anti-counterfeiting packaging devices and online anti-counterfeiting information verification platform as the core contents since 2019. The cooperation leveraged the Group’s experience in the lottery industry, “Internet Plus” technology and interactive marketing to seize good development opportunities and

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enrich the anti-counterfeiting business landscape of the Group. In 2020, the Group has obtained the authorization to use two patented technologies, namely product anti-counterfeiting packaging device, and adhesive parts and components and anti-counterfeiting packaging device (together, the “ Patented Technologies ”). The authorization allows the Group to utilize the solution with the Patented Technologies for market development and apply such solution in brand owners’ products, all under proper legal protection. As of July 2021, the Group has contracted with brand owners in three different industries, namely the tea leaves, natural food and cosmetics e-commerce platform industries for the application of the anti-counterfeiting devices on the brand owners’ products. Meanwhile, the Group entered into the Licensing and Master Service Agreement with Shenzhen Ficus Technology Holdings Ltd., the intellectual property owner of the Patented Technologies, enabling the Group to comply with the requirement of necessary approval for conducting the relevant business and support.

During the process of the development of the anti-counterfeiting business, the Group has gained the know-how on the market trend and product promotion and achieved initial success as a result. In the view of an increasing consumer base and the expanding business scope, the Board decided to continue the anti-counterfeiting business development. The Group needs to meet the capital requirement for existing and potential orders, ensuring a sufficient working capital for the production process and for the finished products to be delivered with contracted quality and quantity. Also, the capital will be used for marketing and related businesses.

In respect of other businesses of the Group, the Group has provided efficient and convenient “Internet Plus” solutions for varied industries in the past, such as interactive marketing solution, which can be quickly modified to suit different application scenarios. The smart supply chain management technology of the “Internet Plus” business has supported the business cooperation with large-sized e-commerce platform, and the Group is exploring the possibility of new channels. The healthy and sufficient cash flow will help the Group to capture the profit growth opportunities from the diversified businesses.

The aggregate gross proceeds from the issue of the Convertible Bonds will be HK$100 million. The aggregate net proceeds of approximately HK$100 million from the issue of the Convertible Bonds are intended to be applied as to (i) approximately HK$ 35 million for the development and promotion of anti-counterfeiting business of the Group, including but not limited to (a) costs of anti-counterfeiting device; and (b) improving nationwide sales capability and expanding marketing network; (ii) approximately HK $20 million is intended to be used for the repayment of loans and other payables; and (iii) the remaining of the net proceeds in the approximate amount of HK$ 45 million for the operating cost and general working capital of the Company. The net issue price for each Conversion Share is approximately HK$ 0.29.

In light of the above, the Directors consider that the terms of the Subscription Agreements, which were arrived at after arm’s length negotiations between the Company and each of the Subscribers, are on normal commercial terms, fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

FUND RAISING ACTIVITIES BY THE COMPANY IN THE PAST TWELVE MONTHS

Save for the fund raising activities mentioned below, the Board confirms that there has not been any fund raising exercise made by the Company in the twelve months immediately preceding the date of this announcement.

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Date of Event Announcement

Net proceeds Intended use of Actual use of the proceeds proceeds

8 June 2021 Issuance of 133,705,046 Approximately Repayment of Not applicable – loan capitalisation Shares HK$34.8 loans subject to under the General million independent Mandate at HK$0.26 per Shareholders’ Share to three connected approval persons 8 June 2021 Issuance of 58,606,927 Approximately Repayment of HK$15.2 loan capitalisation Shares HK$15.2 loans million has been under the General million used as intended Mandate at HK$0.26 per Share to two Independent Third Parties

EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY

To the best knowledge of the Directors and the Company, assuming that no other Shares will be issued, the shareholding structure of the Company (i) as at the date of this announcement; (ii) immediately after conversion in full of the Existing CBs; (iii) immediately after conversion in full of the Convertible Bonds without the conversion of the Existing CBs at the initial Conversion Price; and (iv) immediately after conversion in full of the Existing CBs and the Convertible Bonds at the initial Conversion Price is as follows:

