Forebase International : RESPONSE DOCUMENT RELATING TO MANDATORY UNCONDITIONAL GENERAL CASH OFFERS BY RED SUN CAPITAL LIMITED FOR AND ON BEHALF OF THE JOINT OFFERORS TO ACQUIRE ALL THE ISSUED SHARES (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY THE JOINT OFFERORS AND PARTIES ACTING IN CONCERT WITH IT) AND FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS OF FOREBASE INTERNATIONAL HOLDINGS LIMITED

November 04, 2019 at 05:15 pm

THIS RESPONSE DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this Response Document or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in Forebase International Holdings Limited, you should at once hand this Response Document to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this Response Document, 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 Response Document.

FOREBASE INTERNATIONAL HOLDINGS LIMITED

申基國際控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 2310)

RESPONSE DOCUMENT RELATING TO

MANDATORY UNCONDITIONAL GENERAL CASH OFFERS BY

RED SUN CAPITAL LIMITED

FOR AND ON BEHALF OF THE JOINT OFFERORS

TO ACQUIRE ALL THE ISSUED SHARES (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY THE JOINT OFFERORS AND PARTIES ACTING IN CONCERT WITH IT) AND

FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS

OF FOREBASE INTERNATIONAL HOLDINGS LIMITED

Financial Adviser to Forebase International Holdings Limited

Independent Financial Adviser to the Independent Board Committee

5 November 2019

CONTENTS
	pages
EXPECTED TIMETABLE..........................................................................................	ii
DEFINITIONS..............................................................................................................	1
LETTER FROM THE BOARD....................................................................................	7
LETTER FROM THE INDEPENDENT BOARD COMMITTEE.............................	15
LETTER FROM GRAM CAPITAL............................................................................	17
APPENDIX I - FINANCIAL INFORMATION OF THE GROUP......................	I-1
APPENDIX II - GENERAL INFORMATION OF THE GROUP.........................	II-1

- i -

EXPECTED TIMETABLE

Set out below is the expected timetable of the Offers. The expected timetable set out below is indicative only and may be subject to changes. Further announcement(s) will be made in the event of any changes to the expected timetable as and when appropriate.

All time and date references contained below shall refer to Hong Kong local time and dates.

Event		Time and Date
Despatch date of the Offer Document and
the Forms of Acceptance (Note 1)......................................................	Tuesday, 8 October 2019
Offers open for acceptance (Note 1).......................................................	Tuesday, 8 October 2019
Despatch date of the Response Document (Note 2)............................	Tuesday, 5	November 2019
Latest time and date for acceptance of the Offers
on the Closing Date (Notes 3 & 4)..........................................................	no later than 4:00 p.m.
	Tuesday, 19	November 2019
Closing Date (Notes 3 & 4)..............................................................	Tuesday, 19	November 2019

Announcement of the results of the Offers

as at the Closing Date to be published
on the website of the Stock Exchange

and the Company (Note 2)......................................................................	no later than 7:00 p.m.
		Tuesday, 19	November 2019
Latest date for posting of remittances
	in respect of valid acceptances
	received under the Offers (Notes 4 & 5)......................................	Thursday, 28	November 2019

Notes:

1. The Offers, which are unconditional, are made on the date of posting of the Offer Document, and are capable of acceptance on and from that date until 4:00 p.m. on the Closing Date, unless the Joint Offerors revise or extend the Offers in accordance with the Takeovers Code.

- ii -

EXPECTED TIMETABLE

In accordance with the Takeovers Code, the Company is required to post the Response Document within 14 days from the posting of the Offer Document, unless the Executive consents to a later date and the Joint Offerors agree to extend the closing date by the number of days in respect of which the delay in the posting of the Response Document is agreed. As the Company has only resolved on 8 October 2019 to engage a financial adviser to assist the Company in respect of the Offers, including but not limited to the preparation of the draft Response Document, and the Company's financial adviser could only circulate the draft Response Document for the review of the Directors on 17 October 2019, together with the fact that more than half of the Directors are newly appointed by the Company with effect from 10 October 2019, additional time is thus required for the Directors to review, communicate and ascertain the content of the draft Response Document prior to giving consent to submit the draft Response Document to the Securities and Futures Commission for pre-vetting purpose, application has been made on 22 October 2019 and the Executive has granted consent for an extension of the deadline for the despatch of the Response Document to the Shareholders from 22 October 2019 to a date falling on or before 5 November 2019. Pursuant to Rule 8.4 of the Takeovers Code, the Joint Offerors have agreed to an extension of the Closing Date to Tuesday, 19 November 2019 in respect of which the delay in the posting of the Response Document is agreed.
In accordance with the Takeovers Code, where the Response Document is posted after the date on which the Offer Document is posted, the Offers must initially be open for acceptance for at least 28 days following the date on which the Offer Document is posted. As the Offer Document was posted on 8 October 2019, the Offers must be open for acceptance until, and the original latest time and date for acceptance of the Offers is on Tuesday, 5 November 2019. If the Response Document may not be issued within 14 days from the posting of the Offer Document (i.e. 22 October 2019), the Offers should be kept open for at least 14 days after despatch of the delayed Response Document to allow the Independent Shareholders and the Optionholders sufficient time to consider the Response Document. As the despatch date of the Response Document has been delayed to 5 November 2019 for reason as expressed in Note no. 2 above, the latest time and date for acceptance of the Offers has been extended to 4:00 p.m. on Tuesday, 19 November 2019, unless the Joint Offerors revise or extend the Offers in accordance with the Takeovers Code. An announcement will be issued on the website of the Stock Exchange and the Company by 7:00 p.m. on the Closing Date, stating whether the Offers have been extended, revised or expired. In the event that the Joint Offerors decide to extend the Offers and the announcement does not specify the next closing date, at least 14 days' notice by way of an announcement will be given before the Offers are closed in accordance with the Takeovers Code.
If there is a tropical cyclone warning signal number 8 or above or a "black" rainstorm warning signal in force on the Closing Date or the date for posting of remittances and it has (i) not been cancelled in time for trading on the Stock Exchange to resume in the afternoon, the time and date of the close of the Offers or the posting of remittances will be postponed to 4:00 p.m. on the next Business Day which does not have either of those warnings in force in Hong Kong or such other day as the Executive may approve; or (ii) been cancelled in time for trading on the Stock Exchange to resume in the afternoon, the time and date of the close of the Offers or the posting of remittances will remain at 4:00 p.m. on the same Business Day.
Remittances in respect of the cash consideration (after deducting the seller's Hong Kong ad valorem stamp duty) payable for the Offer Shares tendered under the Share Offer and remittances in respect of the cash consideration payable for the Option Offer will be despatched to the Independent Shareholders and Optionholders respectively accepting the Offers by ordinary post at their own risk as soon as possible, but in any event within seven (7) Business Days following the date of receipt of all relevant documents required to render such acceptance complete and valid in accordance with the Takeovers Code. Acceptances of the Offers shall be irrevocable and not capable of being withdrawn, except in the circumstances set out in the section headed "7. Right of withdrawal" in Appendix I to the Offer Document.

- iii -

DEFINITIONS

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

"acting in concert"	has the same meaning ascribed to it under the Takeovers
	Code;
"Announcements"	together the Offer Announcement and the Response
	Announcement;
"associate"	has the same meaning ascribed to it under the Takeovers
	Code;
"Board"	the board of Directors;
"Business Day(s)"	a day on which the Stock Exchange is open for the
	transaction of business;
"BVI"	the British Virgin Islands;
"CCASS"	the Central Clearing and Settlement System established and
	operated by HKSCC;
"Closing Date"	Tuesday, 19 November 2019, the closing date of the Offers,
	or if the Offers are extended, any subsequent closing date of
	the Offers as may be determined and announced by the Joint
	Offerors and approved by the Executive in accordance with
	the Takeovers Code;
"Company"	Forebase International Holdings Limited (stock code: 2310),
	a company incorporated in Hong Kong with limited liability
	and the Shares of which are listed on the main board of the
	Stock Exchange;
"Creditor"	Cheer Hope Holdings Limited, a company incorporated
	in the BVI with limited liability, which is wholly
	and beneficially owned by China Construction Bank
	Corporation based on the corporate substantial shareholder
	notice filed by China Construction Bank Corporation on 23
	May 2019, being a creditor of Ultra Harvest;
"Deed of Share Purchase"	the deed of share purchase dated 3 September 2019 entered
	into among the Joint Offerors and the Receivers in relation
	to the sale and purchase of the Sale Shares;
"Director(s)"	the director(s) of the Company, from time to time;

- 1 -

	DEFINITIONS

"EY"	Ernst & Young Transactions Limited;
"Executive"	Executive Director of the Corporate Finance Division of the
	SFC or any delegate of the Executive Director;
"Facility Agreement"	means the facility agreement dated 21 December 2016 (as
	(i) amended and restated by a first supplemental agreement
	dated 29 December 2017; (ii) amended and supplemented by
	a second supplemental agreement dated 21 September 2018;
	and (iii) amended and supplemented by a third supplemental
	agreement dated 1 April 2019) and entered into between the
	Creditor as lender and Ultra Harvest as borrower in relation
	to the provision of the Loan;
"Financial Year"	For the year ended 31 December;
"Form(s) of Acceptance"	the Form of Share Offer Acceptance and the Form of Option
	Offer Acceptance, and "Form of Acceptance" means either
	of them;
"Form of Option Offer Acceptance"	the pink form of acceptance in respect of the Option Offer
	accompanying the Offer Document;
"Form of Share Offer Acceptance"	the white form of acceptance in respect of the Share Offer
	accompanying the Offer Document;
"Great Match"	Great Match International Limited, a company incorporated
	in the BVI with limited liability and Mr. Choi legally and
	beneficially owns all of its issued shares;
"Group"	the Company and its subsidiaries from time to time;
"Hong Kong"	the Hong Kong Special Administrative Region of the
	People's Republic of China;
"Independent Board Committee"	an independent committee of the Board comprising all the
	non-executive Directors who have no direct or indirect
	interest in the Offers, established for the purpose of advising
	the Independent Shareholders and the Optionholders in
	respect of the Offers and in particular as to whether the
	terms of the Offers are fair and reasonable and as to the
	acceptance of the Offers;

