GLOBAL STRATEGIC GROUP LIMITED

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Global Strategic Group Limited (the Company ), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank manager, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular. This circular appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company. GLOBAL STRATEGIC GROUP LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 8007) (1) SUBSCRIPTION OF NEW SHARES UNDER SPECIFIC MANDATE AND (2) NOTICE OF EXTRAORDINARY GENERAL MEETING A notice convening an extraordinary general meeting (the EGM ) of the Company to be held at Suite 2105, 21st Floor, West Tower, Shun Tak Centre, Connaught Road Central, Hong Kong on Monday, 11 January 2016 at 10:00 a.m. is set out on pages 17 to 19 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, please complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company s branch share registrar in Hong Kong, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so desire. This circular will remain on the GEM website at on the Latest Company Announcements page for at least 7 days from the date of posting and on the website of the Company at 17 December 2015

2 CHARACTERISTICS OF GEM GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM. i

3 CONTENTS Page Characteristics of GEM i Definitions Letter from the Board Notice of EGM Accompanying document Form of proxy ii

4 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions shall have the following meanings: associate(s) has the meaning ascribed to it under the GEM Listing Rules Acquisition the acquisition by Global Billion from Hubei Biaodian 49% of the equity interests in Yichang Zhongyou Board the board of Directors from time to time Business Day a day on which licensed banks in Hong Kong are open for normal banking business throughout their normal business hours (excluding Saturdays, Sundays or public holidays in Hong Kong) Company Global Strategic Group Limited (Stock Code: 8007), a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on GEM Director(s) the director(s) of the Company from time to time EGM an extraordinary general meeting of the Company to be convened and held at Suite 2105, 21st Floor, West Tower, Shun Tak Centre, Connaught Road Central, Hong Kong on Monday, 11 January 2016 at 10:00 a.m. to consider and, if appropriate, to approve, the Subscription Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate Equity Transfer Agreement the equity transfer agreement dated 23 April 2015 (as amended by the supplemental agreement dated 17 September 2015) entered into among Hong Kong Global Billion Access Investments Limited, (transliterated as Hubei Biaodian Natural Gas Co., Ltd.) and Mr. Xiong Songgan in relation to the transfer of 49% of the equity interest in (transliterated as Yichang Zhongyou Natural Gas Utilization Co., Ltd.) at the consideration of HK$100 million 1

5 DEFINITIONS GEM the Growth Enterprise Market of the Stock Exchange GEM Listing Committee has the same meaning as ascribed to it under the GEM Listing Rules GEM Listing Rules the Rules Governing the Listing of Securities on GEM Global Billion Hong Kong Global Billion Access Investments Limited, an indirect wholly-owned subsidiary of the Company Group the Company and all of its subsidiaries from time to time Hong Kong the Hong Kong Special Administrative Region of the PRC Hubei Biaodian (Hubei Biaodian Natural Gas Co., Ltd.*) Independent Third Party(ies) any person(s) or company(ies) and their respective ultimate beneficial owner(s) whom, to the best of the Directors knowledge, information and belief, having made all reasonable enquiries, are third parties independent of the Company and its connected persons of the Company in accordance with the GEM Listing Rules Latest Practicable Date 11 December 2015, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular Mr. Xiong Mr. Xiong Songgan, the ultimate controlling shareholder of Hubei Biaodian Natural Gas Co. Ltd. and Yichang Zhongyou Natural Gas Utilization Co., Ltd. PRC the People s Republic of China which for the purpose of this circular excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan Share(s) ordinary share(s) of HK$0.005 each in the share capital of the Company Shareholder(s) holder(s) of the Share(s) 2

