CHINA WOOD INT (01822) Rights Issue Receives Valid Acceptances of Approximately 58.80%, Net Proceeds of Approximately HK$74 Million

CHINA WOOD INT (01822) announced that as at 4:00 p.m. on Friday, 28 August 2026 (being the latest time for acceptance), a total of 19 valid acceptances had been received, involving a total of 580 million rights shares, representing approximately 58.80% of the total number of rights shares offered under the rights issue (the offer shares). Accordingly, the shortfall in subscriptions under the rights issue was 407 million rights shares, representing approximately 41.20% of the total number of offer shares, and such shares are subject to the compensatory arrangements. Pursuant to Rule 7.21(1)(b) of the Listing Rules, the Company has made compensatory arrangements by entering into a placing agreement with the placing agent, pursuant to which the Company has appointed the placing agent, and the placing agent has agreed to act as the placing agent of the Company to use its best endeavours to place the unsubscribed rights shares and the unsold rights shares of non-qualifying shareholders to independent placees during the placing period. As at 4:00 p.m. on Tuesday, 8 September 2026 (being the latest time for the placing agent to place the placing shares), 407 million unsubscribed rights shares were successfully placed at a price of HK$0.077 per share, equal to the subscription price, to not fewer than six (6) placees. Accordingly, there are no net proceeds available for distribution to non-acting shareholders. All conditions relating to the rights issue and the placing as set out in the rights issue prospectus have been fulfilled, and the rights issue and the placing became unconditional at 4:00 p.m. on Wednesday, 9 September 2026. Based on the results of the rights issue acceptances and the results of the placing, the rights shares to be allotted and issued will be 987 million rights shares, representing 100% of the total number of rights shares available for subscription under the rights issue. The gross proceeds from the rights issue are approximately HK$76 million, and the net proceeds from the rights issue (after deducting relevant expenses) are approximately HK$74 million. As disclosed in the rights issue prospectus, the Company intends to apply the net proceeds from the rights issue as follows: (i) It is intended that approximately HK$34 million (representing approximately 46.0% of the net proceeds) will be used during the 12-month period after completion of the rights issue for the research and development of the Group's food and beverage products as follows: (i) approximately HK$16.5 million for the purchase of research and development equipment and platforms to develop proprietary rights and technologies relating to food and beverage products in the fields of the above-mentioned high-throughput fermentation, the relevance of microbiota and health foods, gene testing-based personalised nutrition solutions, and gene-edited microbial production of food ingredients; (ii) approximately HK$13 million for costs relating to continuous testing and development of food and beverages; and (iii) approximately HK$4.5 million for the costs of management and technical personnel with extensive knowledge and experience in the food and beverage industry in Hong Kong and/or CHINA; (ii) It is intended that approximately HK$8 million (representing approximately 10.8% of the net proceeds) will be used during the 12-month period after completion of the rights issue for marketing and promotional activities to support the Group's expansion of its food and beverage business as follows: (i) approximately HK$5.2 million for the costs of the sales and marketing team and key opinion leaders to promote the food and beverage products developed by the Group; and (ii) approximately HK$2.8 million for the costs of marketing materials, trade shows and exhibitions to promote the Group's food and beverage products; (iii) approximately HK$6 million (representing approximately 8.1% of the net proceeds) is intended to be used for marketing and promotional activities to support the Group's wood-related business, including the costs of marketing materials, trade shows and exhibitions; and (iv) approximately HK$26 million (representing approximately 35.1% of the net proceeds) is intended to be used as working capital of the Group, including but not limited to the Group's operating costs, staff costs, rental expenses, professional fees and other office expenses. The HK$26 million allocated for general working capital purposes is intended to be used for: (a) inventories, accounts receivable, prepayments and deposits; (b) the Group's daily operating expenses, which for the year ended 31 December 2025 mainly included employee benefit expenses of approximately HK$7.012 million, expenses relating to short-term leases of general offices of approximately HK$1.776 million, utilities and general expenses of approximately HK$0.95 million and auditors' remuneration of approximately HK$1.18 million; and (c) as a buffer for any shortfall in the proceeds from the rights issue and as a general reserve.