- 2 -

	DEFINITIONS

"Independent Financial Adviser"	Gram Capital Limited, a corporation licensed by SFC to
or "Gram Capital"	carry out Type 6 (advising on corporate finance) regulated
	activities as defined in the SFO, being the independent
	financial adviser appointed for the purpose of advising the
	Independent Board Committee in respect of the terms of the
	Offers and as to their acceptance;
"Independent Shareholders"	the Shareholders other than the Joint Offerors and parties
	acting in concert with any of them;
"Joint Offerors"	Great Match and Rich Vision;
"Last Trading Day"	3 September 2019, being the last trading day for the
	Shares prior to the halt of trading in the Shares prior to the
	publication of the Offer Announcement;
"Latest Practicable Date"	1 November 2019, being the latest practicable date prior
	to the printing of this Response Document for ascertaining
	certain information contained herein;
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange;
"Loan"	a term loan in the principal amount of US$9,000,000
	granted by the Creditor to Ultra Harvest under the Facility
	Agreement;
"Magic Blazes"	Magic Blazes Limited, a company incorporated in the
	BVI with limited liability and Ultra Harvest legally and
	beneficially owns all of its issued shares;
"Middle Spring"	Middle Spring Limited, a company incorporated in the
	BVI with limited liability and Mr. Shen Yong legally and
	beneficially owns all of its issued shares;
"Mr. Cheng"	Mr. Cheng Ting Kong;
"Mr. Choi"	Mr. Choi Yun Chor;
"Ms. Yeung"	Ms. Yeung So Mui;
"Offers"	collectively, the Option Offer and the Share Offer;
"Offer Announcement"	the announcement dated 17 September 2019 issued by the
	Joint Offerors setting out, among other things, details of the
	Offers;

- 3 -

	DEFINITIONS

"Offer Document"	the offer document dated 8 October 2019 issued by Red Sun
	Capital Limited for and on behalf of the Joint Offerors in
	accordance with the Takeovers Code to all the Independent
	Shareholders and the Optionholders, in respect of, among
	other things, details of the Offers;
"Offer Period"	has the meaning ascribed to it under the Takeovers Code,
	being the period commencing from 17 September 2019,
	being the date of the Offer Announcement, until the
	Closing Date, or such other date and/or date to which the
	Joint Offerors may decide to extend or revise the Offers in
	accordance with the Takeovers Code;
"Offer Share(s)"	all the issued Shares (other than those already owned or to
	be acquired by the Joint Offerors or parties acting in concert
	with it) that are subject to the Share Offer;
"Option Offer"	the mandatory unconditional general cash offer made by
	Red Sun Capital Limited for and on behalf of the Joint
	Offerors for the cancellation of all the outstanding Share
	Options in accordance with the Takeovers Code;
"Option Offer Price"	HK$0.0001 per Share Option;
"Optionholder(s)"	the holder(s) of the Share Options;
"PRC"	the People's Republic of China;
"Receivers"	Yen Ching Wai David and So Kit Yee Anita, both of Ernst
	& Young Transactions Limited, the joint and several
	receivers and managers of the Sale Shares;
"Receivership"	the appointment of the Receivers by the Creditor on 20 May
	2019 in respect of the Sale Shares originally held by Ultra
	Harvest, Magic Blazes, Middle Spring and Sincere King
	pursuant to share charges over the Sale Shares charged in
	favour of the Creditor;
"Registrar"	Tricor Standard Limited, the Hong Kong branch share
	registrar and transfer office of the Company;
"Relevant Period"	the period commencing on 17 March 2019, being the date
	falling six months preceding the date of commencement of
	the Offer Period, up to and including the Latest Practicable
	Date;

- 4 -

	DEFINITIONS

"Response Announcement"	the announcement dated 20 September 2019 issued by the
	Company to all the Shareholders and Optionholders in
	response to the Offers in accordance with the Takeovers
	Code;
"Response Document"	this response document dated 5 November 2019 issued by
	the Company to all the Shareholders and Optionholders in
	response to the Offers in accordance with the Takeovers
	Code;
"Rich Vision"	R i c h V i s i o n D e v e l o p m e n t s L i m i t e d , a c o m p a n y
	incorporated in the BVI with limited liability and Mr. Cheng
	legally and beneficially owns all of its issued shares;
"Sale and Purchase Completion"	the completion of the sale and purchase of the Sale Shares
	pursuant to the Deed of Share Purchase;
"Sale Share(s)"	an aggregate of 438,422,315 Shares acquired by the Joint
	Offerors pursuant to the Deed of Share Purchase;
"SFC"	the Securities and Futures Commission of Hong Kong;
"SFO"	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong), as amended from time to time;
"Share Charges"	the share charges executed in favour of the Creditor in
	respect of the Sale Shares;
"Share(s)"	the ordinary shares of HK$0.10 each in the share capital of
	the Company;
"Share Offer"	the mandatory unconditional general cash offer to be made
	by Red Sun Capital Limited for and on behalf of the Joint
	Offerors to acquire all the Offer Shares in accordance with
	the Takeovers Code;
"Share Offer Price"	the price of HK$0.3194 per Offer Share payable in cash by
	the Joint Offerors on the terms of the Share Offer;
"Share Option Scheme"	the share option scheme adopted by the Company on 3 June
	2013 and refreshed on 18 August 2017;
"Shareholder(s)"	holder(s) of Shares;
"Stock Exchange"	The Stock Exchange of Hong Kong Limited;

- 5 -

	DEFINITIONS

"Sincere King"	Sincere King Limited, a company incorporated in the BVI
	with limited liability;
"Takeovers Code"	the Codes on Takeovers and Mergers and Share Buy-backs;
"Trading Day(s)"	a day when the Stock Exchange is open for trading in Hong
	Kong;
"Ultra Harvest"	Ultra Harvest Limited, a company incorporated in the
	BVI with limited liability and Mr. Shen Yong legally and
	beneficially owns 99% of its issued shares;
"Voluntary Announcement"	the voluntary announcement of the Company dated 26 May
	2019 in relation to the Receivership;
"HK$"	Hong Kong dollars, lawful currency of Hong Kong; and
"%"	per cent.

- 6 -

LETTER FROM THE BOARD

FOREBASE INTERNATIONAL HOLDINGS LIMITED

申基國際控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 2310)

Executive Directors:

Ms. YEUNG So Mui (Co-Chairman)

Mr. CHOI Yun Chor (Co-Chairman)

Mr. NG Kwai Wah Sunny

Mr. CHEN Jian

Mr. TAI Kwok Keung Kenny

Mr. LIN Junwei

Mr. SHEN Yong

Mr. PANG Huan Kun

Ms. WANG Yi Ya

Non-executive Director:

Mr. HUANG Xiang Yang

Independent non-executive Directors: Dr. LOKE Yu (alias Loke Hoi Lam) Ms. LAI Cheuk Yu Cherrie

Mr. TING Wong Kacee Mr. YU Lei

Mr. Ernst Rudolf ZIMMERMANN

To the Shareholders,

Dear Sir or Madam,

Registered office and principal place of

business in Hong Kong:

Room 3805, 38/F., Lee Garden One

33 Hysan Avenue, Causeway Bay

Hong Kong

5 November 2019

MANDATORY UNCONDITIONAL GENERAL CASH OFFERS BY

RED SUN CAPITAL LIMITED

FOR AND ON BEHALF OF THE JOINT OFFERORS

TO ACQUIRE ALL THE ISSUED SHARES (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY THE JOINT OFFERORS AND PARTIES ACTING IN CONCERT WITH IT) AND

FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS

OF FOREBASE INTERNATIONAL HOLDINGS LIMITED

- 7 -

LETTER FROM THE BOARD

INTRODUCTION

Reference is made to the Announcements in relation to the Offers.

On 20 May 2019, the Company was informed that the Receivers were appointed by the Creditor in respect of the Sales Shares. As disclosed in the Announcements, the Sale Shares were charged in favour of the Creditor as a security of the payment obligations of Ultra Harvest under the Facility Agreement for the provision of the Loan in the form of Share Charges executed by Ultra Harvest, Magic Blazes, Middle Spring and Sincere King.

Since Ultra Harvest defaulted in the repayment of the Loan, as an event of default under the Facility Agreement, the Creditor exercised its rights under the Share Charges and the Receivership was entered with respect of the Sale Shares.

As disclosed in the Response Announcement, the Company was informed by the Receivers on 3 September 2019 (after trading hours) that the Joint Offerors and the Receivers entered into the Deed of Share Purchase, pursuant to which the Receivers have agreed to sell and the Joint Offerors have agreed to acquire the Sale Shares, representing approximately 60.175% of the entire issued share capital of the Company, at the consideration of HK$140,000,000.00 (equivalent to approximately HK$0.3193 per Sale Share). As informed by the Receivers, the Sale and Purchase Completion took place on 6 September 2019, and according to the Offer Announcement, the Sale Shares were transferred to the respective securities accounts of the Joint Offerors on 9 September 2019.

Immediately upon the Sale and Purchase Completion, the Joint Offerors are required to (i) make a mandatory unconditional general cash offer for all the issued Shares (other than those already owned or to be acquired by the Joint Offerors and parties acting in concert with it) pursuant to Rule 26.1 of the Takeovers Code; and (ii) cancel all the Share Options in compliance with Rule 13 of the Takeovers Code.

The Joint Offerors had on 8 October 2019 despatched the Offer Document setting out details of the Offers together with the relevant Forms of Acceptance.

The purpose of this Response Document is to provide you with, among others, information relating to the Group, details of the Offers, the recommendation from the Independent Board Committee and the advice from Gram Capital.

Independent Shareholders and Optionholders are advised to read this Response Document, including the letter from the Independent Board Committee, the letter from Gram Capital in conjunction with the Offer Document carefully.

- 8 -

LETTER FROM THE BOARD

THE OFFERS

Red Sun Capital Limited is making the Offers for and on behalf of the Joint Offerors to all the Independent Shareholders to acquire all Offer Shares, and to the Optionholders to cancel all Share Options on the terms set out in the Offer Document in accordance with Rules 26.1 and 13 of the Takeovers Code respectively, on the following basis:

Principal terms of the Offers

The Share Offer

For each Offer Share.......................................................................................

HK$0.3194 in cash

The Share Offer Price of HK$0.3194 per Offer Share is approximately equal to but not lower than the purchase price per Sale Share pursuant to the Deed of Share Purchase which was arrived at after arm's length negotiation between the Joint Offerors and the Receivers.

The Offer Shares to be acquired under the Share Offer shall be free from all Encumbrances and together with all rights attached to them, including the rights to receive all dividends and distribution declared, made or paid on or after the date on which the Share Offer is made, being the date of the Offer Document.

The Share Offer is extended to all Shareholders other than the Joint Offerors and parties acting in concert with it in accordance with the Takeovers Code.

The Option Offer

For cancellation of each Share Option.............................................................

HK$0.0001 in cash

Pursuant to Rule 13 of the Takeovers Code and Practice Note 6 of the Takeovers Code, the offer price for the outstanding Share Options would normally represent the difference between the exercise price of the Share Options and the Share Offer Price. Under the Option Offer, given that the exercise price of the outstanding Share Options, being in the range of HK$0.415 to HK$0.470 per Share is above the Share Offer Price, the outstanding Share Options are out-of- money and the offer price for each Share Option (i.e. the Option Offer Price) being offered to Optionholders is at the nominal value of HK$0.0001.

Following acceptance of the Option Offer, the relevant Share Options together with all rights attaching thereto will be entirely cancelled and renounced.