Shareholders Directors Madam Cheung Kwai Lan Mr. Cheuk Ka Chun Kevin Dr. Cheng Yanji Mr. Chau Wai Wah Fred Sub-total Sinopharm Traditional Chinese Medicine Overseas Holdings Limited Best Frontier Investments Limited (Note 1) Integrated Asset Management (Asia) Limited (“Integrated Asset”) and its concert parties (Note 2) Sub-total First Subscriber Second Subscriber Sub-total Public Shareholders Total	As at the date of this announcement Immediately after conversion in full of the Existing CBs Immediately after conversion in full of the Convertible Bonds without the conversion of the Existing CBs Immediately after conversion in full of the Existing CBs and the Convertible Bonds Number of Shares Approximate % Number of Shares Approximate % Number of Shares Approximate % Number of Shares Approximate % 4,656,000 0.11 4,656,000 0.10 4,656,000 0.10 4,656,000 0.09 178,000 0.00 178,000 0.00 178,000 0.00 178,000 0.00 1,965,000 0.04 1,965,000 0.04 1,965,000 0.04 1,965,000 0.04 3,800,000 0.09 3,800,000 0.08 3,800,000 0.08 3,800,000 0.07
	10,599,000 0.24 10,599,000 0.22 10,599,000 0.22 10,599,000 0.20 650,000,000 14.76 650,000,000 13.51 650,000,000 13.69 650,000,000 12.61 632,920,856 14.37 632,920,856 13.16 632,920,856 13.33 632,920,856 12.28 526,283,000 11.95 931,825,986 19.37 526,283,000 11.08 931,825,986 18.08
	1,809,203,856 41.08 2,214,746,842 46.04 1,809,203,856 38.10 2,214,746,842 42.97 - - - - 172,413,793 3.63 172,413,793 3.35 - - - - 172,413,793 3.63 172,413,793 3.35
	- - - - 344,827,586 7.26 344,827,586 6.70 2,584,180,878 58.68 2,584,180,878 53.74 2,584,180,878 54.42 2,584,180,878 50.13
	4,403,983,734 100.00 4,809,526,720 100.0 4,748,811,320 100.00 5,154,354,306 100.00

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Notes:

1. The 632,920,856 Shares were held by Best Frontier Investments Limited which was owned as to 99.89% and 0.11% by Madam Cheung Kwai Lan and Mr. Chan Tung Mei who are spouses to each other.

2. The 526,283,000 Shares were owned by Integrated Asset which was wholly-owned by Mr. YAM Tak Cheung. 8% coupon convertible bonds in aggregate amount of HK$89,625,000 (the “ Existing CBs ”) for a term of six months maturing on 17 July 2017 were issued to Integrated Asset pursuant to the first amendment agreement dated 18 January 2017 approved by the Shareholders at the extraordinary general meeting of the Company held on 29 March 2017. The Company received a written consent from Integrated Asset, on which the maturity date of the Existing CBs would be extended for further six months to 17 January 2018. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset upon conversion of the Existing CBs in full. The amended conversion price was HK$0.359 per conversion share subject to adjustment.

Pursuant to the second amendment agreement approved by the Shareholders at the extraordinary general meeting of the Company held on 18 April 2018, the amendments were that the maturity date of the Existing CBs was extended for six months from 17 January 2018 to 17 July 2018, and further extended to 17 January 2019 upon a prior written consent from Integrated Asset. Such written consent from Integrated Asset has been received by the Company. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset upon conversion of the Existing CBs in full.

Pursuant to the third amendment agreement approved by the Shareholders at the extraordinary general meeting of the Company held on 19 March 2019, the amendments were that the maturity date of the Existing CBs was extended for six months from 17 January 2019 to 17 July 2019, and further extended to 17 January 2020 upon a prior written consent from Integrated Asset. Such written consent from Integrated Asset has been received by the Company. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset upon conversion of the Existing CBs in full.

As a result of the adjustments of the Existing CBs on 10 May 2019 upon the allotment and issue of the consideration shares to Sinopharm Traditional Chinese Medicine Overseas Holdings Limited, a maximum number of 263,602,941 Shares would be allotted and issued to Integrated Asset upon conversion of the Existing CBs in full. The adjusted conversion price was HK$0.34 per conversion share subject to further adjustment.

