Virtual Mind Holding Company Limited — M&A Activity 2021

Dec 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 the contents of this announcement.

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

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CEFC Hong Kong Financial Investment Company Limited 香港華信金融投資有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1520)

INSIDE INFORMATION MEMORANDUM OF UNDERSTANDING IN RESPECT OF A POSSIBLE TRANSACTION

This announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Listing Rules and the Inside Information Provisions under Part XIVA of the SFO.

MEMORANDUM OF UNDERSTANDING

The Board is pleased to announce that after trading hours on 22 December 2021, the Company, as the proposed purchaser, entered into a non-legally binding MOU with the Vendor in relation to the Possible Transaction. If the Possible Transaction materialises, it may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

The Company wishes to emphasise that the Possible Transaction is subject to, among other things, the signing of the Formal Agreement, the terms and conditions of which are yet to be agreed. Shareholders and potential investors of the Company should note that the Possible Transaction may or may not materialise and the final structure and terms of the Possible Transaction, which are still subject to further negotiations between the parties, have yet to be finalised and may deviate from those set out in the MOU. The Company will comply with the relevant disclosure and shareholders’ approval requirements under the Listing Rules where appropriate. Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company.

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This announcement is made by CEFC Hong Kong Financial Investment Company Limited (the “ Company ”, together with its subsidiaries, the “ Group ”) pursuant to Rule 13.09(2)(a) of the Rules Governing the Listing of Securities (the “ Listing Rules ”) on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the “ SFO ”).

MEMORANDUM OF UNDERSTANDING

The board (the “ Board ”) of directors (the “ Directors ”) of the Company is pleased to announce that after trading hours on 22 December 2021, the Company entered into a non-legally binding memorandum of understanding (the “ MOU ”) with Zeng Ge (the “ Vendor ”) pursuant to which the Company intends to acquire and the Vendor intends to sell the 100% equity interests in Chengdu Dreamtoys Cultural Creativity Company Limited (成都創夢潮玩文化創意有限公司) (the “ Target Company ”) (the “ Possible Transaction* ”).

The non-legally binding MOU contains, inter alia, the following major terms:

Date: 22 December 2021

Parties: (a) the Company, being the proposed purchaser

(b) Zeng Ge, being the Vendor

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, the Vendor is a third party independent of the Company and its connected persons (as defined in the Listing Rules). None of the Directors of the Company has any interest, directly or indirectly, in the Possible Transaction. In the event that the Possible Transaction proceeds, the Company will comply with the relevant requirements of the Listing Rules as and when appropriate.

Assets to be acquired

Pursuant to the MOU, the Company intends to acquire and the Vendor intends to sell the 100% equity interests in the Target Company (the “ Target Equity Interests ”). The Target Company and its subsidiaries (collectively the “ Target Group ”) are principally engaged in the research and development, operation and promotion of trendy cultural products. The Target Group injects the spirit of integration and innovation into product design and development with a global perspective, and combines blockchain technology, near-field sensing technology, digital interaction and other new digital modules to create a meta-universe IP ecosystem that communicates with digital content.

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Consideration

The consideration for the Target Equity Interests (the “ Consideration ”) shall be determined after arm’s length negotiation and set out in a formal definitive agreement to be entered into between the Vendor and the Company (the “ Formal Agreement ”). The Consideration is intended to be settled by way of (a) cash; or (b) issuance of new shares of the Company (the “ Consideration Shares ”, each a “ Share ”); or (c) a combination of cash and issuance of Consideration Shares.

The issue price of the Consideration Shares, if applicable, is intended to be not less than HK$0.197 per Share, which is the closing price of the shares of the Company as at the date of the MOU. For the avoidance of doubt, the detailed terms of the Possible Transaction, including but not limited to the exact settlement timing, method and amount of the Consideration will be negotiated and finalised by the parties to the MOU in the Formal Agreement.

