Imperium Global : DISCLOSEABLE TRANSACTION - ACQUISITION OF XQF TEAM

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Imperium Group Global Holdings Limited

帝 國 集 團 環 球 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 0776)

DISCLOSEABLE TRANSACTION

ACQUISITION OF XQF TEAM

On 22 July 2020 (after trading hours of the Stock Exchange), the Purchaser has entered into the Interests Transfer Agreement with the Vendor, pursuant to which the Vendor has agreed to sell, and the Purchaser has agreed to purchase, the interests of XQF Team, together with, among others, the eligibility to participate in the 2020 PEL S2 and the contracts with XQF Team.

Pursuant to the Interests Transfer Agreement, XQF Team shall be transferred from the Vendor to the Purchaser and the Purchaser shall be entitled to the rights and benefits of XQF Team. The Consideration shall be RMB16,000,000 (inclusive of tax) payable by the Purchaser.

INFORMATION OF THE PURCHASER, THE VENDOR AND XQF TEAM

The Purchaser is a company incorporated in the PRC and is a non-wholly owned subsidiary of the Company. The principal business of the Purchaser is investment holding. The Purchaser is an indirect wholly-owned subsidiary of Nova.

Nova is a company incorporated in the British Virgin Islands and a non-wholly owned subsidiary of the Company. Nova is owned as to 70% by the Company and 30% by Ms. Wang Chunyang. The principal business of Nova is esports.

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The Group starts to participate in the Esports Contests organised by PEL under the name of Nova Esports Club* (Nova 電子競技俱樂部) upon the completion of the Transfer. The first Esports Contest is the 2020 Peacekeeper Elite League Seasons 2 (和平精英職業聯

賽 2020第二賽季) ("2020 PEL S2"), and Nova Esports Club* has been selected as one of the Qualifying Participants by PEL. The team who will participate in the 2020 PEL S2 would be namely as NVXQF Team (subject to the approval by PEL).

INFORMATION ON PEL AND THE 2020 PEL S2

PEL is the official esports contest organizer for professional contestants of the Peacekeeper Elite, which is managed by Tencent. Peacekeeper Elite (和平精英), being a national-level tactical competitive mobile game, is the main Esports Contest for the qualifying participants to compete. Peacekeeper Elite was firstly released in 2019 and soon become one of the most popular mobile games in the PRC. It is expected that PEL will further increase the resources committed for the 2020 PEL S2 so that the scale of 2020 PEL S2 is expected be larger than previous seasons.

XQF Team ranked the first and third in the Esports Contests of Peacekeeper Elite (和平精 英) held in 2019 and first half of 2020, respectively. Given the recognised track record of XQF Team, the Group is of the view that it is lucrative for the Group to participate in the Esports Contests organised by PEL and/or other parties, including but not limited to the 2020 PEL S2 through the acquisition of the interests of XQF Team.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the Interests Transfer Agreement are more than 5% but less than 25%, such transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

On 22 July 2020 (after trading hours of the Stock Exchange), the Purchaser has entered into the Interests Transfer Agreement with the Vendor, pursuant to which the Vendor has agreed to sell, and the Purchaser has agreed to purchase, the interests of XQF Team, together with, among others, the eligibility to participate in the 2020 PEL S2 and the contracts with XQF Team. Set out below are the details of the Interests Transfer Agreement.

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THE INTERESTS TRANSFER AGREEMENT

Date:	22 July 2020 (after trading hours of the Stock Exchange)
Parties:	(1)	Wanhui (Suzhou) Digital Technology Co., Ltd.*, as purchaser; and
	(2)	Xiamen Qingshoutang Cultural Media Limited *, as vendor

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Vendor is owned as to 95% by Zhou Wei Yuan (周偉元) and 5% by Chen Guo Hai (陳國海), respectively, and the Vendor, XQF Team, their ultimate beneficial owners and/or their connected persons are third parties independent of and not connected with the Company and its connected persons.

