Transmit Entertainment Limited — Proxy Solicitation & Information Statement 2015

Jul 3, 2015

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 to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Pegasus Entertainment Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for onward transmission to the purchaser or the 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.

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Pegasus Entertainment Holdings Limited 天 馬 影 視 文 化 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1326)

PROPOSED SHARE SUBDIVISION, PROPOSED CHANGE IN BOARD LOT SIZE

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed ‘‘Definitions’’ of this circular.

A notice convening the EGM to be held at Rooms 1801–02, Westlands Centre, 20 Westlands Road, Quarry Bay, Hong Kong at 11:30 a.m. on Tuesday, 21 July 2015 is set out on pages 11 to 12 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are advised to read the notice and to complete and return the enclosed form of proxy, in accordance with the instructions printed thereon, to the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited at Level 22, 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 EGM or any adjourned meeting thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the EGM if you so wish, and in such event, the instrument appointing the proxy shall be deemed to be revoked.

3 July 2015

CONTENTS

	Page
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

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EXPECTED TIMETABLE

The expected timetable relating to the Share Subdivision and the Change in Board Lot Size and the associated trading arrangement are as follows:

	Time	Date
Latest time for lodging form of proxy for the	11:30 a.m.	Sunday, 19 July 2015
EGM (not less than 48 hours prior to the
time of the EGM)
Expected date of the EGM to approve the	11:30 a.m.	Tuesday, 21 July 2015
Share Subdivision
Publication of poll results of the EGM		Tuesday, 21 July 2015

The following events are conditional on the fulfilment of the conditions for the implementation of the Share Subdivision as set out in the section headed ‘‘Conditions of the Share Subdivision’’ in this circular.

	Time	Date
Effective date of the Share Subdivision		Wednesday, 22 July 2015
First day of free exchange of Existing Share		Wednesday, 22 July 2015
Certificates in brown for New Share
Certificates in green for the Subdivided
Shares
Dealing in the Subdivided Shares commences	9:00 a.m.	Wednesday, 22 July 2015
Original counter for trading in the existing	9:00 a.m.	Wednesday, 22 July 2015
Shares in board lots of 4,000 Shares
temporarily closes
Temporary counter for trading in the	9:00 a.m.	Wednesday, 22 July 2015
Subdivided Shares in board lots of 16,000
Subdivided Shares (in the form of Existing
Share Certificates in brown) opens
Original counter for trading in the Subdivided	9:00 a.m.	Wednesday, 5 August 2015
Shares in board lots of 8,000 Subdivided
Shares (in the form of New Share Certificates
in green for Subdivided Shares) re-opens
Parallel trading in the existing Shares and the	9:00 a.m.	Wednesday, 5 August 2015
Subdivided Shares (in form of Existing Share
Certificates in brown and New Share
Certificates in green) commences

– 1 –

EXPECTED TIMETABLE

Time Date Temporary counter for trading in the board lots 4:00 p.m. Tuesday, 25 August 2015 of 16,000 Subdivided Shares (in the form of Existing Share Certificates in brown) closes Parallel trading in the existing Shares and the 4:00 p.m. Tuesday, 25 August 2015 Subdivided Shares (in the form of Existing Share Certificates in brown and the New Share Certificates in green) ends Last day for free exchange of Existing Share 4:00 p.m. Thursday, 27 August 2015 Certificates in brown for New Share Certificates in green

• Note: All times and dates in this circular refer to Hong Kong local times and dates. Dates or deadlines specified in the expected timetable above are indicative only and may be extended or varied by the Company.

Further announcement will be made by the Company for changes, if any, in the expected timetable for implementation of the Share Subdivision and the Change in Board Lot Size as well as the associated trading arrangements as aforesaid.

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DEFINITIONS

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

• ‘‘Board’’ the board of Directors ‘‘Business Day(s)’’ a day (other than Saturdays or Sunday) on which licensed banks are open for business in Hong Kong

• ‘‘CCASS’’ the Central Clearing and Settlement System established and operated by HKSCC

‘‘Change in Board Lot Size’’ the proposed change in board lot size of the Shares for trading on the Stock Exchange from 4,000 Shares to 8,000 Subdivided Shares upon the Share Subdivision becoming effective ‘‘Company’’ Pegasus Entertainment Holdings Limited, a company incorporated under the laws of the Cayman Islands with limited liability and the shares of which are listed on the Stock Exchange (Stock Code: 1326) ‘‘Director(s)’’ the director(s) of the Company ‘‘EGM’’ extraordinary general meeting of the Company to be convened for the purpose of considering and, if thought fit, approving the Share Subdivision

