News Network Public : Investment in peer-to-peer lending business by an associate (Amendment)

OM6506001

10 June 2022

Subject: Increase in the registered capital of an associate and investment in peer-to-peerlending business by an associate (Amendment)

To:	Director and Manager
	The Stock Exchange of Thailand

Enclosure: Information Memorandum on the Acquisition of Assets of News Network Corporation Public Company

News Network Corporation Public Company (the "Company") would like to disclose information on the increase in the registered capital of an associate and investment in peer-to-peer lending business by an associate as follows:

1. Increase in the registered capital of an associate- The Board of Directors' Meeting No. 5/2022 held on 9 June 2022 resolved to approve the increase in the registered capital of THB 599.50 million of Peer For All Company Limited ("PFA"), the Company's associate in which the Company holds 20,000 ordinary shares or equivalent to 40 percent of the total number of shares in PFA, where PFA will make an initial capital call of THB 549.50 million within June 2022 and will gradually make additional capital calls in the future until the rest of the capital is fully paid. In this regard, the Company will subscribe for up to 23,980,000 newly issued ordinary shares in PFA and will make the share subscription payment in proportion to its shareholding of up to THB 240 million to PFA (including the share price of THB 200,000 paid by the Company to PFA on the share subscription date at the time of PFA's incorporation) so that PFA may further use such proceeds to purchase 117,645 ordinary shares or equivalent to 99.99 percent of the total number of shares in Nestifly Company Limited ("Nestifly"), which engages in the peer-to-peer lending business via online platform.

The increase in the registered capital and subscription of the newly issued ordinary shares in PFA do not constitute a connected transaction under the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transaction and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Connected Transactions B.E. 2546 (as amended) (the "Connected Transaction Notifications") but constitute a material acquisition of assets pursuant to the Notification of the Capital Market Supervisory Board No. TorChor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Asset B.E. 2547 (as amended) (the "Acquisition or Disposal Notifications"). The transaction size of such transaction calculated based on the reviewed consolidated financial statements of the Company for the

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three months ended 31 March 2022, and the total value of consideration criterion, which gives the highest transaction value, is equivalent to 18.06 percent. In addition, the Company has not had any other acquisition transactions within the past six months prior to the date on which the Board Directors approved the increase in the registered capital of PFA.

The said transaction, therefore, is deemed a Class 2 transaction under the Acquisition or Disposal Notifications, i.e. a transaction whose transaction size is equal to or more than 15 percent, but less than 50 percent, where the Company is required to disclose information on the transaction to the Stock Exchange of Thailand (the "SET") and send a circular to the shareholders within 21 days from the date of information disclosure to the SET.

Details on the increase in the registered capital and subscription of the newly issued ordinary shares in PFA are as shown in the Enclosure.

2. Investment in peer-to-peerlending business by an associate- PFA, the Company's associate in which the Company holds 20,000 ordinary shares or equivalent to 40 percent of the total number of shares in PFA, will purchase 117,645 ordinary shares or equivalent to 99.99 percent of the total number of shares in Nestifly at a total purchase price of THB 500 million from First P2P Company Limited and the shareholders of Nestifly (collectively, the "Sellers") where the details of the investment are as follows:

• Background of the transaction
• 1. On 23 February 2022, the Board of Directors' Meeting No. 2/2022 resolved to approve entry into the initial memorandum of understanding on the entire business transfer with First P2P Company Limited, the scope of investment in Nestifly of up to 51 percent of the registered capital of Nestifly, the placement of a deposit in proportion to the investment in Nestifly of up to 51 percent of the total amount of deposit, and the incorporation of a new subsidiary, i.e. PFA, in preparation for the investment in Nestifly (For further information on the incorporation of PFA, please refer to the Company's letter no. OM6502003 dated 23 February 2022.). The reason for the Company's scope of investment in Nestifly of up to 51 percent is as a result of the Company's negotiations with its strategic partner.
  2. On 24 February 2022, the Company entered into an initial memorandum of understanding on the entire business transfer with the Sellers to purchase 117,645 ordinary shares or equivalent to 99.99 percent of the total number of shares in Nestifly at the total purchase price of THB 500 million.