Subject matter

Pursuant to the Interests Transfer Agreement, XQF Team shall be transferred from the Vendor to the Purchaser and the Purchaser shall be entitled to the rights and benefits of XQF Team including but not limited to:

1. the ownership of XQF Team;
2. the eligibility of XQF Team to participate in the Esports Contests and their relevant interests since 24 July 2020;
3. all commercial sponsorship rights of XQF Team and its team members after the entering into the Interests Transfer Agreement;
4. the contract signing rights for the team members of XQF Team;
5. the exclusive manager cooperation right of the team members of XQF Team;
6. the ownership of the intellectual property rights produced by XQF Team and its team members as a result of live streaming and third-party cooperation after the entering into the Interests Transfer Agreement; and
7. all other rights and interests of XQF Team and its team members originally enjoyed by the Vendor, including but not limited to the global training service contract entered into between the Vendor and PEL.

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Consideration

The Consideration shall be RMB16,000,000 (inclusive of tax) payable by the Purchaser, which shall be satisfied in the following manner:

1. RMB4,800,000 shall be paid by the Purchaser to the Vendor within two business days of the execution of the Interests Transfer Agreement (the "First Payment"). The Vendor shall provide the Purchaser a list of contracts entered into by XQF Team and relevant partners and samples of contracts (the "Relevant Documents") within two days of receiving such payment;
2. RMB6,400,000 shall be paid by the Purchaser to the Vendor within three business days of the Vendor terminating the existing contracts with XQF Team (the relevant agreement shall be copied to the Purchaser) and prompting the Purchaser to enter into contestant contracts, employee contracts, manager contracts and/or esports contest participation contracts with XQF Team members (the "Second Payment"); and
3. the balance of RMB4,800,000 shall be paid by the Purchaser to the Vendor within three business days after the Purchaser (i) having completed the relevant filing with Tencent; and (ii) having completed the administrative matters on the transfer of XQF Team (the "Third Payment"). In any events, the Third payment shall be settled before the end of 2020 PEL S2 on 30 August 2020.

The Vendor has also promised to provide the Purchaser invoices within 15 business days after the relevant payments to the Vendor, which shall be value added tax special invoices such that the Purchaser can deduct tax in the sum of 6% of the relevant payments for the Consideration. Otherwise, the part of the tax that cannot be deducted should be returned to the Purchaser.

The Consideration shall be financed by a loan to Nova from Mr. Cheng Ting Kong, the Chairman, the Director and the controlling Shareholder of the Company. As such loan is conducted on normal commercial terms and is not secured by assets of the Group, such financial assistance received by Nova is a fully exempted connected transaction pursuant to Rule 14A.90 of the Listing Rules.

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The Consideration was determined after arm's length negotiations between the parties to the Interests Transfer Agreement taking into account (i) the eligibility of XQF Team to participate in the Esports Contests including but not limited to 2020 PEL S2; (ii) the track record of XQF Team, in particular, XQF Team ranked the first and third in the Esports Contests of Peacekeeper Elite (和平精英) held in 2019 and first half of 2020, respectively;

1. the expected cash rewards to be offered by PEL to the esports contest participants by referencing to the cash rewards offered by Tencent in similar esports contests, in particular, the top twelve participants (including the champions) of similar esports contests organised by Tencent were rewarded ranged from RMB320,000 to RMB13,440,000; (iv) the expected sponsorship to be received by XQF Team upon the completion of the Interests Transfer Agreement; (v) the remaining live stream contracts of XQF Team at hand; (vi) the preliminary valuation of XQF Team at approximately RMB16,000,000 which has been performed by an independent professional valuer based on market value basis by using enterprise value over sales ratio which the independent professional valuer considered to be the most appropriate valuation approach for XQF Team; (vii) the possible enhancement in the revenue bases of the Group's online game segment business after the completion of the Interests Transfer Agreement; (viii) the promotion of the image of the Group in online game sector in the PRC; and (ix) the associated synergies to the Group's online game segment in future.