• ‘‘Existing Share Certificate(s)’’ existing form of certificate(s) of the Shares

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘HK$’’ Hong Kong dollar(s), the lawful currency of Hong Kong

• ‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited

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

• ‘‘Latest Practicable Date’’ 30 June 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion herein

• ‘‘Listing Committee’’ has the meaning ascribed to it in the Listing Rules ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

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DEFINITIONS

‘‘New Share Certificate(s)’’ new form of certificate(s) of the Subdivided Shares

• ‘‘Option(s)’’ the option(s) to be granted under the Share Option Scheme to subscribe for shares of the Company in accordance with the Share Option Scheme which remained ungranted as at the Latest Practicable Date

• ‘‘Share(s)’’ ordinary share(s) in the share capital of the Company, the par value of which being of HK$0.01 each prior to the Share Subdivision

‘‘Share Option Scheme’’ the share option scheme adopted by the Company on 5 October 2012

• ‘‘Share Subdivision’’ the proposed subdivision of each Share into four (4) Subdivided Shares as described in this circular

• ‘‘Shareholders’’ holder(s) of the Share(s) or Subdivided Share(s) as the case may be

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Subdivided Share(s)’’ ordinary share(s) of HK$0.0025 each in the share capital of the Company upon the Share Subdivision becoming effective

• ‘‘Warrants’’ the 67,000,000 unlisted warrants convertible into 67,000,000 new Shares which remained unexercised as at the Latest Practicable Date

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LETTER FROM THE BOARD

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Pegasus Entertainment Holdings Limited 天 馬 影 視 文 化 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1326)

Executive Directors:

Mr. Wong Pak Ming (Chairman) Ms. Wong Yee Kwan Alvina Mr. Wong Chi Woon Edmond

Independent non-executive Directors: Mr. Lam Kam Tong Mr. Lo Eric Tien-cheuk Mr. Tang Kai Kui Terence

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

Principal place of business in Hong Kong: Rooms 1801–02 Westlands Centre 20 Westlands Road Quarry Bay Hong Kong 3 July 2015

To the Shareholders and the holders of Warrants

Dear Sir or Madam,

PROPOSED SHARE SUBDIVISION, PROPOSED CHANGE IN BOARD LOT SIZE AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Company’s announcement dated 23 June 2015 in which it was announced that, amongst other things, the Board proposed to (i) subdivide each of the existing issued and unissued Shares of par value of HK$0.01 each in the share capital of the Company into four (4) Subdivided Shares of HK$0.0025 each; and (ii) change the board lot size for trading on the Stock Exchange from 4,000 Shares to 8,000 Subdivided Shares after and conditional upon the Share Subdivision becoming effective.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with the relevant information regarding the Share Subdivision and the Change in Board Lot Size and to give you notice of the EGM to be convened for the purpose of considering and, if thought fit, approving the Share Subdivision.

PROPOSED SHARE SUBDIVISION

The Board proposes that each of the existing issued and unissued Shares of HK$0.01 each in the share capital of the Company will be subdivided into four (4) Subdivided Shares of HK$0.0025 each. The Share Subdivision will become effective upon the fulfillment of the conditions set out under section headed ‘‘Conditions of Share Subdivision’’ below.

Conditions of Share Subdivision

The Share Subdivision is conditional upon (i) the passing of an ordinary resolution by the Shareholders at the EGM approving the Share Subdivision; and (ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Subdivided Shares and the Subdivided Shares which may fall to be issued upon exercise of the Warrants and the Options.

Assuming all the conditions are fulfilled, the Share Subdivision will become effective on the Business Day following the passing of the ordinary resolution at the EGM, which is expected to be held on 21 July 2015.

Effect of Share Subdivision

As at the Latest Practicable Date, the authorised share capital of the Company was HK$80,000,000 divided into 8,000,000,000 Shares of HK$0.01 each, of which 604,000,000 Shares were in issue and fully paid or credited as fully paid. Upon the Share Subdivision becoming effective, the authorised share capital of the Company will be HK$80,000,000 divided into 32,000,000,000 Subdivided Shares of HK$0.0025 each, of which 2,416,000,000 Subdivided Shares will be in issue and fully paid or credited as fully paid, assuming that no further Shares are repurchased or issued prior to the Share Subdivision becoming effective.

Upon the Share Subdivision becoming effective, the Subdivided Shares will rank pari passu in all respects with each other and the Share Subdivision will not result in any change in the rights of the Shareholders.

Adjustments to the Warrants

As at the Latest Practicable Date, the aggregate value of the outstanding Warrants was HK$62,310,000, carrying rights to subscribe for 67,000,000 new shares at an exercise price of HK$0.93 per Share.