6 DEFINITIONS Specific Mandate the specific mandate to allot, issue or otherwise deal in Shares to be sought from the Shareholders to satisfy the allotment and issue of the Subscription Shares to the Subscriber upon completion of the Subscription Stock Exchange The Stock Exchange of Hong Kong Limited Subscriber Mr. Kan Che Kin, Billy Albert Subscription the subscription by the Subscriber of the Subscription Shares under the Subscription Agreement Subscription Agreement the conditional subscription agreement dated 29 September 2015 (as amended by the supplemental agreement dated 26 November 2015 and the second supplemental agreement dated 9 December 2015) entered into by the Company and the Subscriber in relation to the Subscription Subscription Price HK$0.035 per Subscription Share Subscription Share(s) 1,695,000,000 Shares, representing approximately 29.97% of the enlarged issued share capital of the Company immediately after completion of the Subscription Yichang Zhongyou (Yichang Zhongyou Natural Gas Utilization Co., Ltd.*) Zhijiang Project the natural gas pipeline construction project operated by Yichang Zhongyou to construct natural gas pipelines for the supply of natural gas around the operation rights area in Zhijiang City, Hubei Province, the PRC HK$ Hong Kong dollars, the lawful currency of Hong Kong % per cent. * For identification purpose only 3

7 GLOBAL STRATEGIC GROUP LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 8007) Executive Directors: Mr. Wei Yue Tong (Chairman) Mr. Weng Lin Lei Mr. Fan Wei Guo Mr. Zheng Jian Peng Ms. Leung Tsz Man Non-executive Director: Mr. Zheng Zhu Ping Independent non-executive Directors: Mr. Chiu Wai Piu Ms. Kwan Sin Yee Mr. Leung Oh Man, Martin Mr. Sun Zhi Jun Ms. Huang Yu Jun Registered office: Cricket Square, Hutchins Drive P.O. Box 2681 Grand Cayman KY Cayman Islands Head office and principal place of business in Hong Kong: Suite 2105, 21st Floor West Tower Shun Tak Centre Connaught Road Central Hong Kong 17 December 2015 To the Shareholders Dear Sir or Madam, (1) SUBSCRIPTION OF NEW SHARES UNDER SPECIFIC MANDATE AND (2) NOTICE OF EXTRAORDINARY GENERAL MEETING INTRODUCTION Reference is made to the announcements of the Company dated 29 September 2015, 26 November 2015 and 9 December

8 On 29 September 2015 (after trading hours of the Stock Exchange), the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Subscriber has conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue the Subscription Shares at the Subscription Price of HK$0.035 per Subscription Share. On 26 November 2015 and 9 December 2015, the Company entered into a supplemental agreement and a second supplemental agreement respectively to amend certain terms of the Subscription Agreement. The purpose of this circular is to provide you with the information relating to the Subscription Agreement and the transactions contemplated thereunder, including the grant of Specific Mandate and the notice convening the EGM, at which resolution will be proposed to the Shareholders to consider and, if thought fit, to approve, among other things, the Subscription Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate for the allotment and issue of the Subscription Shares. SUBSCRIPTION OF NEW SHARES UNDER SPECIFIC MANDATE The Subscription Agreement Set out below is a summary of the principal terms of the Subscription Agreement: Date: 29 September 2015 (after trading hours of the Stock Exchange) (as amended by the supplemental agreement dated 26 November 2015 and the second supplemental agreement dated 9 December 2015) Parties: (i) (ii) the Company (as the issuer); and Mr. Kan Che Kin, Billy Albert (as the Subscriber). To the best of the knowledge, information and belief of the Board, having made all reasonable enquiries, the Subscriber is an Independent Third Party. The Subscription Pursuant to the Subscription Agreement, the Subscriber has conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue, the Subscription Shares at the Subscription Price of HK$0.035 per Subscription Share. 5

9 The Subscription Price of the Subscription in the total amount of HK$59,325,000 shall be payable by the Subscriber to the Company in cash upon completion of the Subscription. Conditions precedent of the Subscription Agreement The completion of the Subscription is conditional upon the fulfillment of following conditions: (i) the GEM Listing Committee granting the approval for the listing of, and permission to deal in the Subscription Shares; (ii) completion of the Equity Transfer Agreement; (iii) the passing of the necessary resolution(s) by the Shareholders at the EGM to approve the Subscription Agreement and the transactions contemplated thereunder, including the allotment and issue of the Subscription Shares to the Subscriber pursuant to the Subscription; and (iv) all necessary consents and approvals required to be obtained by the Subscriber and the Company in respect of the Subscription Agreement and the transactions contemplated thereunder having been obtained. In the event that any of the above conditions are not fulfilled on or before 28 February 2016 (or such other time and date as may be agreed by the Company), the Subscription Agreement shall cease and determine and neither the Company nor the Subscriber shall have any obligations and liabilities under the Subscription Agreement, save for any antecedent breaches of the terms thereof. Completion of the Subscription Completion of the Subscription will take place at 4:00 p.m. on the third Business Day (or such other date and time as may be agreed by the Company and the Subscriber) after the conditions precedent of the Subscription Agreement are fulfilled. The Subscription Shares The aggregate nominal value of the Subscription Shares (with a par value of HK$0.005 each) is HK$8,475,000. The Subscription Shares, when issued and fully paid up, shall rank pari passu in all respects among themselves and with all other Shares in issue on the date of allotment and issue of the Subscription Shares. 6