The warranties given by the Vendor

1. The Vendor guarantees that the contract and matters involved in the Transfer can be filed at Tencent, and the Purchaser can successfully become one of the members/ esports clubs of the PEL and obtain the eligibility to participate in 2020 PEL S2. If the Purchaser is unable to record or is not eligible to participate in 2020 PEL S2 due to the reasons caused by the Vendor, the Purchaser shall have the right to request the Vendor to cancel the Interests Transfer Agreement and request the Vendor to refund the amount paid by the Purchaser in full, and also shall have the right to demand compensation from the Vendor all losses incurred by the Purchaser.
2. the Vendor guarantees that all the rights and interests of XQF Team entitled by the Vendor shall be transferred to the Purchaser as set out in the Interests Transfer Agreement, and that the Vendor shall assist the Purchaser to complete the corresponding transfer procedures.
3. the Vendor guarantees the full disclosure of the Relevant Documents to the Purchaser as of the date of Interests Transfer Agreement and the Relevant Documents shall not hinder the transactions under the Interests Transfer Agreement.

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1. The Vendor guarantees that it cooperates with the Purchaser to complete the change of the ownership of XQF Team and amend the contracts of XQF Team members. The Vendor shall assist to complete the termination agreement in relation to the existing labour contracts of XQF Team members and prompt XQF Team members to enter into new labour contracts with the Purchaser before the Second Payment. The salaries, remuneration and other rights and obligations of XQF Team members shall be subject to the new labour contracts. The Vendor guarantees that XQF Team members shall not refuse to sign the new labour contracts with the Purchaser without a valid reason, while the Purchaser guarantees that the treatment under the new labour contracts is not less favourable than the existing labour contracts. If XQF Team members cannot sign the new labour contracts and/or contestant contracts, the Vendor shall bear all relevant responsibilities.
2. The Vendor ensures that there are no disputes between the Vendor and XQF Team members before the signing of the new labour contracts or that they have reached a settlement for such disputes. If any disputes between the Vendor and XQF Team members cause XQF Team members to claim their rights against the Purchaser, the Vendor shall be responsible for resolution and the Purchaser shall have the right to require the Vendor to compensate in full. The Vendor shall ensure that the foregoing matters will not hinder the transactions under the Interests Transfer Agreement.
3. The Vendor guarantees that XQF Team members are not suspended from participating in any Esports Contests.
4. The Vendor guarantees that the Transfer is genuine, and the definition of the ownership of the Transfer's target is clear. Except for matters disclosed, the Vendor has full disposal rights for the Transfer and no circumstances whereby any laws and regulations prohibit or restrict the Transfer.
5. The Vendor guarantees that the Transfer has fulfilled the corresponding procedures, passed effective internal decision-making, and obtained corresponding approvals.
6. The Vendor guarantees that the relevant materials provided to the Purchaser before the Transfer are true, complete, accurate, legal, and effective, and there are no false records, misleading statements or major omissions.
7. The Vendor shall perform the obligations of issuing invoices, providing contract lists and samples, signing relevant agreements, assisting with formalities, guaranteeing and delivering documents in accordance with the Interests Transfer Agreement.
8. The Vendor guarantees to perform other obligations and responsibilities of the Vendor as stipulated in the Interests Transfer Agreement.

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The liability for breaching the Interests Transfer Agreement

If any party to the Interests Transfer Agreement terminates the Interests Transfer Agreement unilaterally without authorization of the other party, violates the terms and conditions of the Interests Transfer Agreement or breaches the Interests Transfer Agreement leading to the failure to complete the transactions under the Interests Transfer Agreement (each a "Breaching Event"), such Breaching Events shall constitute a major breach of contract, and the other party shall have the right to terminate the Interests Transfer Agreement and have the right to request the breaching party to compensate RMB1 million as liquidated damages and to compensate all losses caused to the non-defaulting party.

