Hong Kong Exchanges 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. This announcement is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company. COOLPAD GROUP LIMITED 酷派集團有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 2369) DISCLOSEABLE TRANSACTION ACQUISITION OF 75% INTEREST IN TARGET COMPANY AND ISSUE OF CONSIDERATION SHARES UNDER GENERAL MANDATE THE SALE AND PURCHASE AGREEMENT The Board is pleased to announce that on 11 September 2020 (after trading hours), the Company entered into the Sale and Purchase Agreement with the Seller, pursuant to which the Seller has conditionally agreed to sell, and the Company has conditionally agreed to purchase, the Target Shares (which represent 75% of the total number of issued shares of the Target Company) for the Consideration of HK$103,000,000, which shall be satisfied at Completion by the payment of HK$25,000,000 in cash and the allotment and issue of 600,000,000 Consideration Shares, credited as fully paid at the Issue Price of HK$0.130 per Consideration Share in accordance with the terms and conditions of the Sale and Purchase Agreement. As at the date of this announcement, the Target Company is directly wholly-owned by the Seller. Upon Completion, the Target Company will be owned as to 75% and 25% by the Company and the Seller, respectively. GENERAL MANDATE TO ISSUE THE CONSIDERATION SHARES The Consideration Shares will be issued and allotted under the General Mandate. The General Mandate entitles the Directors to issue, allot and deal with up to 1,166,681,496 Shares, representing 20% of the issued share capital of the Company as at the date of the AGM. Since the date of the AGM and up to and including the date of this announcement, no Shares have been allotted and issued under the General Mandate. Accordingly, the General Mandate is sufficient for the allotment and issue of the Consideration Shares and the allotment and issue of the Consideration Shares is not subject to approval of the Shareholders. Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares. 1 LISTING RULES IMPLICATION As one or more of the applicable percentage ratios calculated in accordance with the Listing Rules in respect of the Acquisition are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is subject to the announcement requirement under the Listing Rules. Completion of the Acquisition is subject to fulfilment or waiver of the Conditions Precedent under the Sale and Purchase Agreement. As the Acquisition may or may not proceed, Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company. INTRODUCTION The Board is pleased to announce that on 11 September 2020 (after trading hours), the Company entered into the Sale and Purchase Agreement with the Seller, pursuant to which the Seller has conditionally agreed to sell, and the Company has conditionally agreed to purchase, the Target Shares, which represent 75% of the total number of issued shares of the Target Company. The Target Company indirectly owns 95.3846% equity interest in the Project Company. THE SALE AND PURCHASE AGREEMENT The principal terms of the Sale and Purchase Agreement are as follows: Date 11 September 2020 (after trading hours) Parties Purchaser: the Company Seller: the Seller To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Seller is a third party independent of the Company and its connected persons. Subject matter Pursuant to the Sale and Purchase Agreement, Seller has conditionally agreed to sell, and the Company has conditionally agreed to purchase, the Target Shares. The Target Shares represent 75% of the total number of issued shares of the Target Company as at the date of this announcement. Consideration The total price for the Target Shares to be paid by the Company to the Seller is HK$103,000,000, which shall be satisfied by (i) HK$25,000,000 in cash at Completion; and (ii) HK$78,000,000 by allotment and issue by the Company to the Seller (or a company wholly-owned by the Seller) of 600,000,000 Consideration Shares, credited as fully paid, at the Issue Price of HK$0.130 per Consideration Share in accordance with the terms and conditions of the Sale and Purchase Agreement at Completion. 2 The Consideration Shares, when issued and fully paid, will rank pari passu in all respects among themselves and with all other Shares in issue at the time of allotment and issue of the Consideration Shares. Pursuant to the Sale and Purchase Agreement, the Seller shall not, without the prior consent of the Company, sell, transfer, pledge or otherwise dispose of (i) any Consideration Shares or any beneficial or other interest therein for a period of 12 months after the date of Completion; and (ii) more than an aggregate of 120,000,000 Consideration Shares or any beneficial or other interest therein after the day falling on the first anniversary of Completion until and up to the day falling on the third anniversary of Completion. Basis of the Consideration The Consideration was determined after arm’s length negotiations between the Seller and the Company with reference to (i) the valuation of 100% equity interests of the Project Company in the amount of RMB128,850,000 (equivalent to approximately HK$145,987,050) as at 15 July 2020 by adopting market approach as prepared by an independent professional valuer; (ii) the net asset value of the Target Group as at 30 June 2020; and (iii) the business performance and prospects of the Target Group. Consideration Shares and Issue Price The Consideration Shares represent approximately (i) 9.94% of the total issued Shares of the Company as at the date of this announcement; and (ii) 9.05% of the total issued Shares of the Company as enlarged by the allotment and issue of the Consideration Shares (assuming that there are no other changes to the share capital of the Company). The Issue Price of the Consideration Shares represents: (i) a discount of approximately 8.45% to the closing price of HK$0.142 per Share as quoted on the Stock Exchange on the date of the Sale and Purchase Agreement; and (ii) a discount of approximately 16.77% to the average closing price of HK$0.156 per Share as quoted on the Stock Exchange for the five consecutive trading days of the Shares immediately prior to the date of the Sale and Purchase Agreement. The Issue Price was determined after arm’s length negotiations between the Company and the Seller with reference to the current market price of the Shares. The Directors consider that the Consideration and the Issue Price of the Consideration Shares are fair and reasonable and on normal commercial terms. Conditions precedent Completion is conditional upon the fulfilment or waiver (as the case may be) of the following conditions: (a) the completion of due diligence in respect of the Target Group by the Company to the satisfaction of the Company; 3 (b) the passing of resolution(s) by the Board approving the Sale and Purchase Agreement, the transactions contemplated thereunder; (c) the listing of, and permission to deal in, the Consideration Shares having been granted by the Stock Exchange (subject only to allotment and to other usual conditions); (d) the entering into of (i) service contract(s) between the Project Company and each of the key employees of the Project Company and (ii) the Deed of Undertaking; (e) the representations and warranties remaining true, accurate and not misleading at Completion as if repeated at Completion and at all times between the date of the Sale and Purchase Agreement and Completion; (f) the Seller having fully complied with the pre-completion obligations specified in the Sale and Purchase Agreement and otherwise having performed all of the covenants and agreements required to be performed by it under the Sale and Purchase Agreement; (g) there having been no material adverse change since the date of the Sale and Purchase Agreement; (h) there having been no breach of the obligations by the Seller under the Sale and Purchase Agreement; and (i) no statute, regulation or decision which would reasonably be expected to prohibit, restrict or materially delay the execution, delivery or performance of the Sale and Purchase Agreement, the consummation of the Acquisition or the operation of the members of the Target Group after Completion having been proposed, enacted or taken by any governmental or official authority whether in the BVI, Hong Kong, the PRC or elsewhere. The Company may in its absolute discretion waive either in whole or in part at any time in writing any of the Conditions Precedent, save for condition (c) above. In the event that any of the Conditions Precedent set out above shall not have been fulfilled (or waived, as the case may be) prior to the Long Stop Date, then the parties shall not be bound to proceed with the Acquisition and the Sale and Purchase Agreement shall cease to be of any effect save for any clause expressed to survive the lapse of the Sale and Purchase Agreement and save in respect of claims arising out of any antecedent breach of the Sale and Purchase Agreement.