Pursuant to the fourth amendment agreement approved by the Shareholders at the extraordinary general meeting of the Company held on 25 March 2020, the amendments were that the maturity date of the Existing CBs was extended for six months from 17 January 2020 to 17 July 2020, and further extended to 17 January 2021 upon a prior written consent from Integrated Asset. Such written consent from Integrated Asset has been received by the Company. A maximum number of 263,602,941 Shares would be allotted and issued to Integrated Asset upon conversion of the Existing CBs in full.

An ordinary resolution was passed at the extraordinary general meeting of the Company held on 22 March 2021 to approve the fifth amendment agreement to amend some principal terms of the Existing CBs, including to extend the maturity date of the Existing CBs for one year from 17 January 2021 to 17 January 2022. Its conversion price shall be amended from HK$0.34 to HK$0.221 per conversion share subject to adjustment), which can be converted into the maximum number of 405,542,986 Shares. The interest rate of the Existing CBs hall be increased to 10% per annum and paid annually (the “ Fifth Amendments ”). Save for the Fifth Amendments, all other terms and conditions of the Existing CBs shall remain unchanged.

GENERAL

Completion is subject to the satisfaction of the conditions precedent therein. In addition, any or both of the Subscription Agreements may be terminated in certain circumstances. As any or both of the Subscription Agreements may or may not complete, holders of securities of the Company and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

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LISTING RULES IMPLICATIONS

The Conversion Shares will be issued and allotted under the General Mandate. The General Mandate entitles the Directors to issue, allot and deal with up to 857,944,926 Shares, representing 20% of the issued share capital of the Company as at the date of the AGM. Since the date of the AGM up to and including the date of this announcement, 58,606,927 Shares have been allotted and issued on 30 June 2021 under the General Mandate to two subscribers (who are Independent Third Parties) pursuant to two loan capitalisation agreements respectively dated 8 June 2021. Subject to approval of independent Shareholders at the extraordinary general meeting of the Company to be held, a total of 133,705,046 Shares will be allotted and issued to three subscribers who are connected persons of the Company under three loan capitalisation agreements dated 8 June 2021. For details of the said loan capitalisation agreements, please refer to the announcements of the Company dated 8 June 2021 and 24 June 2021.

Accordingly, if the aforesaid 133,705,046 loan capitalisation Shares are allotted and issued under the General Mandate, the General Mandate is sufficient for the allotment and issue of all the Conversion Shares. The maximum of 344,827,586 Conversions Shares which may be issued under the full conversion of all Convertible Bonds represent approximately 40.19% of the General Mandate. The allotment and issue of the Conversion Shares by the Company upon exercise of the conversion rights under the Convertible Bonds is not subject to Shareholders’ approval.

DEFINITIONS

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

“AGM”	the annual general meeting of the Company held on 20
	November 2020
“associates”	has the meaning ascribed thereto in the GEM Listing
	Rules
“Board”	the board of Directors
“Bondholder(s)”	holder(s) of the Convertible Bond(s) from time to time
“Bond Issue Date”	the date on which the Convertible Bonds are issued,
	being the date of Completion
"Business Day"	a day (other than Saturday or Sunday or public holiday)
	on which licensed banks in Hong Kong are open for
	business during their normal business hours
“Company”	Sinopharm Tech Holdings Limited, a company
	incorporated in Cayman Islands with limited liability,
	the Shares of which are listed on GEM of the Stock
	Exchange (Stock Code: 8156)
“Completion”	completion of the Subscription Agreements
“Conversion Date”	a day when the conversion rights attaching to the
	Convertible Bonds are exercised

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“Conversion Price”

• “Conversion Shares”

• “Convertible Bonds”

“Director(s)”

“Existing CBs”

• “First Long Stop Date”

• “First Subscriber”

• “First Subscription Agreement”

• “GEM”

• “GEM Listing Rules”

“General Mandate”

• “Group”

• “HK$”

