Wanka Online Inc. — Capital/Financing Update 2021

Feb 21, 2021

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

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

Neither this announcement nor any copy thereof may be released into or distributed directly or indirectly in the United States or any other jurisdiction where such release or distribution might be unlawful.

This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities mentioned herein have not been, and will not be, registered under United States Securities Act of 1933, as amended from time to time (the “ U.S. Securities Act ”) or securities law of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or transferred within in the United States unless registered under the U.S. Securities Act or pursuant to an exemption from, or in a transaction not subject to, registration under the U.S. Securities Act. The Company has no intention to register under the U.S. Securities Act any of the securities referred to herein or to conduct a public offering of securities in the United States.

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**WANKA ONLINE INC. 萬咖壹聯有限公司 ***

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1762)

PLACING OF NEW SHARES UNDER GENERAL MANDATE

Placing Agents

• For identification purposes only

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The Board is pleased to announce that on February 20, 2021, the Company entered into the Placing Agreement with the Placing Agents, pursuant to which the Company agreed to issue, under the General Mandate, and the Placing Agents agreed, severally (not jointly nor jointly and severally), as agents of the Company, to procure the Placees on a best efforts basis to subscribe for a total of 135,000,000 Placing Shares at the Placing Price of HK$1.45 per Placing Share subject to the terms and conditions of the Placing Agreement.

The number of Placing Shares represents approximately 10.23% of the existing issued share capital of the Company as at the date of this announcement and approximately 9.28% of the enlarged issued share capital of the Company immediately following the completion of the Placing (assuming all the Placing Shares are subscribed for in full and there is no change in the issued share capital of the Company between the date of this announcement and the completion of the Placing, other than the issue by the Company of the Placing Shares).

The Placing Price of HK$1.45 per Placing Share represents (i) a discount of approximately 18.08% to the closing price of HK$1.77 per Share as quoted on the Stock Exchange on February 19, 2021 being the last trading day immediately prior to the date of the Placing Agreement; and (ii) a premium of approximately 0.42% to the average closing price of HK$1.44 per Share as quoted on the Stock Exchange for the five consecutive trading days immediately prior to the last trading day before the date of the Placing Agreement.

The Placing Shares are to be issued under the General Mandate. As such, the allotment and issue of the Placing Shares is not subject to additional Shareholders’ approval.

Assuming all the 135,000,000 Placing Shares are subscribed for in full, upon completion of the Placing, the gross proceeds to be raised from the Placing will be approximately HK$195.75 million and the net proceeds (after deducting all applicable costs and expenses, including commission and levies) arising from the Placing are estimated to be approximately HK$188.79 million. On this basis, the net price per Placing Share will be approximately HK$1.40.

Application will be made to the Stock Exchange for the approval for the listing of, and permission to deal in, the Placing Shares.

As completion of the Placing is subject to the satisfaction or, if applicable, waiver of the Conditions Precedent, the Placing may or may not proceed. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

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THE PLACING AGREEMENT

The Board is pleased to announce that on February 20, 2021, the Company and the Placing Agents entered into the Placing Agreement, pursuant to which the Company agreed to issue, under the General Mandate, and the Placing Agents agreed, severally (not jointly nor jointly and severally), as agents of the Company, to procure the Placees on a best efforts basis to subscribe for a total of 135,000,000 Placing Shares at the Placing Price of HK$1.45 per Placing Share subject to the terms and conditions of the Placing Agreement. The principal terms of the Placing Agreement are set out below.

Date

February 20, 2021

Parties

Issuer: The Company Placing Agents: (1) CICC; and (2) ICBCI

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Placing Agents is not a connected person of the Company.

The Placing

The Company conditionally agreed to appoint the Placing Agents, and the Placing Agents, on a several (not joint nor joint and several) basis, conditionally agreed to act as agents for the Company during the Placing Period, and to procure the Placees on a best efforts basis to subscribe for an aggregate of 135,000,000 Shares at a price of HK$1.45 per Share.

The Placing Shares

The number of Placing Shares represents approximately 10.23% of the existing issued share capital of the Company as at the date of this announcement and approximately 9.28% of the enlarged issued share capital of the Company immediately following the completion of the Placing (assuming all the Placing Shares are subscribed for in full and there is no change in the issued share capital of the Company between the date of this announcement and the completion of the Placing, other than the issue by the Company of the Placing Shares). The aggregate nominal value of the Placing Shares is US$27.00.

The Placing Shares shall, when fully paid, rank pari passu in all respects with the other Shares in issue or to be issued by the Company on or prior to the date of completion of the Placing including the rights to all dividends and other distributions declared, made or paid on or after the date of allotment.

