China All Access : Inside Information: Potential Transaction Regarding Patent Licenses Involving the Issue of Consideration Shares

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中國全通（控股）有限公司

China All Access (Holdings) Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 633)

INSIDE INFORMATION: POTENTIAL TRANSACTION REGARDING PATENT LICENSES INVOLVING THE ISSUE OF CONSIDERATION SHARES

The Board is pleased to announce that on 29 January 2016, the Company has entered into the MoU with the PRC Company and the Inventor in relation to the potential cooperation between the parties regarding the licensing and development of applications for the Patents pursuant to the Patent Licenses proposed to be granted to a wholly-owned subsidiary of the Company. Pursuant to the MoU, the proposed consideration for the grant of the Patent Licenses to the Subsidiary is HK$470 million and payable in installments by the Company to the Inventor, comprising of cash payments in the total amount of HK$60 million and payment of HK$410 million by the issuance of in total 164,000,000 Consideration Shares at an issue price of HK$2.5 per Share, subject to further negotiations between the parties and the terms of the definitive and formal agreement(s) to be entered into by the parties.

Save for the clauses relating to exclusivity, due diligence, confidentiality, representations and warranties and governing law, the MoU does not create legally binding commitment on the parties to the MoU.

Pursuant to the MoU, the Company is granted an exclusivity period of three months commencing from the date of the MoU for the exclusive right to negotiate with the PRC Company and the Inventor regarding the licensing of the Patents and the development of applications for the Patents in respect of the application fields covered by the Patent Licenses and to conduct due diligence regarding the Patents and the transaction contemplated under the MoU.

Shareholders and potential investors of the Company should note that the proposed transaction as contemplated under the MoU is subject to, among other things, the results of the due diligence by the Company, the final decisions of the Company and the entering into of definitive and formal agreement(s) by the relevant parties, the terms and conditions of which have not been finalized. As a result, the transaction contemplated under the MoU may or may not materialize. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

The Company will make further announcement(s) in connection with the proposed transaction contemplated under the MoU as and where appropriate or if required under the Listing Rules.

This announcement is made by China All Access (Holdings) Limited (the "Company" and, together with its subsidiaries, the "Group") pursuant to Rule 13.09(2)(a) of the Rules (the "Listing Rules") Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

POTENTIAL TRANSACTION REGARDING PATENT LICENSES

The board (the "Board") of directors (the "Directors") of the Company is pleased to announce that on 29 January 2016, the Company has entered into a tripartite memorandum of understanding (the "MoU") with a limited company (the "PRC Company") established in the People's Republic of China (the "PRC") and its sole shareholder (the "Inventor") in relation to the potential cooperation between the parties regarding the licensing of and the development of applications for certain patents registered in the United States of America, the PRC and Taiwan each with validity period expiring in 2029 (the "Patents").

Save for clauses relating to exclusivity, due diligence, confidentiality, representations and warranties and governing law, the MoU does not create legally binding commitment on the parties to the MoU.

The Patents

According to the registration certificates of the Patents, the Patents concern a device for increasing the luminous flux per unit area with the ability to reduce the light-taking distance in respect to the opposite light source. Potential fields of application of such Patents include, without limitation, visible light communications, solar energy photovoltaic generation and recycling of light energies. The PRC Company is the sole registered holder of the Patents and the Inventor is named as the sole inventor in the relevant patent registration documents.

Proposed grant of exclusive patent licenses and consideration

Pursuant to the MoU, it is envisaged that the Company will incorporate a limited company in Hong Kong (the "Subsidiary") as a direct or indirect wholly-owned subsidiary of the Company. The Subsidiary will be granted exclusive licenses in respect of certain application fields of the Patents (including visible light communications, solar energy photovoltaic generation, long distance transmission of light energy, extension of light energy and recycling of light energy) (the "Patent Licenses") by the PRC Company and the Inventor through a master licensing and sub-licensing arrangement to be finalized and agreed based on the definitive and formal agreement(s) to be entered into by the relevant parties.

The proposed consideration for the grant of the Patent Licenses to the Subsidiary is HK$470 million (the "Consideration"), which is determined by the parties after arm's length negotiations with reference to, inter alia, the preliminary proposals and business projections in respect of the Patent Licenses as provided by the PRC Company. The Consideration is only indicative and is subject to further negotiations between the parties having regard to (among other matters) the results of the Company's due diligence regarding the Patents and the transaction contemplated under the MoU and the fair value of the Patent Licenses to be assessed by an independent valuer. The Consideration may be upward or downward adjusted as finally agreed upon the entering into of the definitive and formal agreement(s) by the parties.

Pursuant to the non-binding provisions of the MoU, and subject to the terms of the definitive and formal agreement(s) to be agreed and entered into by the parties, the Consideration is proposed to be payable in installments consisting of (i) cash payment in the total amount of HK$60 million and (ii) payment by new issuance of in total 164,000,000 consideration shares (the "Consideration Share(s)"), being ordinary shares of HK$0.01 each ("Share(s)") in the share capital of the Company, by the Company to the Inventor at an issue price of HK$2.5 per Consideration Share (the "Issue Price") as payment for the total amount of HK$410 million.

The 164,000,000 Consideration Shares represent approximately (i) 9.00% of the existing issued share capital of the Company as at the date of this announcement; and

(ii) 8.26% of the enlarged issued share capital of the Company upon the issue of all such Consideration Shares (assuming that there is no other change to the issued share capital of the Company).

The Issue Price represents (i) a discount of approximately 6.37% to the closing price of HK$2.67 per Share as quoted on the Stock Exchange on 29 January 2016, being the date of the MoU; and (ii) a discount of approximately 1.65% to the average closing price of HK$2.542 per Share as quoted on the Stock Exchange for the five consecutive trading days preceding the date of the MoU.

The cash portion of the Consideration is expected to be funded by the internal resources of the Company and its subsidiaries (the "Group") or in such other manner as the Company may consider appropriate.

Where applicable, it is expected that an application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

Proposed engagement of the Inventor as chief technology officer

As part of the proposed transaction envisaged under the MoU, it is agreed in principle that the Inventor will enter into a service agreement with the Company or the Subsidiary for his engagement as chief technology officer of the Company or the Subsidiary to facilitate the development of applications and product prototypes for the Group pursuant to the Patent Licenses based on his proprietary knowledge and expertise regarding the Patents. The terms and conditions of the definitive service agreement are subject to further negotiation between the parties.

Conditions

It is expected that the transaction contemplated under the MoU will be subject to fulfillment or waiver of the conditions to be set out in the definitive and formal agreement(s) to be entered into by the parties, including but not limited to the following conditions:

1. the passing of the relevant resolution(s) by the Board (including the independent non-executive Directors) for approving the transaction contemplated under the MoU;

2. (where necessary) the passing of the relevant resolution(s) by the shareholders of the Company (the "Shareholders") (where applicable, the independent Shareholders of the Company) in a general meeting or by way of written resolutions for approving the transaction contemplated under the MoU; and