The Offers are unconditional in all respects when they are made and are not conditional upon acceptances being received in respect of a minimum number of Shares or any other conditions.

Further details of the Share Offer and Option Offer, including, among other things, the expected timetable, the terms of the Offers and the procedures for acceptance, are set out in the Offer Document and the respective accompanying Forms of Acceptance.

- 9 -

LETTER FROM THE BOARD

As disclosed in the Offer Document, the Joint Offerors confirm that the Share Offer Price and cancellation price of the Share Options are final and will not be increased.

As at the Latest Practicable Date, the Company had a total of (i) 728,584,797 Shares in issue and

78,030,527 Share Options entitling the grantees to subscribe for Shares at an exercise price range of HK$0.415 to HK$0.470 per Share pursuant to the Share Option Scheme.

Assuming there is no change in the total number of issued Shares and assuming that none of the outstanding Share Options is exercised prior to the Closing Date, 290,162,482 Shares will be subject to the Share Offer and 78,030,527 Share Options will be subject to the Option Offer.

Save as aforesaid, the Company does not have any outstanding options, derivatives, warrants, relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) or securities which are convertible or exchangeable into Shares as at the Latest Practicable Date.

Comparison of value

The Share Offer Price of HK$0.3194 per Offer Share represents:

a discount of approximately 0.19% to the closing price of HK$0.320 per Share as quoted on the Stock Exchange on the Latest Practicable Date;
a premium of approximately 6.47% over the closing price of HK$0.300 per Share as quoted on the Stock Exchange on the Last Trading Day;
a premium of approximately 12.07% over the average closing price of approximately HK$0.285 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 5 consecutive trading days immediately prior to and including the Last Trading Day;
a premium of approximately 12.86% over the average closing price of approximately HK$0.283 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 10 consecutive trading days immediately prior to and including the Last Trading Day;
a premium of approximately 15.72% over the average closing price of approximately HK$0.276 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 30 consecutive trading days immediately prior to and including the Last Trading Day;
a premium of approximately 262.95% over the audited consolidated net asset value attributable to the owners of the Company of approximately HK$0.0880 per Share (based on the total number of issued Shares as at the Latest Practicable Date) as at 31 December 2018 as set out in the 2018 Annual Report; and

- 10 -

LETTER FROM THE BOARD

a premium of approximately 172.76% over the unaudited consolidated net asset value attributable to the owners of the Company of approximately HK$0.1171 per Share (based on the total number of issued Shares as at the Latest Practicable Date) as at 30 June 2019, as set out in the 2019 Interim Result Announcement.

INFORMATION OF THE GROUP

The Group is principally engaged in hotel operation, properties development and provision of property management services.

Your attention is drawn to Appendices I and II to this Response Document which contain further financial and general information of the Group.

SHAREHOLDING STRUCTURE OF THE COMPANY

As at the Latest Practicable Date, the Company has a total of 728,584,797 Shares in issue. The table below sets out the shareholding structure of the Company (i) immediately before the Sale and Purchase Completion; and (ii) immediately upon the Sale and Purchase Completion and as at the Latest Practicable Date:

					(ii) immediately upon the Sale
	(i) immediately before the Sale		and Purchase Completion and
	and Purchase Completion		as at the Latest Practicable Date
			Approximate				Approximate
			Percentage of				Percentage of
	Number of		shareholding		Number of		shareholding
	Shares	(%)		Shares	(%)
The Joint Offerors and parties
acting in concert with any
of them (Note 1)	-		-	438,422,315	60.175%
- Great Match	-		-	219,211,158	30.088%
- Rich Vision	-		-	219,211,157	30.087%
Mr. Shen Yong (Note 2)	6,520,000	0.895%	6,520,000	0.895%
Ms. Meng Qing (Note 3)	5,500,000	0.755%	5,500,000	0.755%
Mr. Shen Ke (Note 4)	5,510,000	0.756%	5,510,000	0.756%
Sincere King (Note 5)	85,500,000	11.735%		-		-
Middle Spring (Note 2)	123,648,678	16.971%		-		-
Ultra Harvest (Note 2)	205,962,125	28.269%	44,908,000	6.164%
Magic Blazes (Note 2)	68,229,512	9.365%	10,000	0.00001%
Public Shareholders	227,714,482	31.254%	227,714,482	31.254%

Total	728,584,797	100%	728,584,797	100%

- 11 -

LETTER FROM THE BOARD

Notes:

The number of Shares held by the Joint Offerors and parties acting in concert with any of them are based on information available in the Offer Document. Great Match and Rich Vision are the Joint Offerors with respect to the Offers. Mr. Choi is the sole beneficial owner of all issued shares and the sole director of Great Match, and Ms. Cheung Yuk Ha Jenny, as Mr. Choi's spouse, is deemed to be interested in the shares held by Mr. Choi by virtue of Part XV of the SFO. Furthermore, Mr. Cheng is the sole beneficial owner of all issued shares and the sole director of Rich Vision, and Ms. Yeung, as Mr. Cheng's spouse, is deemed to be interested in the shares held by Mr. Cheng by virtue of Part XV of the SFO.
Mr. Shen Yong is the legal and beneficial owner of 99% of the issued shares of Ultra Harvest, which in turn, holds all issued shares of Magic Blazes, furthermore, Mr. Shen Yong is the sole legal and beneficial owner of all issued shares of Middle Spring. Mr. Shen Yong as Ms. Meng Qing's spouse, shall be deemed to be interested in the Shares held by Ms. Meng Qing by virtue of Part XV of the SFO.
Ms. Meng Qing as Mr. Shen Yong's spouse, shall be deemed to be interested in the Shares held by Mr. Shen Yong or corporation controlled by Mr. Shen Yong by virtue of Part XV of the SFO.
Mr. Shen Ke is the son of Mr. Shen Yong.
As disclosed in the Offer Document, Ms. Zhang Hong is the sole registered shareholder of Sincere King.

INFORMATION OF THE JOINT OFFERORS

Information of the Joint Offerors has been set out in the section headed "Information of the Joint Offerors" in the Offer Document. The Board is aware of the intention of the Joint Offerors in respect of the Group and its employees as stated in the Offer Document.

INTENTION OF THE JOINT OFFERORS IN RELATION TO THE GROUP

As stated in the Offer Document, it is the intention of the Joint Offerors that the Company will continue to focus on the development of its existing businesses following the close of the Offers. The Joint Offerors do not intend to introduce any major changes to the existing operations and business of the Group upon the close of the Offers, at the same time, the Joint Offerors will conduct a detailed review on the existing principal businesses and operations, and the financial position of the Group for the purpose of formulating business plans and strategies for the Group's long-term business development and will explore other business opportunities for the Group. Subject to the results of such review, and should suitable investment or business opportunities arise, the Joint Offerors may consider whether any assets and/or business acquisitions or disposals by the Group will be appropriate in order to enhance its growth.

As at the Latest Practicable Date, no investment or business opportunity has been identified nor have the Joint Offerors entered into any agreement, arrangement, understanding or negotiation in relation to the injection of any assets or business into the Group.

- 12 -

LETTER FROM THE BOARD

Save for the potential change(s) to the composition of the Board as mentioned below, the Joint Offerors have no plan to terminate the employment of any other employees or other personnel of the Group. However, the Joint Offerors reserve the right to make any changes that they deem necessary or appropriate to the interests of the Group and the Shareholders.

The Board is aware of the intention of the Joint Offerors in respect of the Group and its employees as stated in the Offer Document.

CHANGE TO THE BOARD COMPOSITION OF THE COMPANY

As stated in the Offer Document, the Joint Offerors propose to nominate new Directors to the Board subject to compliance with all the applicable regulatory requirements, including the Takeovers Code and the Listing Rules. Such nominees are Ms. Yeung and Mr. Choi as new executive Directors and co-chairman of the Board, Mr. Chen Jian, Mr. Lin Junwei, Mr. Ng Kwai Wah Sunny, Mr. Tai Kwok Keung Kenny as new executive Directors, and Ms. Lai Cheuk Yu Cherrie and Mr. Ting Wong Kacee as new independent non-executive Directors. The above- mentioned change of Board composition of the Company took effect on 10 October 2019. Details of the existing Directors and the above-mentioned nominated Directors are set out in Appendix II to the Offer Document.

One of the executive Directors namely Mr. Pang Huan Kun, the non-executive Director namely Mr. Huang Xiang Yang and two of the independent non-executive Directors namely Mr. Yu Lei and Mr. Ernst Rudolf Zimmermann will resign with effect from the earliest time permitted under the Takeovers Code.

Any changes to the Board will be made in compliance with the Takeovers Code and the Listing Rules and further announcements will be made as and when appropriate.

MAINTAINING THE LISTING STATUS OF THE COMPANY

As stated in the Offer Document, the Joint Offerors intend the issued Shares to remain listed on the Stock Exchange after the close of the Offers.

The Stock Exchange has stated that if, at the close of the Offers, less than the minimum prescribed percentage applicable to the Company, being 25% of the issued Shares are held by the public, or if the Stock Exchange believes that (i) a false market exists or may exist in the trading of the Shares; or (ii) there are insufficient Shares in public hands to maintain an orderly market, then the Stock Exchange will consider exercising its discretion to suspend dealings in the Shares.

The Independent Shareholders and the Optionholders are advised to refer to the Offer Document for the Joint Offerors' intention regarding maintaining the listing status of the Company. The Company and the Directors have jointly and severally undertaken to the Stock Exchange to take appropriate steps following the Closing Date to ensure that a sufficient public float exists in the Shares in accordance to the Listing Rules.

- 13 -

LETTER FROM THE BOARD

CONFLICT OF INTEREST

As at the Latest Practicable Date, Mr. Choi, an executive Director, is interested in 100% issued share capital of Great Match, as one of the Joint Offerors. Ms. Yeung, an executive Director, is the spouse of Mr. Cheng, who is the ultimate beneficial owner of Rich Vision, as one of the Joint Offerors. To avoid conflict of interest, Mr. Choi and Ms. Yeung do not join the remainder of the Board in giving their views on the Offers as set out in this letter.

RECOMMENDATION AND ADDITIONAL INFORMATION

Pursuant to Rule 2.1 and Rule 2.8 of the Takeovers Code, the Independent Board Committee, which comprise all the non-executive Directors (other than Ms. Lai Cheuk Yu Cherrie and Mr. Ting Wong Kacee), who have no direct or indirect interest in the Offers, namely Mr. Huang Xiang Yang as non-executive Director and Dr. Loke Yu (alias Lok Hoi Lam), Mr. Yu Lei and Mr. Ernst Rudolf Zimmermann as independent non-executive Directors has been established to make a recommendation to the Independent Shareholders and the Optionholders as to whether the terms of Offers are fair and reasonable and as to their acceptance of the Offers. Ms. Lai Cheuk Yu Cherrie and Mr. Ting Wong Kacee were nominated as independent non-executive Directors by the Joint Offerors and therefore may have an interest in the Offers. As such, the Independent Board Committee does not include Ms. Lai Cheuk Yu Cherrie and Mr. Ting Wong Kacee as its committee member.