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The Placing Agents

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Placing Agents and their respective ultimate beneficial owner(s) are independent third parties of the Company and its connected persons.

The Placees

The Placing Agents will place the Placing Shares to investors that are independent third parties of the Company and its connected persons. It is expected that the Placing Shares will be placed to not less than six Placees who shall be professional, institutional, or other investors that are, together with their respective ultimate beneficial owners, independent third parties of the Company and its connected persons. It is not expected that any Placee will become a substantial shareholder (as defined under the Listing Rules) of the Company.

Placing Price

The Placing Price of HK$1.45 per Placing Share represents:

• (i) a discount of approximately 18.08% to the closing price of HK$1.77 per Share as quoted on the Stock Exchange on February 19, 2021, being the last trading day immediately prior to the date of the Placing Agreement; and

• (ii) a premium of approximately 0.42% to the average closing price of HK$1.44 per Share as quoted on the Stock Exchange for the five consecutive trading days of the Shares immediately prior to the last trading day before the date of the Placing Agreement.

The Placing Price was determined on arm’s length basis among the Company and the Placing Agents and with reference to the prevailing market price of the Shares, the recent trading volume of the Shares and the prospects of the Group. The Board (including the independent non-executive Directors) considers that the Placing Price and the terms of the Placing Agreement are fair and reasonable and that the Placing is in the interests of the Company and the Shareholders as a whole.

Rights of Placing Shares

The Placing Shares will, on allotment and issue, rank pari passu in all respects with other existing Shares upon issuance free from all liens, charges and encumbrances, and together with all rights attaching to them as at the date of issue of the Placing Shares, including the right to receive all dividends declared, made or paid on the record date of which falls on or after the date of issue of the Placing Shares.

Conditions Precedent

Completion of the Placing shall be subject to the satisfaction or, if applicable, waiver of the Conditions Precedent which include, among other things:

• (i) the Listing Committee granting the listing of and permission to deal in the Placing Shares and such listing and permission not subsequently being revoked prior to the delivery of definitive share certificate(s) representing the Placing Shares pursuant to the Placing Agreement;

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• (ii) the representations, warranties and undertakings made by the Company pursuant to the Placing Agreement being true, accurate and complete in all material respects and not misleading as of the date of the Placing Agreement and the Closing Date;

• (iii) the Company having complied with all of the agreements and undertakings and satisfied all of the conditions on its part to be complied with or satisfied under the Placing Agreement on or before the Closing Date;

• (iv) the Placing Agents having received on the Closing Date an opinion from the Cayman Islands counsel to the Company, in form and substance reasonably satisfactory to the Placing Agents; and

• (v) the Placing Agents having received on the Closing Date an opinion of the U.S. counsel to the Placing Agents, to the effect that the offer and sale of the Placing Shares by the Placing Agents as set forth in the Placing Agreement are not required to be registered under the U.S. Securities Act, and such other matters as the Placing Agents shall reasonably request, in form and substance reasonably satisfactory to the Placing Agents.

If the Conditions Precedent are not satisfied (or waived, as the case may be) at or before 8:00 a.m. (Hong Kong time) on March 5, 2021 or such other date as the Company and the Placing Agents may agree in writing, the Placing Agents and the Company shall have no obligations or liabilities to each other under the Placing, and neither the Company nor the Placing Agents shall have any claim against the other for costs, damages, compensation or otherwise arising under the Placing Agreement, save for antecedent breaches.

Completion of the Placing

Completion of the Placing shall take place on the Business Day after the date on which the Conditions Precedent are fulfilled (or waived, as the case may be (in respect of conditions (ii) to (v) above only)) but in any event no later than March 5, 2021, or such other time and/or date as the Company and the Placing Agents may agree in writing.

Termination

Notwithstanding anything contained in the Placing Agreement, if at any time prior to 8:00 a.m. (Hong Kong time) on the Closing Date:

• (1) there develops, occurs or comes into force:

• (i) any new law or regulation or any change (whether or not permanent) or development (whether or not permanent) involving a prospective change in existing laws or regulations or the interpretation or application thereof by any court or other competent authority after the date of the Placing Agreement, which in the sole opinion of the Placing Agents is or is likely to be materially adverse to the success of the Placing, or makes or is likely to make it impracticable or inadvisable or inexpedient to proceed therewith;

