Cogobuy : CONNECTED TRANSACTION - PROVISION OF FINANCIAL ASSISTANCE

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COGOBUY GROUP

科 通 芯 城 集 團

(a company incorporated under the laws of the Cayman Islands with limited liability)

(Stock Code: 400)

CONNECTED TRANSACTION

PROVISION OF FINANCIAL ASSISTANCE

PROVISION OF FINANCIAL ASSISTANCE

On 16 April 2021, the Lender, an indirect wholly owned subsidiary of the Company, entered into the Loan Agreement with the Borrower, pursuant to which the Lender agreed to provide the Borrower with a Loan Facility of up to RMB90,000,000.

The Lender also entered into loan agreements in an aggregate amount of RMB27,600,000 with other Employees on the same date and on similar terms.

IMPLICATIONS UNDER THE LISTING RULES

The Borrower is a director of Comtech Industrial (Shenzhen), an indirect non-wholly owned subsidiary of the Company, and a director of other indirect subsidiaries of the Company. Therefore, the Borrower is a connected person at the subsidiary level of the Company under Chapter 14A of the Listing Rules. Accordingly, the transaction under the Loan Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules exceed 1% but are less than 5%, the transaction under the Loan Agreement is subject to the reporting and announcement requirements but exempt from the circular, independent financial advice and shareholders' approval requirements under Rule 14A.76 of the Listing Rules.

Four of the other Employees are directors of other indirect subsidiaries of the Company only and they are therefore connected persons at the subsidiary level. The applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules for the loan agreements with the other Employees are less than 1%. The loan agreements entered into with the other Employees therefore constitute de minimus transactions under Rule 14A.76 of the Listing Rules and are not subject to reporting, announcement and shareholders' approval under Chapter 14A of the Listing Rules.

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PROVISION OF FINANCIAL ASSISTANCE

On 16 April 2021, the Lender, an indirect wholly owned subsidiary of the Company, entered into the Loan Agreement with the Borrower, pursuant to which the Lender agreed to provide the Borrower with a Loan Facility of up to RMB90,000,000.

The Lender also entered into loan agreements in an aggregate amount of RMB27,600,000 with other Employees on the same date and on similar terms.

PRINCIPAL TERMS OF THE LOAN AGREEMENT

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1. If the Borrower uses any sum borrowed under the Loan Agreement for a purpose other than that provided for in the Loan Agreement, he shall pay interest on such sum from and including the date on which the such sum was misused up to and including the date on which such sum was repaid at an interest rate of 200% of the base interest rate.

INFORMATION OF THE PARTIES INVOLVED

The Company

The Company is a technology services company serving the global IC chips industry and AIoT ecosystem in the PRC. The Group's two primary businesses focus on (i) the sales and promotion of IC chips to AIoT enterprises in China and (ii) the research and development and sales of proprietary products, the development of customized technical solutions, as well as providing financing services and seeking investment or acquisition and merger opportunities in high-qualitystart-ups within the Group's AIoT ecosystem.

The Lender

The Lender is principally engaged in software development, the development of electronic communication products and the provision of related technical consulting and services.

The Borrower

The Borrower is the executive partner of the Shenzhen INGDAN Partnership, holding 76.53% of the partnership interests. Through Shenzhen INGDAN Partnership, he indirectly owns equity interest in Comtech Industrial (Shenzhen). The Borrower is also a director of Comtech Industrial (Shenzhen) and other indirect subsidiaries of the Company.

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REASONS FOR AND BENEFITS OF ENTERING INTO THE LOAN AGREEMENT

The sums borrowed under the Loan Agreement will be applied by the Borrower to pay for the Target Equity Interest acquired by Shenzhen INGDAN Partnership which is ultimately controlled by the Borrower, following which the Borrower indirectly holds 4.29% of Comtech Industrial (Shenzhen). The Borrower is a director of Comtech Industrial (Shenzhen). The Group expects that the demand for chips from customers in the PRC will increase greatly as a result of the widespread adoption and rapid development of 5G. As the Group's chip sales are conducted primarily through Comtech Industrial (Shenzhen), a non-wholly owned subsidiary of the Company, the Company believes that allowing key employees to acquire an equity interest in Comtech Industrial (Shenzhen) is appropriate to incentivize key employees as it aligns employee interests with that of the Company, with a goal to retain and motivate critical employees to work towards the long-term goal, expansion and development of Comtech Industrial (Shenzhen). Extending the Loan Facility for the purpose of assisting the Borrower to acquire an equity interest in Comtech Industrial (Shenzhen) is therefore in the interest of the Group.

The interest rate under the Loan Agreement has been determined by reference to the prevailing market interest rates as well as the financial background and repayment ability of the Borrower. The Loan Agreement is expected to generate a stable interest income for the Lender, which will indirectly benefit the Company.

IMPLICATIONS UNDER THE LISTING RULES

The Borrower is a director of Comtech Industrial (Shenzhen), an indirect non-wholly owned subsidiary of the Company, and a director of other indirect subsidiaries of the Company. Therefore, the Borrower is a connected person at the subsidiary level of the Company under Chapter 14A of the Listing Rules. Accordingly, the transaction under the Loan Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules exceed 1% but are less than 5%, the transaction under the Loan Agreement is subject to the reporting and announcement requirements but exempt from the circular, independent financial advice and shareholders' approval requirements under Rule 14A.76 of the Listing Rules.

Four of the other Employees are directors of other indirect subsidiaries of the Company only and they are therefore connected persons at the subsidiary level. The applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules for the loan agreements with the other Employees are less than 1%. The loan agreements entered into with the other Employees therefore constitute de minimus transactions under Rule 14A.76 of the Listing Rules and are not subject to reporting, announcement and shareholders' approval under Chapter 14A of the Listing Rules.

None of the Directors has any material interest in the Loan Agreement, and no Directors are required to abstain from voting on the relevant board resolutions.

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The Directors (including the independent non-executive Directors) consider that the terms of the Loan Agreement (including the granting of the Loan Facility) were arrived at after arm's length negotiation between the Lender and Borrower in the ordinary and usual course of business of the Company; and have been entered into on normal commercial terms and the terms thereof are fair and reasonable and are in the interests of the Company and its shareholders as a whole.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the meanings set out below:

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By order of the Board

Cogobuy Group

KANG Jingwei, Jeffrey

Chairman, Executive Director

and Chief Executive Officer

Hong Kong, 16 April 2021

As at the date of this announcement, the executive Directors are Mr. KANG Jingwei, Jeffrey and Mr. WU Lun Cheung Allen; the non-executive Director is Ms. NI Hong, Hope; and the independent non-executive Directors are Mr. YE Xin, Dr. MA, Qiyuan and Mr. HAO Chunyi, Charlie.

• For identification purposes only

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