Gram Capital has been appointed as the Independent Financial Adviser with the approval of the Independent Board Committee to advise the Independent Board Committee in respect of the Offers, in particular, as to whether the terms of the Offers are fair and reasonable and as to their acceptance of the Offers.

Recommendation from the Independent Board Committee has been set out in the letter from the Independent Board Committee. You are advised to read this Response Document (including the letter from the Independent Board Committee and the letter from Gram Capital) together with the Offer Document carefully in respect of the Offers. Your attention is drawn to the additional information contained in the appendices to this Response Document.

In considering what action to take in connection with the Offers, you should consider your own positions, if any, and in case of any doubt, consult your professional advisers.

Yours faithfully,

By order of the Board

FOREBASE INTERNATIONAL HOLDINGS LIMITED

LIN Junwei

Executive Director

- 14 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

FOREBASE INTERNATIONAL HOLDINGS LIMITED

申基國際控股有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 2310)

5 November 2019

To the Independent Shareholders and the Optionholders,

Dear Sir or Madam,

MANDATORY UNCONDITIONAL GENERAL CASH OFFERS BY

RED SUN CAPITAL LIMITED

FOR AND ON BEHALF OF THE JOINT OFFERORS

TO ACQUIRE ALL THE ISSUED SHARES (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY THE JOINT OFFERORS AND PARTIES ACTING IN CONCERT WITH IT) AND

FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS

OF FOREBASE INTERNATIONAL HOLDINGS LIMITED

We refer to the Response Document dated 5 November 2019 issued by the Company of which this letter forms part. Unless the context requires otherwise, terms used in this letter shall have the same meaning as those defined in the Response Document.

We have been appointed to form the Independent Board Committee to consider the terms of the Offers and to give recommendations to the Independent Shareholders and the Optionholders as to whether, in our opinion, the terms of the Offers are fair and reasonable so far as they are concerned and as to the acceptance of the Offers. Gram Capital has been appointed as the Independent Financial Adviser to advise us in this respect. Details of its advice and the principal factors and reasons taken into consideration in arriving at its advice are set out in the "Letter from Gram Capital" on pages 17 to 30 of this Response Document.

We also wish to draw your attention to the "Letter from the Board" and the additional information set out in the appendices to the Response Document.

We, being the members of the Independent Board Committee, have declared that we are independent and do not have any conflict of interest in respect of the Offers and are therefore able to consider the terms of the Offers and to make recommendations to the Independent Shareholders and the Optionholders.

- 15 -

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

RECOMMENDATION

Having considered the terms of the Offers and the advice from Gram Capital, in particular the factors, reasons and recommendations as set out in the "Letter from Gram Capital", we concur with the view of Gram Capital and consider that (i) the terms of the Share Offer are fair and reasonable so far as the Independent Shareholders are concerned, and recommend the Independent Shareholders to accept the Share Offer; and (ii) the terms of the Option Offer are fair and reasonable so far as the Optionholders are concerned, and recommend the Optionholders to accept the Option Offer.

We would also like to remind the Independent Shareholders and the Optionholders who intend to accept the Offers to closely monitor the market price and liquidity of the Shares during the Offer Period, and consider selling their Shares in the open market, where possible, instead of accepting the Offers, if the net proceeds from such sales exceed the net amount receivable under the Offers.

Notwithstanding our recommendations, the Independent Shareholders and the Optionholders are strongly advised that their decision to realise or to hold their investment in the Company depends on their own individual circumstances and investment objectives. If in any doubt, the Independent Shareholders and the Optionholders should consult their own professional advisers for professional advice.

Yours faithfully,

For and on behalf of

Independent Board Committee

	Dr. LOKE Yu
Mr. HUANG Xiang Yang	(alias LOKE Hoi Lam)
Non-executive Director	Independent
	non-executive Director

Mr. YU Lei	Mr. Ernst Rudolf ZIMMERMANN
Independent	Independent
non-executive Director	non-executive Director

- 16 -

LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee in respect of the Offers for the purpose of inclusion in this response document.

Room 1209, 12/F.

Nan Fung Tower

88 Connaught Road Central/

173 Des Voeux Road Central

Hong Kong

5 November 2019

To: The independent board committee of Forebase International Holdings Limited

Dear Sirs,

MANDATORY UNCONDITIONAL CASH OFFERS

BY RED SUN CAPITAL LIMITED

FOR AND ON BEHALF OF THE JOINT OFFERORS

TO ACQUIRE ALL THE ISSUED SHARES

(OTHER THAN THOSE ALREADY OWNED

AND AGREED TO BE ACQUIRED BY THE JOINT OFFERORS AND

PARTIES ACTING IN CONCERT WITH ANY OF THEM)

AND

TO CANCEL ALL THE OUTSTANDING SHARE OPTIONS OF

FOREBASE INTERNATIONAL HOLDINGS LIMITED

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee in respect of the Offers, details of which are set out in the Response Document dated 5 November 2019 issued by the Company to the Independent Shareholders and Optionholders, of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Response Document unless the context requires otherwise.

With reference to the letter from the Board (the "Board Letter") contained in the Response Document, the Company was informed by the Receivers on 3 September 2019 that the Joint Offerors and the Receivers entered into the Deed of Share Purchase, pursuant to which the Receivers agreed to sell and the Joint Offerors agreed to purchase the Sale Shares, representing approximately 60.175% of the total issued share capital of the Company as at 20 September 2019 (being the date of the Response Announcement at an aggregate consideration of HK$140,000,000 (representing approximately HK$0.3193 per Sale Share). Sale and Purchase Completion of the Deed of Share Purchase took place on 6 September 2019 and the Sale Shares were transferred to the respective securities accounts of the Joint Offerors on 9 September 2019.

- 17 -

LETTER FROM GRAM CAPITAL

Immediately following the Sale and Purchase Completion and as at the Latest Practicable Date, the Joint Offerors and parties acting in concert with any of them are in aggregate interested in a total of 438,422,315 Shares, representing approximately 60.175% of the total issued share capital of the Company. Pursuant to Rule 26.1 of the Takeovers Code, upon Sale and Purchase Completion, the Joint Offerors are required to make a mandatory unconditional cash offers (i) for all the issued Shares (other than those already owned or to be acquired by the Joint Offerors and the parties acting in concert with any of them); and (ii) in compliance with Rule 13 of the Takeovers Code, to cancel all the Share Options.

The Share Offer and the Option Offer made by the Joint Offerors are unconditional in all respects.

The Independent Board Committee comprising Mr. HUANG Xiang Yang (being a non-executive Director), Dr. Loke Yu (alias Loke Hoi Lam), Mr. Yu Lei and Mr. Ernst Rudolf Zimmermann (being independent non-executive Directors) has been formed to advise the Independent Shareholders on whether the Offers are, or are not, fair and reasonable and as to the acceptance of the Offers. With reference to the Board Letter, Ms. Lai Cheuk Yu Cherrie and Mr. Ting Wong Kacee were nominated as independent non-executive Directors by the Joint Offerors and therefore may have an interest in the Offers. As such, the Independent Board Committee does not include Ms. Lai Cheuk Yu Cherrie and Mr. Ting Wong Kacee as its committee member. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee in this respect, and our opinion herein is solely for the assistance of the Independent Board Committee in connection with its consideration of the Offers pursuant to Rule 2.1 of the Takeovers Code. The appointment of Gram Capital as the Independent Financial Adviser has been approved by the Independent Board Committee.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee, we have relied on the statements, information, opinions and representations contained or referred to in the Response Document and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date, and should there be any material changes to our opinion after the Latest Practicable Date, Shareholders would be notified as soon as possible. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Response Document were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Response Document, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors' representation and confirmation that there is no undisclosed private agreement/arrangement or implied understanding with anyone concerning the Offers. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules and Rule 2 of the Takeovers Code.

- 18 -

LETTER FROM GRAM CAPITAL

Your attention is drawn to the responsibility statements as set out in the section headed "1. RESPONSIBILITY STATEMENT" of Appendix II to the Response Document. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Response Document, save and except for this letter of advice.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, the Joint Offerors or their respective subsidiaries or associates (if applicable), nor have we considered the taxation implication on the Group or the Shareholders as a result of the Offers.

We have assumed that the Offers will be consummated in accordance with the terms and conditions set forth in the Response Document without any waiver, amendment, addition or delay of any terms or conditions. We have assumed that in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents as required for the Offers, no delay, limitation, condition or restriction will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived from the Offers. In addition, our opinion is necessarily based on the financial, market, economic, industry-specific and other conditions as they existed on, and the information made available to us as at the Latest Practicable Date.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly and fairly extracted, reproduced or presented from the relevant sources while we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Offers, we have taken into consideration the following principal factors and reasons:

Background and terms of the Offers
According to the Board Letter, Red Sun Capital, for and on behalf of the Joint Offerors and in compliance with the Takeovers Code, is making the Offers to acquire all the Offer Shares and to cancel all the Share Options on terms set out in the Offer Document on the following basis:
The Share Offer
For each Offer Share..........................................................................HK$0.3194 in cash
With reference to the Board Letter, the Share Offer Price of HK$0.3194 per Offer Share is approximately equal to but not lower than the purchase price per Sale Share under the Deed of Share Purchase which was arrived at after arm's length negotiation between the parties to the Deed of Share Purchase.

- 19 -

LETTER FROM GRAM CAPITAL

As at the Latest Practicable Date, there were 290,162,482 Offer Shares. On this basis, the value of the Share Offer is HK$92,677,896.75 (assuming no Share Option is exercised prior to the close of the Share Offer).

Further details of the Share Offer are set out in Appendix I to the Offer Document.

The Option Offer

For cancellation of each Share Option...............................................

HK$0.0001 in cash

With reference to the Board Letter, as the exercise price in the range of HK$0.415 to HK$0.47 per Shares for the Share Options is above the Share Offer Price, the Share Options are out-of-money and the offer price for each Share Option is being offered to Optionholders at a nominal price of HK0.0001.

As at the Latest Practicable Date, there were Share Options which entitle the holder thereof to subscribe for 78,030,527 new Shares. On this basis, the total amount required to satisfy the cancellation of all Share Options is approximately HK$7,803.05. Save as disclosed, the Company had no other relevant securities in issue as at the Latest Practicable Date.

Further details of the Option Offer are set out in Appendix I to the Offer Document.

Financial information on the Group
With reference to the Board Letter and as advised by the Directors, the principal activities of the Group are (i) hotel operation business (i.e. the operation of Brentwood Bay Resort (the "Hotel") in Victoria, British Columbia, Canada); and (ii) property management business (i.e. property management in Chongqing, the PRC, conducted through a Company's indirectly wholly-owned subsidiary, namely, 重慶諾富特物業管理有限公司 (Nuofute Property Management Co., Ltd. *) ("Nuofute")).