10 The Subscription Price The Subscription Shares will be issued at HK$0.035 per Subscription Share. The Subscription Price for the Subscription Shares represents: (i) a discount of approximately 82.9% to the closing price of HK$0.205 per Share as quoted on the Stock Exchange on the date of the Subscription Agreement; (ii) a discount of approximately 83.5% to the average closing price of HK$ per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately preceding the date of the Subscription Agreement; (iii) a discount of approximately 83.5% to the average closing price of HK$ per Share as quoted on the Stock Exchange for the last 10 consecutive trading days immediately preceding the date of the Subscription Agreement; (iv) a discount of approximately 80.5% to the average closing price of HK$ per Share as quoted on the Stock Exchange for the last 30 consecutive trading days immediately preceding the date of the Subscription Agreement; (v) a premium of approximately 36.2% over the net asset value of approximately HK$ per Share based on the Company s unaudited consolidated net asset value as at 30 June 2015; and (vi) a discount of approximately 80.1% to the closing price of HK$0.176 per Share as quoted on the Stock Exchange on the Latest Practicable Date. The Subscription Price was negotiated on an arm s length basis between the Company and the Subscriber with reference to the unaudited net asset value of the Group of approximately HK$ per Share as at 30 June 2015 and the current stock market conditions. The Subscriber initially sought for a deeper discount to the prevailing market price of the Shares on the Subscription Price given the fact that the financial performance of the Group was not so satisfactory and the Group recorded net losses attributable to owners of the Company for the previous five financial years. 7

11 In regard to determining the Subscription Price, the Company has taken into account the following factors: (i) the existing business of the Group has been in loss-making position for the previous five financial years and it continued to make loss and report negative operating cashflow during the six months ended 30 June 2015; (ii) the downward trend of the Company s recent Share prices in which the Share prices have decreased substantially from HK$0.68 per share since 2 April 2015, being the 6-month period prior to the date of the Subscription Agreement (i.e. 29 September 2015); (iii) the issue price represents a premium of approximately 36.2% over the net asset value approximately HK$ per Share based on the Company s unaudited consolidated net asset value as at 30 June 2015; (iv) the funding requirements of the Group and the Subscription will enhance the financial position of the Group; (v) it is commercially reasonable for the Company to offer the Subscription Price at a deep discount to the prevailing market price of the Shares as an incentive to attract the Subscriber to invest in the Company given the fact that the subscription size is relatively large; (vi) as disclosed in the circular dated 12 June 2015 regarding the Acquisition, the Company has been in negotiation with certain financial institutions in respect of possible placing of new shares or debt financing for the Acquisition. However, as explained in the sub-section headed Reasons for and benefits of the Subscription and use of proceeds below, it was difficult for the Company to obtain sufficient financing; (vii) given that the Subscriber has vast experience in the liquefied natural gas related businesses, by entering into the Subscription Agreement, the Company could line up a strategic relationship with the Subscriber and will be advantages and benefits to the business of Yichang Zhongyou which may result from the prominent background of the Subscriber in the PRC liquefied natural gas related businesses and his extensive business network in the industry and the Subscriber will bring in additional resources and investment opportunities to the Group, which is beneficial to the Company and the Shareholders as a whole; and 8

