Mindtell Technology Limited (Stock Code: 8611) announced a proposed connected transaction involving the subscription of convertible bonds under a general mandate. According to the announcement dated 24 October 2025, the company entered into a CB Subscription Agreement with an executive director, who conditionally agreed to subscribe for convertible bonds with a principal amount of HK$28.6 million.

Based on an initial conversion price of HK$0.55 per share, the convertible bonds would convert into 52 million shares, representing approximately 11.11% of the existing issued share capital or around 10.00% of the enlarged share capital. The transaction is deemed a connected transaction because the subscriber is an executive director and thus a connected person under the GEM Listing Rules. Consequently, the agreement is subject to reporting, announcement, and independent shareholders’ approval at an upcoming extraordinary general meeting (EGM).

The company intends to apply the net proceeds of HK$28.6 million primarily as follows: approximately 60% for technology upgrades and investment in new hardware, 20% for talent and operation expansion, and 20% for working capital and contingencies. Following completion, the general mandate for new share issuance would still allow for 41.6 million additional shares to be issued.

The company highlighted that the convertible bonds bear no interest, would not carry voting rights, and have a maturity period of 24 months from the issue date. The full conversion is also subject to compliance with shareholding and public float requirements, and any exercise of the conversion rights must not trigger a mandatory general offer under the Takeovers Code. The announcement further states that an independent board committee will be established to review the transaction, and an independent financial adviser will be appointed to advise the committee and the independent shareholders.

Shareholders and potential investors are advised to exercise caution when dealing in the company’s securities, as the transaction remains contingent upon meeting the conditions outlined in the CB Subscription Agreement and receiving the necessary approvals. The circular for the EGM, including further details of the proposed subscription, is expected to be dispatched on or before 14 November 2025.