- 20 -

LETTER FROM GRAM CAPITAL

Set out below is the consolidated financial information of the Group for the two years ended 31 December 2018 and the six months ended 30 June 2019 (with comparative figures of 2018) as extracted from the Company's annual report for the year ended 31 December 2018 (the "2018 Annual Report") and the Company's interim report for the six months ended 30 June 2019 (the "2019 Interim Report"):

	For the	For the
	year ended	year ended
	31 December	31 December	Year on
	2018	2017	year change
	HK$'000	HK$'000	%
	(audited)	(audited)
Revenue	94,582	87,588	7.99
- Hotel operation income	44,757	42,874	4.39
- Properties management income	49,825	44,714	11.43
Gross profit	35,692	32,125	11.10
Loss for the year	(21,820)	(8,529)	155.83
	For the	For the
	six months	six months
	ended 30 June	ended 30	Year on
	2019	June 2018	year change
	HK$'000	HK$'000	%
	(unaudited)	(unaudited)
Revenue	44,099	42,589	3.55
- Hotel operation income	20,302	20,362	(0.29)
- Properties management income	23,797	22,227	7.06
Gross profit	19,269	16,388	17.58
Loss for the period	(5,955)	(11,233)	(46.99)

As depicted from the above table, the Group's revenue for the year ended 31 December 2018 ("FY2018") increased by approximately 7.99% as compared to that for the year ended 31 December 2018 ("FY2017"). With reference to the 2018 Annual Report, the aforesaid increase in the Group's revenue was mainly attributable to:

Increase in hotel operation income as the Hotel achieved occupancy of 80.7% in FY2018 (FY2017: 77.9%) and growth in revenue of other hotel related services; and
Increase in properties management income as a result of the increase in areas under management from approximately 507,000 square metres in FY2017 to approximately 579,000 square metres in FY2018.

- 21 -

LETTER FROM GRAM CAPITAL

The Group's gross profit for FY2018 also increased by approximately 11.10% as compared to that for FY2017. Despite the aforesaid increase in the Group's revenue and gross profit, the Group recorded net loss of approximately HK$22.82 million for FY2018, representing an increase of approximately 155.83% as compared to that for FY2017. With reference to the 2018 Annual Report, the Group recorded profit from discontinued operations of approximately HK$14.22 million during FY2017 as a result of disposal of its electronic component business. Accordingly, the Group's net loss for FY2017 was substantially less than that for FY2018.

As also depicted from the above table, the Group's revenue and gross profit for the six months ended 30 June 2019 continued to increase as compared to the corresponding period in 2018 and the Group's net loss for the six months ended 30 June 2019 decreased as compared to the corresponding period in 2018.

With reference to the 2019 Interim Report:

The Group will actively consider expanding its property management segment through acquisitions while exploring new property management projects;
The Group has been exploring other investment opportunities in hotel operation, property investment and development in Hong Kong, the PRC and other overseas countries; and
The Group is adjusting its overall operational strategies and considering to invest in several service-oriented industries, including cultural, tourism and healthcare sectors. The objective is to synthesize these new investments with existing businesses to transform the Group into a modern city integrated life service provider and bring satisfactory returns to both the Group and the Shareholders.

Set out below are some industry information of the Group's principal activities, namely, hotel operation business and property management business:

Hotel operation business

As aforementioned, the Group's hotel operation business is the operation of the Hotel in Victoria, British Columbia, Canada. As advised by the Directors, the Group commenced its hotel operation business in 2013.

According to the statistics published by Statistics Canada (being the national statistical office of Canada) (www.statcan.gc.ca) in September 2019, tourism spending in Canada increased for 19 consecutive quarters from the third quarter in 2014 to the second quarter in 2019. Total tourism expenditures in Canada increased by approximately 2.2% and tourism demand for accommodation in Canada increased by approximately 5.8% from the second quarter in 2018 to the second quarter in 2019.

- 22 -

LETTER FROM GRAM CAPITAL

Property management business

As aforementioned, the Group's property management business is property management in Chongqing, the PRC, conducted through Nuofute (a Company's indirectly wholly- owned subsidiary). As advised by the Directors, the Group commenced its property management business in 2016.

The National Development and Reform Commission of the PRC issued a notice in March 2019 for《2019 年新型城鎮化建設重點任務》(2019 Key Tasks for New Form Urbanization Development*), which requires, among other things, (i) acceleration on implementation of new form urbanization strategy with principle of citizens urbanization and quality orientation; (ii) promoting achievement of 100 million non-registered population urban settlement target; and (iii) acceleration on urban-rural integration development.

According to the statistics published by the National Bureau of Statistics of the PRC, (i) the disposable income per capita in the PRC increased from approximately RMB20,167 in 2014 to RMB28,228 in 2018, representing a compound annual growth rate (CAGR) of approximately 8.77%; and (ii) the residential expenditure per capita increased from approximately RMB3,201 in 2014 to RMB4,647 in 2018, representing a CAGR of approximately 9.77%.

In addition, according to《重慶市國民經濟和社會發展統計公報》(Statistical Bulletin on National Economic and Social Development of Chongqing*), (i) the gross domestic product of Chongqing increased from approximately RMB1,426.5 billion to approximately RMB2,036.3 billion, representing a CAGR of approximately 9.31%; (ii) the investment in real estate development in Chongqing increased from approximately RMB363.0 billion to approximately RMB424.9 billion, representing a CAGR of approximately 4.01%; and

floor area of completed buildings in Chongqing increased from approximately 37.2 million square meters to approximately 40.8 million square meters, representing a CAGR of approximately 2.37%.

The above industry information of the Group's principal activities is generally positive and the Group may be benefited from such environments. Nevertheless, as the Group had been making loss for eight consecutive financial years ended 31 December 2018 and the six months ended 30 June 2019 (including the period after commencement of the Group's hotel operation business in 2013 and property management business in 2016), it is uncertain as to whether and when the Group can make a turnaround in its loss-making position in future.

- 23 -

LETTER FROM GRAM CAPITAL

Information on the Joint Offerors
To provide Independent Shareholders with information on the Joint Offerors, set out below is the information on the Joint Offerors as extracted from the Offer Document:
Great Match was incorporated in the British Virgin Islands with limited liability as an investment holding company. As at the latest practicable date of the Offer Document, Great Match is wholly-owned by Mr. Choi. Mr. Choi is the sole director of Great Match. Please refer to Appendix II to the Offer Document for further details of Mr. Choi.
Rich Vision was incorporated in the British Virgin Islands with limited liability as an investment holding company. As at the latest practicable date of the Offer Document, Rich Vision is wholly-owned by Mr. Cheng. Mr. Cheng is the sole director of Rich Vision. Mr. Cheng is the chairman and an executive director of Sun International Group Limited (Stock code: 8029), a company principally engaged in money lending, securities, trading of bloodstocks, provision of equine related services and investment in stallions and the issued shares of which are listed on GEM of the Stock Exchange. Mr. Cheng is also the chairman and an executive director of Imperium Group Global Holdings Limited (Stock code: 776), a company principally engaged in household furnishings business which also operates property investment and various loan products and services, as well as the mobile game business, and the issued shares of which are listed on the main board of the Stock Exchange.
The Joint Offerors' intention on the Group
To provide Independent Shareholders with information on the intentions of the Joint Offerors, set out below is the Joint Offerors' intention on the Group as extracted from the Board Letter:
As stated in the Offer Document, it is the intention of the Joint Offerors that the Company will continue to focus on the development of its existing businesses following the close of the Offers. The Joint Offerors do not intend to introduce any major changes to the existing operations and business of the Group upon the close of the Offers, at the same time, the Joint Offerors will conduct a detailed review on the existing principal businesses and operations, and the financial position of the Group for the purpose of formulating business plans and strategies for the Group's long-term business development and will explore other business opportunities for the Group. Subject to the results of the review, and should suitable investment or business opportunities arise, the Joint Offerors may consider whether any assets and/or business acquisitions or disposals by the Group will be appropriate in order to enhance its growth.
As at the latest practicable date of the Offer Document, no investment or business opportunity has been identified nor have the Joint Offerors entered into any agreement, arrangement, understanding or negotiation in relation to the injection of any assets or business into the Group.

- 24 -

LETTER FROM GRAM CAPITAL

Save for the potential change(s) to the composition of the Board as mentioned in the Board Letter, the Joint Offerors have no plan to terminate the employment of any other employees or other personnel of the Group. However, the Joint Offerors reserve the right to make any changes that they deem necessary or appropriate to the interests of the Group and the Shareholders.

The Share Offer Price
Share Offer Price comparison
The Share Offer Price of HK$0.3194 per Offer Share represents:
1. a discount of approximately 0.19% to the closing price of HK$0.32 per Share as quoted on the Stock Exchange as at the Latest Practicable Date;
2. a premium of approximately 6.47% over the closing price of HK$0.300 per Share as quoted on the Stock Exchange on the Last Trading Day;
3. a premium of approximately 12.07% over the average closing price of approximately HK$0.285 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 5 consecutive trading days immediately prior to and including the Last Trading Day;
4. a premium of approximately 12 . 86% over the average closing price of approximately HK$0.283 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 10 consecutive trading days immediately prior to and including the Last Trading Day;
5. a premium of approximately 15 . 72% over the average closing price of approximately HK$0.276 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 30 consecutive trading days immediately prior to and including the Last Trading Day;
6. a premium of approximately 262.96% over the audited consolidated net asset value attributable to the owners of the Company as at 31 December 2018 of approximately HK$0.088 per Share (based on the total number of issued Shares as at the Latest Practicable Date) as set out in the 2018 Annual Report; and
7. a premium of approximately 172.99% over the unaudited consolidated net asset value attributable to equity shareholders of the Company of approximately HK$0.117 per Share based on the total number of issued Shares as at the Latest Practicable Date and the unaudited consolidated net asset value of the Group as at 30 June 2019.

- 25 -

LETTER FROM GRAM CAPITAL

Historical price performance of the Shares

Set out below is a chart showing the movement of the closing prices of the Shares during the period from 3 September 2018 up to the Latest Practicable Date (the "Review Period"), to illustrate the general trend and level of movement of the closing prices of the Shares.

Source: The Stock Exchange's website

Note: Trading in Shares was halted from 4 September 2019 to 20 September 2019 (both days inclusive).

During the Review Period, the lowest and highest closing prices of the Shares as quoted on the Stock Exchange were HK$0.220 recorded on 15 August 2019 and HK$0.425 recorded on 20 June 2019 respectively and the average closing prices of the Shares during the Review Period was approximately HK$0.319. The Share Offer Price of HK$0.3194 is within the range of the lowest and highest closing prices of the Shares and slightly higher than the average closing prices of the Shares during the Review Period. The Share Offer Price was also higher than the closing price of the Shares in 146 out of 274 trading days during the Review Period.

