Zall Smart Commerce Group Ltd. — Capital/Financing Update 2022

May 13, 2022

Hong Kong Exchange 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.

Zall Smart Commerce Group Ltd. 卓爾智聯集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2098)

PERFORMANCE GUARANTEE IN RELATION TO THE VERY SUBSTANTIAL ACQUISITION

This announcement is made by Zall Smart Commerce Group Ltd. (the ‘‘Company’’) pursuant to Rule 14A.63 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Reference is made to the announcement of the Company dated 13 November 2016 and the circular of the Company dated 15 February 2017 (the ‘‘Circular’’) in relation to the acquisition of the Target Companies. Unless otherwise stated, defined terms used in this announcement shall bear the same meanings as defined in the Circular.

PERFORMANCE GUARANTEE

Pursuant to the Acquisition Agreement, Vendor D covenants to the Purchaser, among others, that the consolidated revenue and the consolidated net profit after taxation of the Project Group as derived from activities in the ordinary and usual course of business of the Project Group and determined based on the audited consolidated financial statements of the Project Group shall meet the target revenue of RMB73,242,000,000 (the ‘‘Target Revenue 2021’’) and target net profit of RMB228,000,000 (the ‘‘Target Net Profit 2021’’) for the financial year ended 31 December 2021 (collectively, the ‘‘Performance Guarantee 2021’’).

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ACTUAL PERFORMANCE

Based on the financial information of the Project Group for the financial year ended 31 December 2021, the Actual Revenue is approximately RMB45,887,060,000, and the consolidated net loss after taxation of the Project Group (the ‘‘Actual Net Loss’’) is approximately RMB78,012,000. As the Actual Revenue and the Actual Net Loss for the financial year ended 31 December 2021 did not meet the Target Revenue 2021 and the Target Net Profit 2021 respectively, the Performance Guarantee 2021 was not fulfilled. Pursuant to the Acquisition Agreement, no Consideration Shares shall be released for the financial year ended 31 December 2021 as the Performance Guarantee 2021 was not fulfilled and the Achievement Ratio for the respective financial year was below 50% (i.e. 31.33%).

The Board (including the independent non-executive Directors) is of the view that, pursuant to the Acquisition Agreement, (i) the Performance Guarantee provides the Purchaser with a mechanism to adjust the Consideration and the Vendors with a mechanism to allow release of the Consideration Shares from the Lock-up Undertaking; (ii) the Vendors have fulfilled their obligations in accordance with the Acquisition Agreement; and (iii) the Group is not provided with any option to sell any part of the entire equity interest of the Project Group back to any of the Vendors.

At the same time, as disclosed in the Circular, with respect to Vendor D, following the publication of the 2022 annual report of the Company, if there are still Consideration Shares which have not been released to Vendor D in accordance with the Acquisition Agreement, Vendor D must sell all such unreleased Consideration Shares to the public investors at a price and in such manner as requested by the Purchaser after taking into account the market conditions then subsisting (the ‘‘Sale Condition’’), and the proceeds received from the sale of such unreleased Consideration Shares will be remitted to the Purchaser as compensation for the loss suffered by it. Therefore, the Board wishes to highlight that, whilst Vendor D is not put under any obligation for failing to fulfil the Performance Guarantee 2021, such failure may contribute to the triggering of the Sale Condition, as no Consideration Shares shall be released for the financial year ended 31 December 2021 as provided above.

By order of the Board Zall Smart Commerce Group Ltd. Yan Zhi Co-chairman

Hong Kong, 13 May 2022

As at the date of this announcement, the Board comprises nine members, of which Mr. Yan Zhi, Dr. Gang Yu, Mr. Wei Zhe, David, Mr. Qi Zhiping, Mr. Yu Wei and Mr. Xia Lifeng are executive Directors; Mr. Cheung Ka Fai, Mr. Wu Ying and Mr. Zhu Zhengfu are independent non-executive Directors.

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