12 (viii) the Subscriber endorses the Group s business and the natural gas business of the Group upon completion of the Acquisition and is considered as a strategic shareholder and not merely an investor. The Board considers that having a strategic investor that shares the same view with the Directors and the Company s projects to be a distinct advantage from merely identifying an investor for the Company. Having taken into account the overall benefits of the Subscription as set out above, (i) the Directors consider that dilution effect on the shareholding of existing Shareholders as set out in the section headed Effect on Shareholding Structure of the Company of the Circular and the Subscription Price represents a significant discount to the then market price of the Shares are acceptable; and (ii) the Directors are of the opinion that the terms of the Subscription Agreement including Subscription Price is fair and reasonable, on normal commercial terms, and is in the interests of the Company and the Shareholders as a whole. Application for listing The Company will apply to the GEM Listing Committee for the listing of, and permission to deal in, the Subscription Shares. Reasons for and benefit of the Subscription and use of proceeds The Group is principally engaged in the provision of internet & e-commerce enabling solutions, IT consulting & technical services, strategic investments in technologies & applications, investment in life science & health related projects, promotion & trading of cultural products as well as commodities trading. Assuming the Subscription is successfully completed, the gross proceeds of the Subscription will be HK$59,325,000. The net proceeds of the Subscription, after deducting professional fees and other related expenses, are estimated to be approximately HK$58,825,000 and the net issue price of per Subscription Share will be approximately HK$ The Company intends to apply the net proceeds arising from the Subscription in the following manner: (i) HK$37,600,000 will be used for settlement of part of the consideration for the Acquisition; and (ii) the remaining balance of HK$21,225,000 as general working capital of the Group. 9

13 As disclosed in (i) the announcements of the Company dated 24 April 2015, 17 September 2015 and 9 December 2015; and (ii) the circular of the Company dated 12 June 2015 (the Acquisition Circular ), Global Billion, an indirect wholly-owned subsidiary of the Company, entered into a Equity Transfer Agreement with Hubei Biaodian and Mr. Xiong Songgan pursuant to which Global Billion shall acquire from Hubei Biaodian 49% of the equity interest in Yichang Zhongyou at the consideration of HK$100 million. Yichang Zhongyou is principally engaged in the investments and construction of natural gas pipelines of the Zhijiang Project. The business scope of Yichang Zhongyou will include the provision of the natural gas after Yichang Zhongyou has obtained the Fuel Gas Operation License. Yichang Zhongyou has completed the construction of the first phase of the Zhijiang Project and approximately 80% of the examination and acceptance procedures for such construction project. The parties to the Equity Transfer Agreement have also submitted the relevant documents for the registration of the transfer to the Ministry of Commerce of the People s Republic of China and are awaiting for the approval from the Ministry of Commerce. As at the Latest Practicable Date, Yichang Zhongyou has yet to commence gas supply and generate revenue. Upon completion of the Acquisition, Yichang Zhongyou will become a non-wholly owned subsidiary of the Company. As disclosed in the Acquisition Circular, in addition to the existing management team of Yichang Zhongyou, the Group intends to nominate Mr. Wei Yue Tong, the chairman of the Board and an executive Director and Mr. Fan Wei Guo, an executive Director (both of which have extensive investment and management experience in various business sectors in the PRC) as two additional directors of Yichang Zhongyou upon completion of the Acquisition, to strengthen the management team of Yichang Zhongyou. In addition, the Board is in the process of identifying suitable candidates to assist the Directors in managing the development of the natural gas business. Given that the Subscriber has vast experience in the liquefied natural gas related businesses, it is expected that there will be advantages and benefits to business of the Yichang Zhongyou and the Group which may result from the prominent background of the Subscriber in the PRC liquefied natural gas related businesses and his extensive business network in the industry. The Company intends to utilise the part of the proceeds in the amount of HK$62,400,000 from the previous placing exercise of the Company as at out in the announcement of the Company dated 16 January 2015, to settle part of the consideration for the Acquisition and approximately HK$15,000,000 had been utilised up to the Latest Practicable Date. The Company intends to utilise HK$37,600,000 of the proceeds from the Subscription to settle the balance of such consideration. 10