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• (ii) any event, or series of events beyond the control of the Placing Agents (including, without limitation, any calamity, act of government, strike, labour dispute, lock-out, aircraft collision, severe transportation disruption, fire, explosion, flooding, earthquake, civil commotion, economic sanctions, epidemic, pandemic, outbreak of infectious disease, outbreak or escalation of hostilities, act of terrorism and act of God) in or affecting the Relevant Jurisdictions, or the declaration by any of the Relevant Jurisdictions of war or a state of emergency or calamity or crisis;

• (iii) any change or development in local, national or international financial, political, economic, legal, military, industrial, fiscal, regulatory, currency or market conditions (including, without limitation, conditions in the stock and bond markets, money and foreign exchange markets, interbank markets and credit markets) which in the sole opinion of the Placing Agents is or is likely to be materially adverse to the success of the Placing, or makes or is likely to make it impracticable or inadvisable or inexpedient to proceed therewith;

• (iv) any change or development in local, national or international securities market conditions or currency exchange rates or exchange controls which in the sole opinion of the Placing Agents is or is likely to be materially adverse to the success of the Placing, or makes or is likely to make it impracticable or inadvisable or inexpedient to proceed therewith;

• (v) any suspension or limitation of dealings in the Shares during the Placing Period whatsoever (other than as a result of the Placing);

• (vi) any moratorium, suspension, restriction or limitation on trading in shares or securities generally on the Stock Exchange, the New York Stock Exchange, the NASDAQ Global Market, NYSE Amex Equities, the Shanghai Stock Exchange, the London Stock Exchange, the Singapore Stock Exchange, the Tokyo Stock Exchange or the Shenzhen Stock Exchange due to exceptional financial circumstances or otherwise at any time prior to the Closing Date; or

• (vii) the commencement by any state, governmental, judicial, regulatory or political body or organisation of any action against any Director or an announcement by any state, governmental, judicial, regulatory or political body or organisation that it intends to take any such action; or

• (2) (i) any breach of any of the representations, warranties and undertakings by the Company set out in the Placing Agreement (or, in the case of any such representations, warranties and undertakings which are not qualified by materiality, any breach of any of such representations, warranties and undertakings in any material respect) comes to the knowledge of the Placing Agents; (ii) any event occurs or any matter arises on or after the date hereof and prior to the completion of the Placing on the Closing Date which if it had occurred or arisen before the date hereof would have rendered any of the representations, warranties and undertakings set out in the Placing Agreement untrue or incorrect; or (iii) there has been a breach of, or failure to perform, any other provision of the Placing Agreement in any material respect on the part of the Company; or

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• (3) there is any change, or any development involving a prospective change, in or affecting the business, general affairs, management, prospects, assets and liabilities, shareholders’ equity, results of operations or position, financial or otherwise, of the Group (other than those already disclosed to the public on or before the date of the Placing Agreement) as a whole which in the sole opinion of the Placing Agents is or is likely to be materially adverse to the success of the Placing, or makes or is likely to make it impracticable or inadvisable or inexpedient to proceed therewith;

then and in any such case, the Placing Agents may terminate the Placing Agreement without liability to the Company by giving notice in writing to the Company, which notice may be given at any time prior to 8:00 a.m. (Hong Kong time) on the Closing Date.

In the event that the Placing Agents terminate the Placing Agreement pursuant to the Placing Agreement, all obligations of the Company or the Placing Agents under the Placing Agreement shall cease and determine and no party shall have any claim against any other party of the Placing Agreement in respect of any matter arising out of or in connection with the Placing Agreement (save for any antecedent breaches and certain other liabilities as set out in the Placing Agreement).

Lock-up arrangements of the Company

Pursuant to the Placing Agreement, the Company has undertaken to the Placing Agents that for a period from the date of the Placing Agreement up to 90 days after the Closing Date, save for (i) the allotment and issue of the Placing Shares in accordance with provisions of the Placing Agreement, and (ii) the grant of share options or restricted share units under the existing share incentive schemes adopted by the Company on or prior to the date of the Placing Agreement or any issue of shares pursuant to the exercise of any options or restricted share units granted or to be granted under such schemes, neither the Company nor any person acting on its behalf will, without first having obtained the written consent of the Placing Agents:

• (i) sell, transfer, dispose, allot or issue or offer to sell, transfer, dispose, allot or issue or grant any option, right or warrant to subscribe for (either conditionally or unconditionally, or directly or indirectly, or otherwise) any Shares or any interests in Shares or any securities convertible into or exercisable or exchangeable for or substantially similar to any Shares or interest in Shares (whether by actual disposition or effective economic disposition or swap due to or otherwise by way of cash settlement or otherwise);

• (ii) agree (conditionally or unconditionally) to enter into or effect any such transaction with similar economic effect as any of the transactions described in (i) above; or

• (iii) announce any intention to enter into or effect any such transaction described in (i) or (ii) above.