During the Review Period, the closing prices of the Shares fluctuated within the range between HK$0.220 and HK$0.425 and their movement did not form a clear trend during the Review Period.

During the period from 25 June 2019 to 3 September 2019 (i.e. the Last Trading Day), the closing prices of the Shares were below the Share Offer Price. Trading in Shares was halted from 4 September 2019 to 20 September 2019 (both days inclusive). After resumption of trading in Shares on 23 September 2019 following the publication of the Response Announcement, the closing prices of the Shares increased and fluctuated at a level close to the Share Offer Price up to the Latest Practicable Date.

- 26 -

LETTER FROM GRAM CAPITAL

Trading multiples analysis

We noted that price to earnings ratio ("PER") and price to book ratio ("PBR") are commonly adopted trading multiples analysis for share price assessment. Nevertheless, the Group had been making loss for eight consecutive financial years ended 31 December 2018 and the six months ended 30 June 2019, we consider the PER analysis to be inapplicable. In addition, as over 50% of the Group's revenue for FY2018 and the six months ended 30 June 2019 was generated from property management business which is asset-light in nature, we also consider the PBR analysis to be inapplicable.

Historical trading liquidity of the Shares

The number of trading days, the average daily number of the Shares traded per month, and the respective percentages of the Shares' monthly trading volume as compared to (i) the total number of issued Shares held by the public; and (ii) the total number of issued Shares during the Review Period are tabulated as below:

				% of the Average
			Average daily	Volume to total	% of the Average
		Number of	trading volume	number of issued	Volume to total
		trading days	(the "Average	Shares held by	number of
Month	in each month	Volume")	the public	issued Shares
				(Note 1)	(Note 2)
			Number of Shares	%	%
2018
September		19	44,947	0.02	0.01
October		21	44,952	0.02	0.01
November		22	187,727	0.08	0.03
December		19	3,323,895	1.46	0.46
2019
January		22	86,000	0.04	0.01
February		17	69,412	0.03	0.01
March		21	100,667	0.04	0.01
April		19	343,579	0.15	0.05
May		21	81,811	0.04	0.01
June		18	4,377,053	1.92	0.60
July		22	138,909	0.06	0.02
August		22	207,273	0.09	0.03
September (Note 3)		8	20,701,438	9.09	2.84
October		21	3,519,714	1.55	0.48
November
(including 1 November 2019
(i.e. the Latest Practicable Date))	1	302,000	0.13	0.04

Source: The Stock Exchange website

- 27 -

LETTER FROM GRAM CAPITAL

Notes:

Based on 227,714,482 Shares held by the public as at the Latest Practicable Date.
Based on 728,584,797 Shares in issue as at the Latest Practicable Date.
Trading in Shares was halted from 4 September 2019 to 20 September 2019 (both days inclusive).

We noted from the above table that the average daily trading volume of the Shares was generally thin during the Review Period. During the Review Period, (i) save for December 2018, June, September and October 2019, the average daily trading volume of the Shares was below 1% of the total number of issued Shares held by the public; and (ii) save for June and September 2019, the average daily trading volume of the Shares was below 0.5% of the total number of issued Shares.

The exceptionally high trading liquidity of the Shares in September 2019 could possibly be stimulated by the publication of the Offer Announcement and the Response Announcement.

In light of the factors below:

Despite the improvement of the Group's revenue and gross profit, the Group was loss-making for FY2018 and the six months ended 30 June 2019.
Despite the generally positive industry information of the Group's principal activities, the Group had been making loss for eight consecutive financial years ended 31 December 2018 and the six months ended 30 June 2019 (including the period after commencement of the Group's hotel operation business in 2013 and property management business in 2016). It is uncertain as to whether and when the Group can make a turnaround in its loss-making position in future.
The Share Offer Price represents (a) a premium of approximately 6.47% over the closing price of HK$0.300 per Share as quoted on the Stock Exchange on the Last Trading Day; (b) a premium of approximately 12.07% over the average closing price of approximately HK$0.285 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 5 consecutive trading days immediately prior to and including the Last Trading Day; (c) a premium of approximately 12.86% over the average closing price of approximately HK$0.283 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 10 consecutive trading days immediately prior to and including the Last Trading Day; and (d) a premium of approximately 15.72% over the average closing price of approximately HK$0.276 per Share based on the daily closing prices as quoted on the Stock Exchange for the last 30 consecutive trading days immediately prior to and including the Last Trading Day.

- 28 -

LETTER FROM GRAM CAPITAL

The Share Offer Price is within the range of the lowest and highest closing prices of the Shares and slightly higher than the average closing prices of the Shares during the Review Period.
The Share Offer Price was higher than the closing price of the Shares in 146 out of 274 trading days during the Review Period.
Although after resumption of trading in Shares on 23 September 2019 following the publication of the Response Announcement, the closing price of the Shares increased and fluctuated at a level close to the Share Offer Price up to the Latest Practicable Date, there is no guarantee that the Share price will sustain at such level after the Closing Date.
The trading volume of the Shares was generally thin during the Review Period. Independent Shareholders (especially those with relatively sizeable shareholdings) may not be able to realise their investments in the Shares at a price higher than or close to the Share Offer Price after the Closing Date, in particular when they are going to dispose of their entire holdings.

We consider that the Share Offer provides an exit alternative with the Share Offer Price being fair and reasonable for the Independent Shareholders who would like to realise their investments in the Shares.

The Option Offer Price

As the exercise prices in the range of HK$0.415 to HK$0.47 per Shares for the Share Options are above the Share Offer Price, the "see through" price is zero and the offer price for each Share Option is set at a nominal price of HK0.0001. As at the Latest Practicable Date, the Share Options are also out-of-money. In light of the above, we consider the Option Offer Price to be fair and reasonable so far as the Optionholders are concerned.

RECOMMENDATION

Having considered the principal factors and reasons as discussed above, we consider that the terms of the Offers (including the Share Offer Price and Option Offer Price) are fair and reasonable. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to accept the Share Offer and the Optionholders to accept the Option Offers.

Nevertheless, Independent Shareholders who, after reading through the 2018 Annual Report, the 2019 Interim Report, the Offer Document and the Response Document, are optimistic about the future financial performance of the Group after the Offers, may, having regard to their own circumstances, consider retaining all or any part of their Shares.

- 29 -

LETTER FROM GRAM CAPITAL

We would also like to remind the Independent Board Committee to remind the Independent Shareholders to closely monitor the market price and liquidity of the Shares during the Offer Period, and consider selling their Shares in the open market, where possible, instead of accepting the Share Offer, if the net proceeds from such sales exceed the net amount receivable under the Share Offer.

Independent Shareholders should closely monitor the market price and liquidity of the Shares during the Offer Period and carefully consider the relevant risks and uncertainties based on their individual risk preference and tolerance level. Those Independent Shareholders who decide to retain part or all of their investments in the Shares should also carefully monitor the financial performance of the Group as well as the intentions of the Joint Offerors in relation to the Company in the future, and the potential difficulties they may encounter in disposing of their investments in the Shares after the close of the Share Offer.

As different Shareholders/Optionholders would have different investment criteria, objectives and/or circumstances, we would recommend any Shareholders/Optionholders who may require advice in relation to any aspect of the Response Document, or as to the action to be taken, to consult a licensed securities dealer, bank manager, solicitor, professional accountant, tax adviser or other professional adviser.

Yours faithfully,

For and on behalf of

Gram Capital Limited

Graham Lam

Managing Director

* For identification purpose only

- 30 -

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION

Set out below is a summary of the audited consolidated financial results of the Group for the financial years ended 31 December 2016, 2017 and 2018, respectively, as extracted from the relevant published financial statements of the Group for the relevant years, and the unaudited consolidated financial results of the Group for the six months ended 30 June 2018 and 2019 as extracted from the published interim reports of the Company for the relevant periods.

The auditor of the Company, Grant Thornton Hong Kong Limited, has not issued any qualified opinion (including emphasis of matter, adverse opinion and disclaimer of opinion) on the respective financial statements of the Group for the financial years ended 31 December 2016, 2017 and 2018, respectively.

- I-1 -

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

Save as disclosed in the notes below, no other item of any income or expense which are material was recorded in the financial statements of the Group for the years ended 31 December 2016, 2017 and 2018 or the six months ended 30 June 2018 and 2019.

		For the
		six months
		ended
		30 June	30 June	For the year ended 31 December
		2019	2018	2018	2017	2016
		(unaudited)	(unaudited)	(audited)	(audited)	(Restated)
					(Note 1)
		HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
CONTINUING OPERATIONS
Revenue	44,099	42,589	94,582	87,588	84,943
Loss before taxation	(5,376)	(10,012)	(20,584)	(17,834)	(18,334)
Income tax expenses	(589)	(1,221)	(1,236)	(4,912)	(7,849)
Loss for the period/year from
	continuing operations	(5,965)	(11,233)	(21,820)	(22,746)	(26,183)
DISCONTINUED OPERATIONS
Revenue from discontinued operations:
	- Electronic components	-	-	-	100,114	225,204
	- Properties development	-	-	-	-	-
Loss before taxation from
	discontinued operations:
	- Electronic components	-	-	-	(32,734)	(54,166)
	- Properties development	-	-	-	-	-
Income tax expenses from
	discontinued operations:
	- Electronic components	-	-	-	(448)	(1,871)
	- Properties development	-	-	-	-	-
Loss for the year from
	discontinued operations:
	- Electronic components	-	-	-	(33,182)	(56,037)
	- Properties development	-	-	-	-	(370)
Gain on disposal of
	discontinued operations:
	- Electronic components (Note 2)	-	-	-	47,399	-
	- Properties development (Note 3)	-	-	-	-	56,516
Profit for the year from
	discontinued operations	-	-	-	14,217	109
Loss for the period/year attributable
	to owners of the Company	(5,965)	(11,233)	(21,820)	(8,529)	(26,074)

- I-2 -

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

		For the
		six months
		ended
		30 June	30 June	For the year ended 31 December
		2019		2018		2018	2017	2016
		(unaudited)	(unaudited)	(audited)	(audited)	(Restated)
							(Note 1)
		HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
Other comprehensive income/(expense)
for the period/year	2,395		2,003		(6,523)	6,522	(3,848)
Total comprehensive expenses
for the period/year attributable
to owners of the Company	(3,570)	(9,230)	(28,343)	(2,007)	(29,922)
Divided	-	-	-	-	-
Dividend per share	-	-	-	-	-
(Loss)/earnings per share
(basic and diluted)
Continuing operations (HK cents)	(0.82)	(2.06)	(4.11)	(4.98)	(6.44)
Discontinued operations (HK cents)	-	-	-	3.11		0.03

Notes:

On 5 May 2017, the Company (as seller) entered into the sale and purchase agreement with Watsonville International Limited (as purchaser) to sell its electronic component business of the Group, representing 100% issued shares of Kwang Sung Electronics Holdings Co. Limited, Kwang Sung Technology Holdings Co. Limited (光星科技控股有限公司), Shenzhen Kwang Sung Electronics Co., Ltd. (深圳光星電子有限公司) and Shiyan Kwang Sung Electronics Co., Ltd*（石岩光星電子 (深圳)有限公司）(collectively referred to as the "Target Group"). The operating results of the Target Group for the year ended 31 December 2017 were classified as discontinued operations and prior period comparatives had been restated accordingly.
On 16 June 2017, the Group completed the sale of the Target Group and resulted in a gain on disposal of HK$47,399,000.
The Group disposed its entire interest in Best Dollar International Limited, a wholly-owned subsidiary of the Company during the year ended 31 December 2016 and recognised a gain on disposal of HK$56,516,000.