14 Based on the current business plans of the Group and Yichang Zhongyou, the proceeds from the Subscription can satisfy the Group s expected funding needs (including any possible capital injections/capital commitments in relation to the Group s interests in Yichang Zhongyou) for the next 12 months. For more details of the Acquisition, please refer to the abovementioned announcements of the Company and the Acquisition Circular. The Group has been in loss-making position for an extended period of time and it continued to make loss and report negative operating cashflow as disclosed in the interim report of the Company for the six months ended 30 June 2015 (the Interim Report ). As at 30 June 2015, the Group s cash and bank balances were approximately HK$90,802,000 as disclosed in the Interim Report, of which HK$62,400,000 was set aside for the settlement of the consideration of the Acquisition as set out in the announcement of the Company dated 16 January Given the unsatisfactory performance of the Group s existing IT business and the initial stage of the commodities trading business, the Group faces tight liquidity issues and, in addition to the capital requirement for the Acquisition and the existing cash reserve/funding required for the working capital of its existing business, the Directors consider that additional funding is required for general working capital and approximately HK$21,225,000 or 36% of the net proceeds will be applied for the settlement of the Group s operating expenditures for the next twelve months ending October The Directors believe that the Subscription could strengthen the Company s cash resources and working capital position for the development of the Group s existing business and the investment in natural gas business. The Subscription Agreement does not contain provision for the right of the Subscriber to nominate Director and the Company has no current intention to change the composition of the Board members. The Board has considered other alternative fund raising methods such as debt financing, rights issue or open offer. The Directors considered that debt financing may incur interest burden on the Group and may be subject to lengthy due diligence and negotiations with the banks with reference to the Group s financial position and the then financial market condition. Given the unsatisfactory financial performance of the Company, the Board considers debt financing to be relatively uncertain and time-consuming. On the other hand, rights issue or open offer may also involve relatively substantial time and cost to complete as compared to the equity financing through the issue of new Shares. In the course of this fund raising exercise, the Company had approached 11

15 three securities firms for other fund raising opportunities. However, none of them showed interest in providing underwriting services nor any fund raising exercises of the Company given the recent market volatility and poor market conditions. In view of the continuous loss-making position of the Group, the Directors consider that it may not be possible to procure underwriter(s) for pre-emptive issues on acceptable terms under the prevailing market conditions. The Directors are of the view that the Subscription Agreement (including the Subscription Price) has been entered into on normal commercial terms, is fair and reasonable and is in the interests of the Company and the Shareholders as a whole. As the Directors are confident about the prevailing and future business development of the Group, the Directors believe that the Subscription will allow the Company to raise the much needed funds at a reasonable cost for support the Group s existing operations and further development of its existing and potential business and investment opportunities. Background of the Subscriber Mr. Kan Che Kin, Billy Albert, is an executive director, the chairman and the chief executive officer of China LNG Group Limited ( China LNG ), a company listed on the Main Board of the Stock Exchange (Stock Code: 931) and its group companies are principally engaged in development of liquefied natural gas related businesses, trading of securities and properties investment. He graduated from the University of East Anglia with a Bachelor of Science degree. He is an associate member of the Institute of Chartered Accountants in England and Wales, and a member of the Hong Kong Institute of Certified Public Accountants. He was also admitted as a fellow of the Hong Kong Securities and Investment Institute in November He had worked with Deloitte Touche Tohmatsu and KPMG and is equipped with extensive experience in accounting, taxation and corporate finance. In addition, he has over 30 years of experience in serving on the board of directors of private companies, financial institutions and listed companies in Hong Kong, including Security Pacific Credit Hong Kong Limited (a subsidiary of Security Pacific National Bank, taken over by Bank of America then by China Construction Bank), Burlingame International Company Limited (now known as EverChina Int l Holdings Company Limited (formerly known as Interchina Holdings Company Limited)) (Stock Code: 202) and Fullshare International Holdings Limited (formerly known as Warderly International Holdings Limited) (Stock Code: 607). He resigned as a director of Security Pacific Credit Hong Kong Limited in 1986, EverChina Int l Holdings Company Limited in September 2000 and Fullshare Holdings Limited in December He is also a director of several wholly-owned subsidiaries of China LNG. The Subscriber has confirmed that there is no relationship between Hubei Biaodian (and its associates) and the Subscriber (and his associates). 12