As a result of the Share Subdivision, based on the relevant terms of the Warrants and upon the Share Subdivision becoming effective, the exercise price of the Warrants is expected to be adjusted from HK$0.93 per Share to HK$0.233 per Subdivided Share, where such adjustment will be effective from the close of business on the Business Day immediately preceding the date on which the Share Subdivision becomes effective.

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LETTER FROM THE BOARD

Save for the above adjustment, all other terms and conditions of the outstanding Warrants remain unchanged. Akron Corporate Finance Limited, an independent financial adviser to the Company, has reviewed and agreed with the adjustment to the outstanding Warrants which has been disclosed above.

Accordingly, the adjustment to the exercise price of the Warrants disclosed above will result a change in the number of shares of the Company falling to be issued upon exercise of the Warrants from 67,000,000 Shares to 267,424,892 Subdivided Shares.

Save as the Share Option Scheme, the Company had not adopted any other share option scheme as at the Latest Practicable Date. No Option had been granted by the Company under the Share Option Scheme since its adoption to the Latest Practicable Date. Save as disclosed above, the Company had no other outstanding share options, warrants or convertible securities to subscribe for any Share as at the Latest Practicable Date.

Exchange of share certificates

Upon the Share Subdivision becoming effective, the Shareholders may, during the period from 22 July 2015 to 27 August 2015 (both dates inclusive), submit their Existing Share Certificate(s) to the Company’s branch share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, in exchange for the New Share Certificate(s) free of charge. Thereafter, Existing Share Certificate(s) will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may from time to time be specified by the Stock Exchange) for each New Share Certificate issued or each Existing Share Certificate submitted for cancellation, whichever the number of certificates issued or cancelled is higher. It is expected that New Share Certificate(s) will be available for collection within 10 (ten) Business Days after the submission of the Existing Share Certificate(s) for exchange. Existing Share Certificate(s) will continue to be good evidence of legal title and may be exchanged for New Share Certificate(s) at any time at the expense of the Shareholders. The New Share Certificate(s) will be green in colour so as to be distinguished from the Existing Share Certificate(s) which are brown in colour.

PROPOSED CHANGE IN BOARD LOT SIZE

As at the Latest Practicable Date, the Shares were traded in a board lot of 4,000 Shares. The Board proposes to change the board lot size for trading on the Stock Exchange from 4,000 Shares to 8,000 Subdivided Shares after and conditional upon the Share Subdivision becoming effective. The Change in Board Lot Size will not affect any of the relative rights of the Shareholders.

Based on the closing price of HK$3.30 per Share (equivalent to HK$0.825 per Subdivided Share) as at the Latest Practicable Date, the value of each board lot of 8,000 Subdivided Shares, assuming the Share Subdivision and the Change in Board Lot Size had already become effective, would be approximately HK$6,600.

– 7 –

LETTER FROM THE BOARD

ODD LOT ARRANGEMENT

As it is expected that no odd lot of the Shares will be created as a result of the Share Subdivision and the Change in Board Lot Size, no odd lot arrangement to match the sales and purchase of odd lots will be made.

LISTING AND DEALINGS

An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Subdivided Shares and the Subdivided Shares which may fall to be issued upon exercise of the Warrants and the Options.

Subject to the granting of the listing of, and permission to deal in, the Subdivided Shares on the Stock Exchange, the Subdivided Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Subdivided Shares on the Stock Exchange or such other date as may be determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

No part of the equity or debt securities of the Company is listed or dealt in on any other stock exchanges other than the Stock Exchange and no such listing or permission to deal in is being or is currently proposed to be sought on any other stock exchanges other than the Stock Exchange.

REASONS FOR AND BENEFITS OF SHARE SUBDIVISION AND CHANGE IN BOARD LOT SIZE

Upon the proposed Share Subdivision becoming effective, the par value of each Share will decrease and the total number of Shares in issue will increase. The Share Subdivision will result in a downward adjustment to the trading price of the Shares. Based on the closing price of HK$3.30 per Share as quoted on the Stock Exchange as at the Latest Practicable Date, the market value per board lot of 4,000 Shares was HK$13,200. The estimated market value per new board lot of 8,000 Subdivided Shares will theoretically be reduced to HK$6,600 immediately upon the Share Subdivision and the Change in Board Lot Size becoming effective. The Board believes that the Share Subdivision will reduce the trading spread as well as the volatility of the trading price of the Shares and thus improving liquidity in the Subdivided Shares. The Board also considers that the proposed Change in Board Lot Size will maintain the trading value for each board lot at a reasonable level. Accordingly, the Board is of view that the Share Subdivision and the Change in Board Lot Size will enable the Company to attract more investors and broaden its Shareholders’ base.