* For identification purpose only

- I-3 -

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

2. CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP

The Company is required to set out or refer to in this Response Document the consolidated statement of financial position, consolidated statement of cash flows and any other primary statement as shown in (i) the unaudited consolidated financial statements of the Group for the six months ended 30 June 2019 (the "2019 Interim Financial Statements") and (ii) the audited consolidated financial statements of the Group for the year ended 31 December 2018 (the "2018 Financial Statements"), together with the notes to the relevant published accounts which are of major relevance to the appreciation of the above financial information.

The 2019 Interim Financial Statements are set out from page 19 to page 56 in the Interim Report 2019 of the Company, which was published on 27 September 2019. The Interim Report 2019 is posted on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.forebase.com.hk), and is accessible via the following hyperlink:

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0927/ltn20190927001.pdf

The 2018 Financial Statements are set out from page 78 to page 200 in the Annual Report 2018 of the Company, which was published on 26 April 2019. The Annual Report 2018 is posted on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.forebase.com.hk), and is accessible via the following hyperlink:

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0426/ltn20190426041.pdf

The 2019 Interim Financial Statements and the 2018 Financial Statements (but not any other part of the Interim Report 2019 or Annual Report 2018 in which they respectively appear) are incorporated by reference into this Response Document and form part of this Response Document.

- I-4 -

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

3. INDEBTEDNESS

As at 30 September 2019, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this Response Document, the Group had the following indebtedness:

	HK$'000
Secured loans, secured and guaranteed	34,427
Amount due to a Director, unsecured and unguaranteed	4,289
Bonds, unsecured and unguaranteed	60,181

Total	98,897

Save as disclosed above, the Group did not, as at the close of business on 30 September 2019, have any other debt securities issued or outstanding, and authorised or otherwise created but unissued, terms loans, other borrowings and indebtedness, bank overdrafts, liabilities under acceptances (other than normal trade bills), acceptance credits, hire purchases commitments, mortgages, charges, guarantees or other material contingent liabilities.

4. MATERIAL CHANGE

Save as and except for the below, there was no material change in the financial or trading position or outlook of the Group since 31 December 2018, being the date to which the latest published audited consolidated financial statements of the Group were made up, up to and including the Latest Practicable Date:

As announced by the Company on 10 April 2019, a direct wholly-owned subsidiary of the Company entered into a sale and purchase agreement in relation to the acquisition of 100% issued share capital of Cherish Possession Limited. Cherish Possession Limited holds 49% of the legal and beneficial interest in the issued share capital of Total Blossom Sdn Bhd (a company incorporated in Malaysia and principally engaged in property investment). The aforesaid acquisition was completed on 17 April 2019 and led to substantial increase in the Group's "interest in joint ventures" as at 31 August 2019 as compared to that as at 31 December 2018. This is also reflected in the substantial increase in the Group's "interest in joint ventures" as at 30 June 2019 as compared to that as at 31 December 2018 set out in the Company's interim report for the six months ended 30 June 2019.

- I-5 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

RESPONSIBILITY STATEMENT
The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this Response Document and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this Response Document have been arrived at after due and careful consideration and there are no other facts not contained in this Response Document, the omission of which would make any statement in this Response Document misleading. The Directors only take responsibility for the correctness of the reproduction or presentation of the information relating to the Offers and the Joint Offerors which is based on the Offer Document.
SHARE CAPITAL AND SHARE OPTIONS Share capital
As at the Latest Practicable Date, the issued and fully paid-up share capital of the Company is 728,584,797 Shares. The Company is incorporated in Hong Kong with limited liability and therefore, the Company does not have any authorised capital and specific value of issued share capital as the concept of par value and requirement for authorised capital have been abolished under section 135 of the Hong Kong Companies Ordinance.
All Shares in issue rank pari passu in all respects with each other including rights to dividends, voting and return of capital. The Company had issued 58,527,776 new Shares since 31 December 2018, being the date to which the latest annual audited financial statements of the Company were made up.
Share Options
As at the Latest Practicable Date, save for the Share Options granted by the Company pursuant to the Share Option Scheme under which 78,030,527 Share Options remain outstanding, the Company has no other outstanding options, derivatives, warrants or securities which are convertible or exchangeable into Shares.
Details of the outstanding Share Options under the Share Option Scheme are set out below:

	Number of Shares
	which may be issued
	pursuant to the exercise
	of the respective
Exercise price of the Share Options (HK$)		Share Options
0.47	32,389,693
0.415	45,640,834

Total	78,030,527

- II-1 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

Other than the Shares in issue and the Share Options, the Company had no other outstanding shares, options, warrants, derivative or other securities that are convertible or exchangeable into Shares or other types of equity interest in issue as at the Latest Practicable Date.

3. DISCLOSURE OF INTEREST

Interest of the Company in the Joint Offerors
As at the Latest Practicable Date, none of the Company nor any member of the Group had any interest in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Joint Offerors, and no such person (including the Company) had dealt in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Joint Offerors.
Interest of the Directors in the Company and in the Joint Offerors

As at the Latest Practicable Date, the following Directors or chief executive of the Company had or were deemed to have interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) and in the Joint Offerors

which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions:

Long positions in the Shares:

			Percentage of the
		Number of	Company's issued
Name of Director	Capacity and nature of interests	Shares held	share capital
Mr. Choi	Interest of controlled corporation	219,211,158	30.088%
	(Note 1)
Ms. Yeung	Interest of spouse (Note 2)	219,211,157	30.087%
Mr. Shen Yong	Beneficial owner	6,520,000	0.895%
	Interest of controlled corporations	44,918,000	6.165%
	(Note 3)
	Interest of spouse (Note 4)	5,500,000	0.755%

- II-2 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

Notes:

1. Great Match is wholly-owned by Mr. Choi and Mr. Choi is the sole director of Great Match.
2. Ms. Yeung is the spouse of Mr. Cheng, who through his wholly-owned subsidiary namely Rich Vision, is interested in the 219,211,157 Shares.
3. Out of the 44,918,000 Shares, 44,908,000 Shares are held by Ultra Harvest, of which 99% of its issued shares is legally and beneficially owned by Mr. Shen Yong; 10,000 Shares are held by Magic Blazes which is wholly-owned by Ultra Harvest.
4. These Shares are held by Ms. Meng Qing, who is the spouse of Mr. Shen Yong, the executive Director. Pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, Mr. Shen Yong is deemed to be interested in those Shares.
Long positions in the underlying Shares:

		Number of
		Shares which
		may be issued
		pursuant to the	Percentage of the
		exercise of	Company's issued
Name of Director	Capacity and nature of interests	Share Options	share capital
Mr. Shen Yong	Beneficial owner	780,306	0.107%
Mr. Huang Xiang Yang	Beneficial owner	2,105,330	0.289%

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests or short positions in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) which were otherwise required to notify the Company and the Stock Exchange pursuant to the Model Code.

- II-3 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

1. Long position of the shares in the Joint Offerors:
  As at the Latest Practicable Date, Mr. Choi, an executive Director, is interested in 100% issued share capital of Great Match and Ms. Yeung, an executive Director and the spouse of Mr. Cheng, who is interested in 100% issued share capital of Rich Vision, is deemed to be interested in the shares in Rich Vision held by Mr. Cheng by virtue of the SFO.
  Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had any interests or short positions in relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Joint Offerors.
Other Interests
As at the Latest Practicable Date:
1. no relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company was owned or controlled by a subsidiary of the Company or by a pension fund (if any) of any member of the Group or by a person who is presumed to be acting in concert with the Company by virtue of class (5) of the definition of acting in concert or who is an associate of the Company as specified in class (2) of the definition of associate under the Takeovers Code but excluding exempt principal traders and exempt fund managers;

no person had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with the Company or with any person who is presumed to be acting in concert with the Company by virtue of classes (1), (2), (3) and (5) of the definition of acting in concert or who is an associate of the Company by virtue of classes (2), (3) and (4) of the definition of associate under the Takeovers Code;
no relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company were managed on a discretionary basis by fund managers (other than exempt fund managers) connected with the Company;
Mr. Shen Yong had indicated that he intended to reject the Share Offer and the Option Offer in respect of the Shares and Share Options held by him and Mr. Huang Xiang Yang had indicated that he intended to reject the Option Offer in respect of the Shares Options held by him; and
No relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company which the Company and any Directors had borrowed or lent.

- II-4 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

DEALING IN THE SECURITIES OF THE COMPANY
1. During the Relevant Period, save for the Deed of Share Purchase involving the 352,922,315 Shares among the Sale Shares ultimately owned by Mr. Shen Yong, an executive Director, none of the Directors had dealt in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company.
2. During the Relevant Period,
3. 1. none of the Company and any of the Directors had dealt in any interest in the equity share capital or any convertible securities, warrants, options and derivatives of the Joint Offerors;
  2. save as disclosed in the section headed "3. Disclosure of Interests" above and the Deed of Share Purchase involving the 352,922,315 Shares among the Sale Shares ultimately owned by Mr. Shen Yong, an executive Director, none of the Directors had dealt in any interest in the equity share capital or any convertible securities, warrants, options and derivatives of the Company;
  3. none of the subsidiaries of the Company or a pension fund (if any) of any member of the Group or by a person who is presumed to be acting in concert with the Company by virtue of class (5) of the definition of acting in concert or who is an associate of the Company as specified in class (2) of the definition of associate under the Takeovers Code but excluding exempt principal traders and exempt fund managers had dealt in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company;
  4. no person, with whom the Company or any person who is presumed to be acting in concert with the Company by virtue of classes (1), (2), (3), (5) of the definition of acting in concert or who is an associate of the Company by virtue of classes (2), (3) and (4) of the definition of associate under the Takeovers Code has an arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code had dealt in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company; and
  5. no fund managers (other than exempt fund managers) connected with the Company had dealt in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company.
LITIGATION
As at the Latest Practicable Date, none of the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened by or against the Company or any of its subsidiaries.