16 The Subscriber was introduced to Mr. Weng Lin Lei, an executive Director, by a business acquaintance, Mr. Xiong in May 2015 and subsequently met at a social gathering in June Equity fund raising activities in the past twelve-month period Set out below are the fund raising activity conducted by the Company in the past 12 months immediately prior to the Latest Practicable Date: Date of announcement Event Net proceeds (approximately) Intended use of net proceeds Actual use of net proceeds as at the Latest Practicable Date 16 January 2015 Placing of 360,000,000 Shares at HK$0.354 per Share under general mandate HK$124.8 million (i) 50% of the net proceeds to fund the acquisition of certain equity interests in Yichang Zhongyou or establishment of a new entity in the PRC by the Company and Yichang Zhougyou or other PRC entities nominated by Yichang Zhougyou; (ii) 30% for the Group s commodity trading business; and (iii) the remaining amount as general working capital of the Group (i) approximately HK$37,400,000 and HK$25,000,000 was used as the working capital for the commodity trading business and for the Group s general working capital respectively (ii) approximately HK$15,000,000 was used as part of the initial payment for the consideration of the Acquisition 28 October 2014 and 7 November 2014 Placing of 30,000,000 ordinary shares of HK$1.5 each in the capital of the Company (prior to the subdivision of share of the Company of par value of HK$0.1 into 20 shares of the Company of par value of HK$0.005) under general mandate HK$44 million (i) HK$28,000,000 for the new commodities trading business of the Company for payment to suppliers of the commodities; and (ii) HK$16,000,000 as general working capital of the Group approximately HK$26,000,000 and HK$18,000,000 was used as the working capital for the new commodity trading business and other general working capital of the Group respectively Save as disclosed above, the Company has not conducted any other equity fund raising activities in the past 12 months immediately prior to the Latest Practicable Date. 13

17 Effect on shareholding structure of the Company As at the Latest Practicable Date, the Company has 3,960,000,000 Shares in issue. The shareholding structure of the Company as at the Latest Practicable Date and immediately after completion of the Subscriptions (assuming that there are no other changes to the shareholding structure of the Company from the Latest Practicable Date up to the date of completion of the Subscription) are as follows: Name of Shareholders Immediately after completion of the Subscription (assuming that there are no other changes to the shareholding structure of the Company from the Latest As at the Latest Practicable Date Practicable Date up to the date of completion of the Subscription) No. of Shares Approx. % No. of Shares Approx. % Global Strategic (Holding) Group Limited (Note 1) 2,160,429, ,160,429, Mr. Wei Yue Tong (Note 2) 135,000, ,000, Subscriber 1,695,000, Public Shareholders 1,664,570, ,664,570, Total 3,960,000, % 5,655,000, % Notes: 1. As at the Latest Practicable Date, Global Strategic (Holding) Group Limited is wholly-owned by Global Strategic Fund Holdings Limited, which in turn is owned as to 49% of its issued share capital by Hotex Holdings Limited and as to 51% of its issued share capital by Liang Tan Yi Xing International Foundation Company Limited. Hotex Holdings Limited is wholly-owned by Mr. Weng Lin Lei, an executive Director. Liang Tan Yi Xing International Foundation Company Limited is owned by Mr. Wei Yue Tong, the Chairman of the Board and an executive Director, as to 90% of its issued share capital and by Mr. Zheng Zhu Ping, a non-executive Director, as to 10% of its issued share capital. 2. Mr. Wei Yue Tong is the chairman of the Board and an executive Director. IMPLICATIONS UNDER THE GEM LISTING RULES The Subscription Shares will be allotted and issued pursuant to the Specific Mandate to be sought from the Shareholders at the EGM in accordance with the requirements under the GEM Listing Rules. 14

18 EGM The EGM will be held at Suite 2105, 21st Floor, West Tower, Shun Tak Centre, Connaught Road Central, Hong Kong on Monday, 11 January 2016 at 10:00 a.m. for the Shareholders to consider and, if thought fit, to approve, among other things, the Subscription Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate for the allotment and issue of the Subscription Shares. To the best of the Directors knowledge, information and belief having made all reasonable enquiries, no Shareholder or Director has a material interest in the Subscription, therefore no Shareholder is required to abstain from voting on the relevant resolution to be proposed at the EGM. A notice convening the EGM is set out on pages 17 to 19 of this circular. Whether or not you are able to attend the EGM, please complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company s branch share registrar in Hong Kong, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong as soon as possible but in any event not later than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish. The resolution proposed to be approved at the EGM will be taken by poll and an announcement will be made by the Company after the EGM on the results of the EGM. RECOMMENDATION The Board considers that the terms of the Subscription Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the relevant resolution to be proposed at the EGM for approving, among other things, the Subscription Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate. 15