• “Hong Kong”

the conversion price of the Convertible Bonds, initially being HK$0.29 per Conversion Share (subject to adjustments)

the Shares which fall to be allotted and issued upon the exercise of the conversion rights attaching to the Convertible Bonds

the 7% coupon Convertible Bonds due 2023 in the aggregate amount of HK$100,000,000 to be issued by the Company to the Subscribers pursuant to the Subscription Agreements

the director(s) of the Company

• 10% coupon convertible bonds in aggregate amount of HK$89,625,000 due 17 January 2022 issued to Integrated Asset Management (Asia) Limited by the Company pursuant to the subscription agreement dated 13 January 2014 (as amended by the first amendment agreement, the second amendment agreement, the third amendment agreement, the fourth amendment agreement and the fifth amendment agreement)

the 14th calendar day from the date of the First Subscription Agreement, being 3 September 2021

• Expert Global Enterprises Limited, a company established in the British Virgin Islands with limited liability

• the conditional subscription agreement dated 20 August 2021 and entered into between the Company and the First Subscriber, an Independent Third Party in relation to the issuance of the Convertible Bonds in the principal amount of HK$50,000,000, as varied, amended, modified, varied or supplemented in writing by the parties thereto from time to time

GEM of the Stock Exchange

the Rules Governing the Listing of Securities on GEM

the general mandate granted to the Directors at the annual general meeting of the Company held on 20 November 2020, pursuant to which a maximum of 857,944,926 new Shares may be allotted and issued

the Company and its subsidiaries

Hong Kong dollars, the lawful currency of Hong Kong

Hong Kong Special Administrative Region of the People’s Republic of China

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• “Independent Third Party(ies)”

third party(ies) independent of and not connected with the Company and any of its connected persons within the meaning of the GEM Listing Rules

• “Interest Repayment Date”

• (i) the first payment of interest being made within six months from the Bond Issue Date, (ii) the second payment of interest being made within twelve months from the Bond Issue Date and (iii) with the last payment of interest being made on the Maturity Date

• “Material Adverse Effect”

• any condition, circumstances or change that has a material adverse effect on the business, assets (including intangible assets), liabilities, financial conditions, property or results of operations of the Company

• “Maturity Date”

• 18 months after the Bond Issue Date , being the 540[th] day after the Bond Issue Date

• “Second Long Stop Date”

• the 60th calendar day from the date of the First Subscription Agreement, being 19 October 2021

• “Second Subscriber”

• Japan Equity Value Investment Fund, an exempted company established in Cayman Islands with limited liability

• “Second Subscription Agreement”

• the conditional subscription agreement dated 20 August 2021 and entered into between the Company and the Second Subscriber, an Independent Third Party in relation to the issuance of the Convertible Bonds in the principal amount of HK$50,000,000, as varied, amended, modified, varied or supplemented in writing by the parties thereto from time to time

• “Shareholder(s)” holder(s) of the Share(s)

• “Shares”

• the ordinary share(s) of nominal value HK$0.0125 each in the share capital of the Company

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “Subscribers”

• collectively the First Subscriber and the Second Subscriber, each a Subscriber

• “Subscription Agreements”

collectively the First Subscription Agreement and the Second Subscription Agreement

• “Takeovers Code”

the Hong Kong Code on Takeovers and Mergers

• “%”

per cent.

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By Order of the Board Sinopharm Tech Holdings Limited 國藥科技股份有限公司 CHAN Ting Chairperson

Hong Kong, 20 August 2021

As at the date of this announcement, the Board comprises Mr. CHAN Ting, Mr. LIAO Zhe and Mr. CHEUK Ka Chun Kevin as executive Directors, Madam CHEUNG Kwai Lan and Dr. CHENG Yanjie as nonexecutive Directors and Mr. LAU Fai Lawrence, Dr. LIU Ta-pei and Mr. CHAU Wai Wah Fred as independent non-executive Directors.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the “Latest Listed Company Information” page of the GEM website at www.hkgem.com for a minimum period of 7 days from the date of its publication and on the website of the Company at www.sinopharmtech.com.hk.

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