- II-5 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

6. MATERIAL CONTRACTS

Save as disclosed below, there were no material contracts (not being contracts entered into in the ordinary course of business carried on or intended to be carried on by the Group) which have been entered into by any member of the Group after the date falling two years before commencement of the Offer Period up to and including the Latest Practicable Date:

the sale and purchase agreement dated 3 November 2017 (the "SPA") entered into, among others, Forebase China Limited, a wholly-owned subsidiary of the Company as purchaser, Sincere King Limited as vendor and Ms. Zhang Hong as guarantor in relation to the acquisition of 100% issued share capital of Triple Market Limited ("Target Company") and all amount owing by Triple Market Limited and its subsidiaries to Ms. Zhang Hong (the "Shareholder's Loan"), for a consideration of HK$86,900,000 to be satisfied by the allotment and issue of 108,055,556 new Shares at the issue price of HK$0.360 per Share and issue of convertible bonds with a 3 years term and 3% annual interest rate in the principal amount of HK$48,000,000 at a conversion price of HK$0.360 per Share, details of which were set out in the announcements of the Company dated 10 November 2017 and 3 November 2017;
the subscription agreement dated 17 November 2017 entered into between the Company as issuer and Mr. Shen Ke as subscriber in relation to the subscription of a 3% coupon unlisted bonds with maturity date falling on the 84th month immediately following the date of issue of the bonds in the principal amount of HK$10,000,000, details of which are set out in the announcement of the Company dated 17 November 2017;
the supplemental sale and purchase agreement dated 19 January 2018 to the SPA entered into, among others, Forebase China Limited, a wholly-owned subsidiary of the Company as purchaser, Sincere King Limited as vendor and Ms. Zhang Hong as guarantor to revise the size and consideration of the acquisition of the Target Company and the Shareholder's Loan to 49% and HK$42,581,000 respectively, and the revised consideration was satisfied by the Company by the allotment and issue of 90,000,000 new Shares at the issue price of HK$0.360 per Share and issue of corporate bonds with a 36 months term and 3% annual interest rate in the principal amount of HK$10,181,000, details were set out in the announcement of the Company dated 19 January 2018;
the loan capitalisation agreement dated 12 October 2018 (the "Loan Cap Agreement") entered into between the Company as issuer and Mr. Shen Yong as subscriber in relation to the subscription of 123,648,678 new Shares at the issue price of HK$0.342 per Share by Mr. Shen Yong for settlement of outstanding owing by the Company to Mr. Shen Yong (the "Loan Capitalisation"), details were set out in the announcement of the Company dated 12 October 2018;

- II-6 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

the supplement agreement dated 5 November 2018 (the "1st Supplemental Agreement") to the Loan Cap Agreement entered into between the Company as issuer and Mr. Shen Yong as subscriber in relation to certain amendments to the terms of the Loan Capitalisation, details were set out in the announcement of the Company dated 5 November 2018;
the supplemental agreement dated 30 November 2018 to the Loan Cap Agreement and the 1st Supplemental Agreement entered into between the Company as issuer and Mr. Shen Yong as subscriber in relation to certain amendments to the terms of the Loan Capitalisation, details were set out in the announcement of the Company dated 30 November 2018; and
the sale and purchase agreement dated 10 April 2019 entered into, among others, Freemaster Limited, a wholly-owned subsidiary of the Company as purchaser, Mr. Yu Kin Wai Perway and Mr. Chu Hin Ming Alfonso as vendors in relation to the acquisition of 100% issued share capital of Cherish Possession Limited, for a consideration of HK$21,070,000, which was satisfied by the Company by the allotment and issue of an aggregate of 58,527,776 new Shares at the issue price of HK$0.360 per Share, details were set out in the announcement of the Company dated 10 April 2019.

7. EXPERTS AND CONSENTS

The following are qualifications of experts who have given opinion, letter or advice which are contained in this Response Document:

Names	Qualification
Gram Capital Limited	a licensed corporation to carry out Type 6 (advising on
	corporate finance) regulated activities under the SFO

As at the Latest Practicable Date, Gram Capital did not have any shareholding in any member of the Group nor any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, or had any interest, either directly or indirectly, in any assets which had been, since 31 December 2018 (the date to which the latest published annual audited financial statement of the Company were made up), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

Gram Capital has given and has not withdrawn in their written consent to the issue of this Response Document with copy of its letter and the references to its name included herein in the form and context in which they are respectively included.

- II-7 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

ARRANGEMENTS AFFECTING DIRECTORS
1. As at the Latest Practicable Date, no benefit (other than statutory compensation) had been given or will be given to any Director as compensation for loss of office or otherwise in connection with the Offers.
2. As at the Latest Practicable Date, save for the Deed of Share Purchase, there was no agreement or arrangement between any Director and any other person which is conditional on or dependent upon the outcome of the Offers or otherwise connected with the Offers.
3. As at the Latest Practicable Date, save for the Deed of Share Purchase, there was no material contract entered into by the Joint Offerors or any party acting in concert with it in which any Director had a material personal interest.
DIRECTORS' SERVICE CONTRACTS
As at the Latest Practicable Date, the Company has entered into the following letters of appointment with the Directors:

			Amount of fixed
			remuneration payable	Amount of any variable
			under the contract	remuneration payable
	Commencement date and	(excluding arrangement	and other benefits
Name of Director	expiry date of contract		for pension payments)	under the contract
Dr. Loke Yu	From 18 April 2019 to 17	April 2022	HK$240,000 per annum	Nil
(alias Loke Hoi Lam)
Mr. Yu Lei	From 7 January 2019 to 6	January 2022	HK$120,000 per annum	Nil
Mr. Ernst Rudolf Zimmermann	From 18 January 2019 to 17 January 2022	HK$180,000 per annum	Nil

As at the Latest Practicable Date, save as disclosed above, none of the Directors had any existing or proposed service contract with the Company or any of its subsidiaries or associated companies which:

(including both continuous and fixed term contracts) have been entered into or amended within six months before the commencement of the Offer Period;
are continuous contracts with a notice period for 12 months or more; or
are fixed term contracts with more than 12 months to run irrespective of the notice period.

- II-8 -

APPENDIX II	GENERAL INFORMATION OF THE GROUP

MISCELLANEOUS
1. The registered office, the head office and principal place of business of the Company is located at Room 3805, 38/F., The Lee Gardens, 33 Hysan Avenue, Causeway Bay, Hong Kong.
2. The company secretary of the Company is Mr. Leung Tak Chee Frankie. Mr. Leung is a member of Hong Kong Institute of Certified Public Accountants and CPA Australia.
3. The English text of this Response Document shall prevail over their respective Chinese text for the purpose of interpretation.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the documents set out in this section are available for inspection on the websites of the SFC (http://www.sfc.hk) and the Company (http://www.forebase.com.hk) and, during normal business hours from 9:00 a.m. to 5:00 p.m. (other than Saturdays, Sundays and public holidays), at the Company's principal office address at Room 3805, 38/F., The Lee Gardens, 33 Hysan Avenue, Causeway Bay, Hong Kong from the date of this Response Document up to and including the Closing Date:
1. the articles of association of the Company;
2. the annual reports of the Company for each of the three financial years ended 31 December 2018, 31 December 2017 and 31 December 2016;
3. the interim reports of the Company for each of the six months ended 30 June 2019 and 30 June 2018;
4. the letter from the Board asset out on pages 7 to 14 of this Response Document;
5. the letter from the Independent Board Committee as set out on pages 15 to 16 of this Response Document;
6. the letter from Gram Capital as set out on pages 17 to 30 of this Response Document;
7. the written consent referred to in the paragraph headed "Experts and Consents", in this Appendix;
8. the letters of appointment referred to in the paragraph headed "Directors' Service Contracts" in this Appendix;
9. the material contracts referred to in the paragraph headed "Material Contracts" in this Appendix; and
10. this Response Document.

- II-9 -

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Forebase International Holdings Ltd. published this content on 05 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2019 22:14:01 UTC

Market Closed - Hong Kong S.E. Other stock markets 04:08:05 2024-05-31 EDT			5-day change	1st Jan Change
0.064 ^HKD	+190.91%		+128.57%	+178.26%

2023	Times Universal Group Holdings Limited Reports Earnings Results for the Half Year Ended June 30, 2023	CI
2023	Times Universal Group Holdings Limited Auditor Raises 'Going Concern' Doubt	CI

Times Universal Group Holdings Limited Reports Earnings Results for the Half Year Ended June 30, 2023	23-08-30	CI
Times Universal Group Holdings Limited Auditor Raises 'Going Concern' Doubt	23-04-27	CI
Times Universal Group Holdings Limited Reports Earnings Results for the Full Year Ended December 31, 2022	23-03-30	CI
Times Universal Disposes of Unit, Outstanding Loan for HK$1.3 Million	22-12-01	MT
Times Universal Group Holdings Limited Announces Board Appointments	22-11-30	CI
Times Universal Group Holdings Limited Announces Board Changes, Effective October 1, 2022	22-09-30	CI
Times Universal's H1 Loss Widens	22-09-28	MT
Times Universal Group Holdings Limited Announces the Resignation of Loke Yu as an Independent Non-Executive Director	22-09-01	CI
Times Universal Group Holdings Limited Reports Earnings Results for the Half Year Ended June 30, 2022	22-08-30	CI
Times Universal Group Holdings Limited Provides Earnings Guidance for the Six Months Ended 30 June 2022	22-08-26	CI
Times Universal Group Holdings Limited Announces Appointment of Independent Non-Executive Director, Change in Composition of Board Committees and Change of Company Secretary	22-07-29	CI
Times Universal Restores Public Float to 25%	22-05-17	MT
Times Universal Group Holdings Limited Auditor Raises 'Going Concern' Doubt	22-05-12	CI
Times Universal Group Holdings Limited Reports Earnings Results for the Full Year Ended December 31, 2021	22-03-31	CI
Times Universal Group Holdings Limited Announces Management Changes	22-03-31	CI
Choi Yun Chor completed the acquisition of a 6.27% stake in Times Universal Group Holdings Limited (SEHK : 2310) for HKD 4.9 million.	22-03-24	CI
Times Universal Group Holdings Limited Announces Delay in Publication of Audited Consolidated Annual Results Announcement for the Year Ended 31 December 2021	22-03-22	CI
Times Universal, Bidder Set Closing Date for Cash Offer	22-01-20	MT
Times Universal Names Independent Financial Adviser	22-01-13	MT
Times Universal Group Holdings Limited Announces Executive Changes	22-01-03	CI
Choi Yun Chor completed the acquisition of 34.7% stake in Times Universal Group Holdings Limited from Cheng Ting Kong for HKD 27.3 million.	21-12-30	CI
Choi Yun Chor made a mandatory unconditional cash offer to acquire remaining 30.5% stake in Times Universal Group Holdings Limited for HKD 24 million.	21-12-30	CI
Times Universal Group Holdings Limited Reports Earnings Results for the Half Year Ended June 30, 2021	21-08-30	CI
Times Universal Group Holdings Limited Announces Address Changes	21-08-05	CI
Times Universal Group Holdings Limited Auditor Raises 'Going Concern' Doubt	21-04-28	CI

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Times Universal Group Holdings Limited

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