19 RESPONSIBILITY STATEMENT This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading. Yours faithfully For and on behalf of the Board of Global Strategic Group Limited Wei Yue Tong Chairman 16

20 NOTICE OF EGM GLOBAL STRATEGIC GROUP LIMITED (Incorporated in the Cayman Islands with limited liability) (Stock Code: 8007) NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the Meeting ) of Global Strategic Group Limited (the Company ) will be held at Suite 2105, 21st Floor, West Tower, Shun Tak Centre, Connaught Road Central, Hong Kong on Monday, 11 January 2016 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolution of the Company as an ordinary resolution of the Company: ORDINARY RESOLUTION THAT (i) (ii) the subscription agreement dated 29 September 2015 (as amended by the supplemental agreement dated 26 November 2015 and the second supplemental agreement dated 9 December 2015) (the Subscription Agreement ) entered into between the Company as issuer and Mr. Kan Che Kin, Billy Albert as subscriber (the Subscriber ) in relation to the proposed subscription (the Subscription ) by the Subscriber of 1,695,000,000 new shares of HK$0.005 each in the share capital of the Company (each a Subscription Share, collectively, the Subscription Shares ) at the price of HK$0.035 per Subscription Share (a copy of which has been produced to the meeting marked A and signed by the chairman of the meeting for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved, ratified and confirmed; conditional upon the fulfillment or, as relevant, waiver of the conditions precedent set out in the Subscription Agreement, the allotment and issue of the Subscription Shares to the Subscriber pursuant to the Subscription Agreement (the Specific Mandate ) be and is hereby approved and the Specific Mandate is in addition to, and shall not prejudice nor revoke any existing general mandate granted to the Directors by the shareholders of the Company or such other general or specific mandate(s) which may from time to time be granted to the Directors prior to or after the passing of this resolution; and 17

21 NOTICE OF EGM (iii) any one Director be and is hereby authorised for and on behalf of the Company to sign, seal, execute, perfect, deliver and do all such documents, deeds, acts, matters and things as he may in his/her absolute discretion consider necessary or desirable or expedient for the purpose of or in connection with the Subscription Agreement and the transactions contemplated thereunder and to make and agree to such variations of a non-material nature in or to the terms of the Subscription Agreement and the transactions contemplated thereunder as he/she may in his/her absolute discretion consider desirable or necessary. By order of the Board Global Strategic Group Limited Wei Yue Tong Chairman Hong Kong, 17 December 2015 Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY Cayman Islands Head office and principal place of business in Hong Kong: Suite 2105, 21st Floor West Tower Shun Tak Centre Connaught Road Central Hong Kong Notes: 1. Any shareholder of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote instead of him/her/it. A proxy need not be a shareholder of the Company. A shareholder who is the holder of two or more shares of the Company may appoint more than one proxy to represent him/her/it to attend and vote on his/her/its behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed. 2. A proxy form for use at the Meeting is enclosed. Whether or not you intend to attend the Meeting in person, you are encouraged to complete and return the enclosed proxy form in accordance with the instructions printed thereon. 3. In order to be valid, a form of proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority, must be deposited at the Company s branch share registrar in Hong Kong, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong not less than 48 hours before the time appointed for the holding of the Meeting or any adjournment thereof. Delivery of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the Meeting or any adjournment thereof and, in such event, the instrument appointing a proxy shall be deemed to be revoked. 18

22 NOTICE OF EGM 4. In the case of joint registered holders of shares of the Company, any one of such persons may vote at the Meeting, either personally or by proxy, in respect of such shares of the Company as if he was solely entitled thereto, but if more than one of such joint holders are present at the Meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such shares of the Company shall alone be entitled to vote in respect thereof. 5. Pursuant to the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited, the voting on the ordinary resolution at the Meeting will be conducted by way of poll. 19