Save for the expenses incurred by the Company in implementing the Share Subdivision and the Change in Board Lot Size, the Share Subdivision and the Change in Board Lot Size will not alter the underlying assets, business operations, management or financial position of

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LETTER FROM THE BOARD

the Company or the proportional interests of the Shareholders. The Board considers that the Share Subdivision and the Change in Board Lot Size will not have any material adverse effect on the financial position of the Group.

Accordingly, the Board considers that the implementation of the Share Subdivision and the Change in Board Lot Size are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

EGM

A notice convening the EGM to be held on 21 July 2015 at 11:30 a.m. at Rooms 1801– 02, Westlands Centre, 20 Westlands Road, Quarry Bay, Hong Kong for the purpose of considering, and if thought fit, approving the Share Subdivision and the transactions contemplated thereunder is set out on pages 11 to 12 of this circular.

The resolution put to vote at the EGM will be decided by way of poll. None of the Shareholders will be required to abstain from voting at the EGM.

A form of proxy for the EGM is enclosed with this circular. Whether or not you are able to attend and vote at the EGM in person, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later 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 you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event the instrument appointing the proxy shall be deemed to be revoked.

GENERAL

The Company is an investment holding company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange. The Group is principally engaged in films and television series production, distribution and licensing of film rights, film exhibition and post-production.

RECOMMENDATION

The Directors are of the opinion that the Share Subdivision is in the interests of the Company and the Shareholders as a whole, and accordingly the Board recommends you to vote in favour of the relevant ordinary resolution to be proposed at the EGM.

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LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibilities, 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 enquires, confirm that, to the best of their knowledge and belief, the information contained in this circular 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 circular misleading.

Yours faithfully, On behalf of the Board Pegasus Entertainment Holdings Limited Wong Pak Ming Chairman

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NOTICE OF EGM

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Pegasus Entertainment Holdings Limited 天 馬 影 視 文 化 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1326)

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (the ‘‘EGM’’) of Pegasus Entertainment Holdings Limited (the ‘‘Company’’) will be held at Rooms 1801–02, Westlands Centre, 20 Westlands Road, Quarry Bay, Hong Kong at 11:30 a.m. on Tuesday, 21 July 2015 for the purposes of considering and, if thought fit, passing (with or without amendments) the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited granting the approval for the listing of, and permission to deal in, the Subdivided Shares (as defined below), the Share Subdivision (as defined below) be approved in the following manner:

• (a) each of the existing issued and unissued shares of the Company of HK$0.01 each (the ‘‘Shares’’) in the share capital of the Company be and is hereby subdivided (the ‘‘Share Subdivision’’) into four (4) subdivided shares of HK$0.0025 each (the ‘‘Subdivided Shares’’) and the Share Subdivision shall take effect on the next business day immediately following the day on which this resolution is passed;

• (b) all of the Subdivided Shares will rank pari passu in all respects with each other and have the rights and privileges and be subject to the restrictions in respect of shares contained in the memorandum and articles of association of the Company; and

• (c) any one of the directors or company secretary of the Company be and is hereby authorised to do all such acts, deed and things and to effect all necessary actions as he or she may consider necessary or desirable in order to effect, implement and complete any and all of the matters set out in this resolution.’’

By order of the Board Pegasus Entertainment Holdings Limited Wong Pak Ming Chairman

Hong Kong, 3 July 2015

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NOTICE OF EGM

Registered office: Principal place of business in Hong Kong: Cricket Square Rooms 1801–02 Hutchins Drive Westlands Centre P.O. Box 2681 20 Westlands Road Grand Cayman KY1-1111 Quarry Bay Cayman Islands Hong Kong

Notes:

1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxy to attend and, subject to the provisions of the articles of association of the Company, vote in his stead. A proxy need not be a member of the Company. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

2. In order to be valid, the form of proxy must be deposited together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, at the office of the Company’s branch registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting or adjourned meeting. Completion and return a form of proxy will not preclude a member from attending in person and voting at the above meeting or any adjournment thereof, should you so wish.

3. In the case of joint holders of shares, any one such holders may vote at the meeting, either personally or by proxy, in respect of such shares as if he was solely entitled thereto, but if more than one of such joint holders are present at the meeting personally or by proxy, that one of the said persons so present whose name stands first in the register of members of the Company in respect of such shares shall alone be entitled to vote in respect thereof.

4. The voting on the resolution at the EGM will be conducted by way of a poll.

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