INFORMATION OF THE PURCHASER, THE VENDOR AND XQF TEAM

The Purchaser is a company incorporated in the PRC and is an indirect non-wholly owned subsidiary of the Company. The principal business of the Purchaser includes digital technology, computer technology development, technical consultation, the development of software and online games and technical services. The Purchaser is a direct wholly-owned subsidiary of Deluxe Trading (HK) Limited, a company incorporated in Hong Kong with principal business of investment holding and a direct wholly-owned subsidiary of Nova. As such, the Purchaser is an indirect wholly-owned subsidiary of Nova.

Nova is a company incorporated in the British Virgin Islands and a non-wholly owned subsidiary of the Company. Nova is owned as to 70% by the Company and 30% by Ms. Wang Chunyang. The principal business of Nova is esports.

The Group starts to participate in the Esports Contests organised by PEL under the name of Nova Esports Club* (Nova 電子競技俱樂部) upon the completion of the Transfer. The first

Esports Contest is the 2020 PEL S2 and Nova Esports Club* has been selected as one of the Qualifying Participants by PEL. The team who will participate in the 2020 PEL S2 would be namely as NVXQF Team (subject to the approval by PEL).

The Vendor is operating esports club focusing on esports. To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Vendor is 95% owned as to by Zhou Weiyuan (周偉元) and 5% owned as to by Chen Guohai (陳國 海) who third parties independent of and not connected with the Company and its connected persons.

XQF Team is a team focusing on Peacekeeper Elite. The main contestants include four experienced esports players on Peacekeeper Elite. The XQF Team also includes experienced coaches for the daily training, managers for public relationship, and potential esports players on Peacekeeper Elite. XQF Team ranked the first and third in the Esports Contests of Peacekeeper Elite held in 2019 and first half of 2020, respectively.

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Set out below is the unaudited financial information in relation to XQF Team for the year ended 31 December 2019:

	For the
	year ended
	31 December
	2019
	(unaudited)
	RMB
Revenue directly attributable to XQF Team	2,034,012
Profit before taxation	N/A
Profit after taxation	N/A

As XQF Team is not a legal entity under the relevant laws and regulation in the PRC, no profit before taxation nor profit after taxation could be presented. The surplus over expenses of the XQF Team amounted to approximately RMB264,394 for the year ended 31 December 2019.

The XQF Team commenced its training on Peacekeeper Elite since 2019. As such, the financial information of XQF Team in relation to Peacekeeper Elite in 2018 is not available. As the Interests Transfer Agreement only transfers the rights and benefits of XQF Team as specified in the paragraph headed "Subject matter" above and shall not transfer any debts arising from other contracts entered into between XQF Team and the other external parties to the Purchaser, the net book value of XQF Team is not applicable.

INFORMATION ON PEL AND THE 2020 PEL S2

PEL is the official esports contest organizer for professional contestants of the Peacekeeper Elite, which is managed by Tencent. Peacekeeper Elite (和平精英), being a national-level tactical competitive mobile game, is the main Esports Contest for the qualifying participants to compete. Peacekeeper Elite was firstly released in 2019 and soon become one of the most popular mobile games in the PRC. Pursuant to the discussion between the management of the Company and PEL, PEL claimed that it is planning to change the contest seats for Peacekeeper Elite to maintain contest seats at a similar manner of esports contests for Honor of Kings (王者榮耀), another famous national esports contest organised in the PRC.

XQF Team ranked the first and third in the Esports Contests of Peacekeeper Elite (和平精英) held in 2019 and first half of 2020, respectively. Given the recognised track record of XQF Team, the Group is of the view that it is lucrative for the Group to participate in the Esports Contests organised by PEL and/or other parties, including but not limited to the 2020 PEL S2 through the acquisition of the interests of XQF Team.

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REASONS FOR AND BENEFITS OF THE INTERESTS TRANSFER AGREEMENT

The principal activity of the Company is investment holding. The subsidiaries of the Company are principally engaged in the manufacturing and sale of furnishings and home products, online games business, property investment and money lending business.

The Directors are of the view that the Transfer and the participation in the Esports Contests will (i) enhance the revenue bases of the Group's online game segment business; (ii) enhance and promote the image of the Group in the PRC; and (iii) create synergies to the Group's online game segment.

