The company has announced a significant capital raising initiative. On May 5, 2026, it plans to issue approximately 271 million subscription shares to Zhuangyan Investment International Limited, representing about 58.81% of the enlarged issued share capital. The subscription price is HK$0.365 per share, which represents a discount of approximately 34.82% compared to the closing price of HK$0.560 per share on the last trading day on the Stock Exchange.

The net proceeds from the subscription are expected to be around HK$98.7 million. Furthermore, on June 8, 2026, the company entered into a placement agreement with a placing agent to place 58.205 million placement shares at HK$0.365 per share, aiming to raise net proceeds of approximately HK$21 million.

The combined net proceeds from these two transactions, totaling about HK$119.7 million, are intended to be used for debt repayment and general working capital purposes. The company is currently facing financial difficulties and urgently requires a substantial capital injection to address claims from creditors and suppliers.

A key reason for conducting the placement concurrently with the subscription is that the company secures a firm commitment from the subscriber for the full subscription amount. This provides total proceeds of about HK$99 million to resolve a significant portion of its financial distress and supply more working capital for its business operations, thereby making the smaller placement more attractive to other investors.

The board proposes to seek shareholder approval at an extraordinary general meeting via an ordinary resolution to increase the authorized share capital. The proposal is to add an extra 1.8 billion new shares with a par value of HK$0.1 each, raising the authorized capital from HK$20 million (divided into 200 million shares of HK$0.1 each) to HK$200 million (divided into 2 billion shares of HK$0.1 each). These new shares will rank equally in all respects with the existing shares.

Following the completion of the subscription and the placement, the offeror (the subscriber), its ultimate beneficial owner, and any persons acting in concert with them will hold an interest in approximately 271 million shares, representing about 58.81% of the enlarged issued share capital, assuming no other changes to the issued share capital between the date of this joint announcement and the completion date.

Consequently, under Rule 26.1 of the Takeovers Code, the offeror is required to make an unconditional mandatory cash offer for all the issued shares not already owned or agreed to be acquired by the offeror and its concert parties. The offer price is HK$0.365 in cash per share, representing a discount of approximately 34.82% to the closing price of HK$0.56 per share on the last trading day on the Stock Exchange.

The offeror's intention is for the group to continue operating its existing principal business after the offer closes and to maintain the company's listing status on the Stock Exchange. The company has applied to the Stock Exchange for the resumption of trading of its shares, effective from 9:00 a.m. on June 9, 2026.