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1. On 18 March 2022, the Company incorporated a subsidiary, i.e. PFA, to build on its finance business and increase source of income. On the date of incorporation, the Company held 50,000 shares or equivalent to 99.99 percent of the total number of shares in PFA.
2. On 29 April 2022, the Company sold 30,000 ordinary shares or equivalent to 60 percent of the total number of shares in PFA to Aqua Corporation Public Company Limited ("AQUA"), which is not the Company's connected person, where the total value of consideration that the Company received from AQUA was THB 300,000 in accordance with the par value of the shares sold, resulting in PFA ceasing to be the Company's subsidiary. In this regard, the Company still remains as a shareholder holding 20,000 ordinary shares or equivalent to 40 percent of total number of shares in PFA. The sale of 30,000 ordinary shares in PFA is in line with the scope of investment as approved by the Board of Directors, which approved the investment in the proportion of up to 51 percent.
3. After the Management entered into the initial memorandum of understanding on the entire business transfer with the Sellers to purchase the ordinary shares in Nestifly under the instruction of the Board of Directors, PFA placed a deposit to enter into a memorandum of understanding to purchase the ordinary shares in Nestifly with the Sellers and terminate the initial memorandum of understanding as mentioned in item 1. entered into between the Company and the Sellers. Pursuant to the memorandum of understanding to purchase the ordinary shares in Nestifly that PFA entered into with the Sellers, it was agreed that, on the date of entry into the memorandum, PFA must place a deposit of THB 150 million with the Sellers. The deposit payment was divided in proportion to the shareholdings in PFA whereby AQUA placed a deposit of THB 90 million and the Company placed a deposit of THB 60 million. The Sellers will be required to refund the said deposit in full in certain cases, e.g. the Sellers fail to materially comply with the memorandum of understanding and/or the results of the due diligence of Nestifly is not satisfactory to PFA.
4. After the placement of the deposit and the due diligence of Nestifly and the results of the due diligence is satisfactory, PFA will use the proceeds from the subscription of its newly issued ordinary shares by the Company and AQUA to pay the share purchase price in the amount of THB 350 million. It is expected that the due diligence of Nestifly will be completed within June 2022.

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• Contractual parties and their relationship with the listed company

The Sellers	: First	P2P	Company Limited and the shareholders of Nestifly,
	comprising Mr. Paphon Mangkhalathanakun and Mr. Koblarp
	Thaithan (the shareholders of First P2P Company Limited
	comprised (1) Mr. Paphon Mangklatanakul holding 27.24 percent
	shares, (2) Mr. Korblarp Thaithan holding 27.24	percent shares,
	(3) Perpetual Innovation Co., Ltd. holding 25.00	percent shares,
	(4)	Mr.	Suthat Rongrong holding 7.87 percent shares,

1. Mr. Thanat Busayapoka holding 5.06 percent shares,
2. Mr. Thaksa Busayapoka holding 5.06 percent shares,
3. Mr. Suphakrit Pitidhammabhorn holding 1.39 percent shares, and (8) Mr. Wiroj Prasitworanan holding 1.12 percent shares, and the shareholders of Perpetual Innovation Co., Ltd. comprised

1. Mr. Paphon Mangklatanakul holding 36.33 percent shares,

(2)	Mr.	Korblarp Thaithan holding 36.33 percent shares,
(3)	Mr.	Suthat Rongrong holding 10.50 percent shares,

1. Mr. Thanat Busayapoka holding 6.75 percent shares,
2. Mr. Thaksa Busayapoka holding 6.75 percent shares,
3. Mr. Suphakrit Pitidhammabhorn holding 1.85 percent shares, and (7) Mr. Wiroj Prasitworanan holding 1.50 percent shares).

The Purchaser

Relationship among the contractual parties

• PFA, where the shareholdings in PFA are as follows:
  AQUA holding 29,998 shares, or equivalent to 59.9960 percent;
  The Company holding 19,999 shares, or equivalent to 39.9980 percent; and
  Minority shareholders holding 3 shares, or equivalent to 0.0060 percent.
• The Sellers are not the Company's connected persons according to the Connected Transaction Notifications.

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• General characteristics of the transaction

PFA, the Company's associate in which the Company holds 40 percent of the registered capital, will purchase 117,645 ordinary shares or equivalent to 99.99 percent of the total number of shares in Nestifly from the Sellers at the total purchase price of THB 500 million where such purchase price is derived from the negotiations between the parties and the Board of Directors viewed that the value of assets that PFA may acquire from the purchase of the ordinary shares in Nestifly, which has been appraised in accordance with the discounted dash flow approach, was appropriate and in line with the total value of consideration that PFA will pay to the Sellers. The Company will use its own internal cash flows from the disposal of ordinary shares and right of claim in the loan of Wealth Ventures Company Limited to make payments in proportion to its shareholdings in Nestifly in the total amount of THB 240 million, comprising (1) the price of shares in Nestifly of THB 200 million, which PFA will pay to the Sellers; (2) the Sellers' taxes for which PFA must be responsible of THB 10.4 million, which PFA will pay to the Sellers (PFA may use the funds received from its shareholders upon its incorporation to make payments to the Sellers under item (1) or item (2)); and (3) funds for future investment and/or capital expenditure of THB 29.6 million, which the Company will pay to PFA for its future investment and/or capital expenditure, the details of which are as follows:

The Purchaser	:	PFA
The Sellers	: First P2P Company Limited and the shareholders of Nestifly
Assets under the transaction	: 117,645 ordinary shares or equivalent to 99.99 percent of the total
		number of shares in Nestifly.
		Nestifly engages in the peer-to-peer lending business via online
		platform. At present, Nestifly has already obtained the peer-to-
		peer lending business licence.
Key condition precedents	:	1. PFA obtains its board and/or shareholder approval for the
			purchase of the ordinary shares in Nestifly.
		2.	The Sellers do not owe taxes to the Revenue Department on
			the date on which the entire business transfer is completed,
			unless the Sellers have provided bank guarantee or collateral
			as security to cover the taxes owed and execution expenses.

3. The Sellers have arranged for the Company to obtain all necessary consent for the completion of the entire business transfer from all contractual parties under the

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