In light of the massive fan base and followers of the Esports Contests in particular related to Peacekeeper Elite, the Directors considered that the participation in the Esports Contests (including 2020 PEL S2) will have a synergy effect on the Group's online games business by providing a platform for the Group to tap into the lucrative online games and esports segment in the PRC.

In view of the above, the Directors consider that the entering into of the Interests Transfer Agreement and the relevant terms, including the Consideration, are on normal commercial terms, fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the Interests Transfer Agreement are more than 5% but less than 25%, such transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

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

"2020 PEL S2"	2020 Peacekeeper Elite League Seasons 2 (和平精英職
	業聯賽2020第二賽季), the Esports Contest organised
	by PEL expected to commence on or about 24 July 2020
"Board"	the board of Directors

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"Company"	Imperium Group Global Holdings Limited, a company
	incorporated in the Cayman Islands with limited liability
	and the issued Shares of which are listed on the main
	board of the Stock Exchange
"connected persons"	has the meaning ascribed to it under the Listing Rules
"Consideration"	the consideration for the Interests Transfer Agreement
"Directors"	directors of the Company
"Esports Contest(s)"	professional esports contest(s) organised by PEL or any
	other parties
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC
"Interests Transfer Agreement"	the agreement entered into between the Purchaser and
	the Vendor, pursuant to which the Vendor has agreed
	to sell, and the Purchaser has agreed to purchase, the
	interests of XQF Team
"Listing Rules"	the Rules Governing the Listing of Securities on the
	Stock Exchange
"Nova"	Nova eSports International Limited, a company
	incorporated in the British Virgin Islands, and an indirect
	non-wholly owned subsidiary of the Company which
	owned as to approximately 70% of its issued share
	capital
"Peacekeeper Elite"	a mobile phone game developed and owned by Tencent
	with the official Chinese name as 和平精英
"PEL"	Peacekeeper Elite League, the official esports contest
	organizer for the Peacekeeper Elite
"PRC"	the People's Republic of China, which, for the purposes
	of this announcement, excludes Hong Kong, the Macau
	Special Administrative Region of the People's Republic
	of China and Taiwan

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"Purchaser"	萬輝(蘇州)數碼科技有限公司 (Wanhui (Suzhou)
	Digital Technology Co., Ltd.*), a non-wholly owned
	subsidiary of the Company owned as to 70% of its issued
	capital and a company incorporated in the PRC with
	limited liability
"Qualifying Participant(s)"	the qualifying participant(s) who is/are eligible to
	participate in the 2020 PEL S2
"Share(s)"	ordinary share(s) of HK$0.01 each in the share capital of
	the Company
"Shareholder(s)"	holder(s) of the Share(s)
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Tencent"	Tencent Holdings Limited, a company incorporated in
	the Cayman Islands with limited liability and the issued
	Shares of which are listed on the main board of the Stock
	Exchange (stock code: 700)
"Transfer"	the transfer of XQF Team from the Vendor to the
	Participant pursuant to the Interests Transfer Agreement
"Vendor"	廈門慶壽堂文化傳媒有限公司 (Xiamen Qingshoutang
	Cultural Media Limited*), who is the owner of XQF
	Team and relevant rights and interest immediately before
	the Transfer
"XQF Team"	the esports team and relevant staff managed by the
	Vendor
"HK$"	Hong Kong dollar(s), the lawful currency of Hong Kong

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"RMB"	Renminbi, the lawful currency of the PRC
"%"	per cent
	By order of the Board
	Imperium Group Global Holdings Limited
	Cheng Ting Kong
	Chairman
Hong Kong, 22 July 2020

*  For identification purposes only.

As at the date of this announcement, the executive directors of the Company are Mr. Cheng Ting Kong, Ms. Yeung So Mui, Mr. Luk Wai Keung and Mr. Leung Kwok Yin; and the independent non-executive directors of the Company are Mr. Fung Tze Wa, Mr. Ting Wong Kacee and Mr. Tse Ting Kwan.

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