Conditions precedent

Completion of the Formal Agreement will be conditional upon the fulfilment (or waiver, as applicable) of certain conditions precedent, including, among others:

• (i) completion of the due diligence review of the financial, legal, business, operation and other matters of the Target Group to the satisfaction of the Company;

• (ii) an independent valuer having issued a valuation report of the Target Group that is reasonably accepted by and is in the form and substance to the satisfaction of the Company;

• (iii) (where required) the passing by the shareholders or independent shareholders (as appropriate) of the Company in general meeting of all resolutions required under relevant laws and regulations, including but not limited to the Listing Rules and the applicable laws of the transactions contemplated under the Formal Agreement, including without limitation the specific mandate for the allotment and issue of the Consideration Shares;

• (iv) the granting of the approval for the listing of, and permission to deal in, the Consideration Shares by the Listing Committee of the Stock Exchange;

• (v) the Company having received a PRC legal opinion in relation to the due incorporation, shareholdings and business scope of the Target Group in the form and substance to the reasonable satisfaction of the Company;

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• (vi) all license, permit, consent, authorisation, permission, clearance, warrant, confirmation, certificate or approval of any competent governmental, administrative, supervisory, regulatory, judicial, determinative, disciplinary, enforcement body or tax bureau, authority, agency, board, department, court or tribunal of any jurisdiction (including any relevant securities exchange) and whether supranational, national, regional or local or any other person which are required for the Possible Transaction having been obtained or made, if any; and

• (vii) any other conditions to be agreed by the Vendor and the Company to be included in the Formal Agreement.

Effectiveness and termination

Under the MOU, save for certain general provisions such as provisions on exclusivity, confidentiality, costs, termination, governing law which are legally binding, other terms of the MOU are not legally binding.

The MOU shall become effective on the date of the MOU and shall terminate and be of no force and effect on the earlier of (i) agreement in writing by both parties to terminate the negotiation and discussions relating to the Possible Transaction; and (ii) failure by the parties to finalise the Formal Agreement by the end of the Exclusivity Period (as defined below).

The MOU shall have no further effect upon termination and each party shall not claim against the other for any damages, costs or expenses as a result of such termination, save and except for the provisions which are legally binding as mentioned above which shall remain in full force and effect.

Exclusivity

The Vendor has undertaken to the Company not to enter into discussions, negotiations, agreement (verbal or written) or understanding with any other party in relation to the Possible Transaction during the period of six (6) months from the date of the MOU (both days inclusive) (the “ Exclusivity Period ”), provided that the parties may by mutual written agreement extend the Exclusivity Period.

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REASONS FOR THE POSSIBLE TRANSACTION

The Group is principally engaged in design, manufacturing and trading of apparels as well as provision of money lending services.

The Target Company is a company incorporated in the People’s Republic of China (the “ PRC ”) with limited liability. The Target Group is principally engaged in the research and development, operation and promotion of trendy cultural products. The Target Group injects the spirit of integration and innovation into product design and development with a global perspective, and combines blockchain technology, near-field sensing technology, digital interaction and other new digital modules to create a meta-universe IP ecosystem that communicates with digital content.

The Directors consider that the Possible Transaction, if materialises, represents a good opportunity for the Group to diversify its business. The Directors are of the view that the entering into of the MOU and proceeding with the Possible Transaction are in the interests of the Company and its shareholders as a whole.

GENERAL

If the Possible Transaction materialises, it may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. Further announcement(s) will be made as and when necessary in accordance with the Listing Rules.

The Company wishes to emphasise that the Possible Transaction is subject to, among other things, the signing of the Formal Agreement, the terms and conditions of which are yet to be agreed. Shareholders and potential investors of the Company should note that the Possible Transaction may or may not materialise and the final structure and terms of the Possible Transaction, which are still subject to further negotiations between the parties, have yet to be finalised and may deviate from those set out in the MOU. The Company will comply with the relevant disclosure and shareholders’ approval requirements under the Listing Rules where appropriate. Shareholders and potential investors of the Company should exercise caution when dealing in the securities of the Company.

By order of the Board

CEFC Hong Kong Financial Investment Company Limited Tin Yat Yu Carol

Chairman and Executive Director

Hong Kong, 22 December 2021

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As at the date of this announcement, the executive Directors of the Company are Ms. Tin Yat Yu Carol, Mr. Cheung Ka Lung, Mr. Chan Ming Leung Terence and Mr. Gong Xiaohan; and the independent non-executive Directors of the Company are Mr. Tang Shu Pui Simon, Mr. Hon Ming Sang and Ms. Lo Wing Sze JP.

* English name for identification purpose only.

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