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GENERAL MANDATE

The Placing Shares will be allotted and issued under the General Mandate.

As at the date of this announcement, the number of new Shares that can be issued by the Company under the General Mandate is 264,003,670 Shares. Up to the date of this announcement, no Share has been issued by the Company pursuant to the General Mandate. The allotment and issue of the Placing Shares will utilize approximately 51.14% of the General Mandate. As such, the allotment and issue of the Placing Shares is not subject to the additional approval of the Shareholders.

APPLICATION FOR LISTING

Application will be made to the Stock Exchange for the approval for the listing of, and permission to deal in, the Placing Shares.

INFORMATION OF THE GROUP AND REASONS FOR THE PLACING AND USE OF PROCEEDS

The Group is a fast-growing technology company in the mobile Internet market, helping connect businesses from various industries to hundreds of millions of Android-based smartphone users in China.

The Directors consider that the Placing represents an opportunity to raise capital for the Company while broadening its Shareholder base. The Directors are of the view that the Placing would strengthen the financial position of the Group and provide working capital to the Group.

Assuming all the 135,000,000 Placing Shares are subscribed for in full, upon completion of the Placing, the gross proceeds to be raised from the Placing will be approximately HK$195.75 million and the net proceeds (after deducting all applicable costs and expenses, including commission and levies) arising from the Placing are estimated to be approximately HK$188.79 million. On this basis, the net price per Placing Share will be approximately HK$1.40.

The net proceeds from the Placing will be utilized in the following manner:

• (a) approximately 60% of the net proceeds will be used to further develop the Group’s existing business lines, including but not limited to, expanding the Group’s mobile advertising services network and enriching service offerings and user-focused content;

• (b) approximately 30% of the net proceeds will be used to enhance the Group’s digital infrastructure and for research and development of new internet and technological solutions for our marketers; and

• (c) approximately 10% of the net proceeds will be used as general working capital.

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EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY

The shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately following the completion of the Placing (assuming all the Placing Shares are subscribed for in full and there is no change in the issued share capital of the Company between the date of this announcement and the completion of the Placing, other than the issue by the Company of the Placing Shares) are set out below.

Name of Shareholder Wanka Media Limited and/ or Mr. GAO Dinan(1) Countryside Tech Inc. and/ or Mr. ZHENG Wei(2) Ms. ZHOU Yan(3) Mr. NIE Xin(4) Korea Investment Partners Co., Ltd. and/or Korea Investment Holdings Co., Ltd. The Placees Other Shareholders Total	As at the date of this announcement Number of Shares held Approximate percentage of total Shares in issue 488,248,800 36.99% 488,248,800 36.99% 5,000,000 0.38% 1,587,000 0.12% 105,391,430 7.98% – – 719,791,120 54.53% 1,320,018,350 100.00%	Immediately following the completion of the Placing Number of Shares held Approximate percentage of total Shares in issue(5) 488,248,800 33.56% 488,248,800 33.56% 5,000,000 0.34% 1,587,000 0.11% 105,391,430 7.24% 135,000,000 9.28% 719,791,120 49.47% 1,455,018,350 100.00%	Immediately following the completion of the Placing Number of Shares held Approximate percentage of total Shares in issue(5) 488,248,800 33.56% 488,248,800 33.56% 5,000,000 0.34% 1,587,000 0.11% 105,391,430 7.24% 135,000,000 9.28% 719,791,120 49.47% 1,455,018,350 100.00%
			100.00%

Notes:

• (1) Mr. GAO Dinan is deemed to be interested in the entire interests as of the date of this announcement held by (i) Wanka Media Limited, a company wholly owned by him and holds 269,384,300 Shares; and (ii) Mr. ZHENG Wei and his wholly-owned company, being Countryside Tech Inc., as they are parties acting in concert.

• (2) Mr. ZHENG Wei is deemed to be interested in the entire interests as of the date of this announcement (i) Countryside Tech Inc., a company wholly owned by him and holds 218,864,500 Shares; and (ii) Mr. GAO Dinan and his wholly-owned company, being Wanka Media Limited, as they are parties acting in concert.

• (3) Ms. ZHOU Yan is an executive Director and is interested in restricted share units granted to her under the 2016 Share Incentive Scheme entitling her to receive 5,000,000 Shares.

• (4) Mr. NIE Xin is an executive Director and is interested in restricted share units granted to him under the 2016 Share Incentive Scheme entitling him to receive 1,587,000 Shares.

• (5) The percentage of total Shares in issue may not add up to 100% due to rounding.

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FUND RAISING ACTIVITIES OF THE COMPANY DURING THE PAST 12 MONTHS

The Company has not conducted any equity fund raising activities in the past 12 months from the date of this announcement.

As completion of the Placing is subject to the satisfaction or, if applicable, waiver of the Conditions Precedent, the Placing may or may not proceed. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

DEFINITIONS

In this announcement, unless otherwise defined, the following terms used herein have the following meanings:

“2016 Share Incentive	the share incentive scheme adopted by the Company on 6 January 2016
Scheme”	which was amended, restated and replaced in its entirety by a restricted
	share unit scheme on 24 May 2018, the principal terms of which are set
	out in the 2018 annual report of the Company
“Board”	the board of Directors
“Business Day”	any day (excluding a Saturday, Sunday and public holidays in Hong
	Kong, the PRC and the Cayman Islands) on which licensed banks are
	generally open for business in Hong Kong, the PRC and the Cayman
	Islands and the Stock Exchange is generally open for trading of
	securities in Hong Kong
“CICC”	China International Capital Corporation Hong Kong Securities Limited
“Closing Date”	the Business Day after the date on which the Conditions Precedent are
	fulfilled (or waived, as the case may be) but in any event no later than
	March 5, 2021, or such other date as the Company and the Placing
	Agents may agree in writing
“Company”	Wanka Online Inc. (萬咖壹聯有限公司*), an exempted company with
	limited liability incorporated under the laws of the Cayman Islands
	on November 7, 2014 and the Shares of which are listed on the Main
	Board of the Stock Exchange (stock code: 1762)
“Conditions Precedent”	the conditions precedent to the completion of the Placing
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Directors”	the directors of the Company
“General Mandate”	the mandate granted to the Directors by the Shareholders at the
	annual general meeting of the Company held on June 5, 2020 to allot,
	issue and deal with up to 20% of the then issued share capital of the
	Company

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“Group”	the Company, its subsidiaries and the Consolidated Affiliated Entities
	(as defined in the 2019 annual report of the Company published on the
	website of the Stock Exchange on April 23, 2020)
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic
	of China
“ICBCI”	ICBC International Securities Limited
“Listing Committee”	the Listing Committee of the Stock Exchange
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange
	of Hong Kong Limited
“Placee(s)”	any professional, institutional and other investor whom the Placing
	Agents have procured to subscribe for any of the Placing Shares
	pursuant to the Placing Agreement
“Placing”	the placing of 135,000,000 Placing Shares to the Placees at the Placing
	Price pursuant to the terms and conditions of the Placing Agreement
“Placing Agents”	collectively, CICC and ICBCI
“Placing Agreement”	the placing agreement entered into among the Company and the Placing
	Agents dated February 20, 2021 in relation to the Placing
“Placing Period”	the period commencing upon the execution of the Placing Agreement
	and terminating at 8:00 a.m. (Hong Kong time) on the Closing Date (or
	such later time and date as the Company and the Placing Agents may
	agree in writing)
“Placing Price”	HK$1.45 per Placing Share
“Placing Shares”	135,000,000 new Shares to be issued by the Company under the
	General Mandate and to be placed pursuant to the Placing Agreement
“PRC”	the People’s Republic of China which, for the purpose of this
	announcement, excludes the Hong Kong Special Administrative Region
	of the PRC, the Macau Special Administrative Region of the PRC and
	Taiwan
“Relevant Jurisdictions”	Hong Kong, the People’s Republic of China, the Cayman Islands, the
	United Kingdom, the European Union (or any member thereof) or the
	United States
“RMB”	Renminbi, the lawful currency of the PRC

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“Share(s)” ordinary share(s) in the share capital of the Company with a par value of US$0.0000002

“Shareholder(s)” “Stock Exchange”

holder(s) of the Share(s)

The Stock Exchange of Hong Kong Limited

“United States”

the United States of America

“US$” United States dollars, the lawful currency of the United States

“%” per cent

By order of the Board Wanka Online Inc. GAO Dinan Chairman

Hong Kong, February 21, 2021

As at the date of this announcement, the board of directors of the Company comprises Mr. GAO Dinan, Ms. ZHOU Yan and Mr. NIE Xin as executive Directors; Mr. ZHENG Wei and Mr. SONG Chunyu as non-executive Directors; and Mr. CHEN Baoguo, Mr. LIANG Zhanping and Ms. ZHAO Xuemei as independent non-executive Directors.

• For identification purposes only

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