Human Health : Change In Use of Proceeds

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Human Health Holdings Limited 盈健醫療集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1419)

CHANGE IN USE OF PROCEEDS

Reference is made to the prospectus of Human Health Holdings Limited (the ''Company'', together with its subsidiaries, the ''Group'') dated 17 March 2016 (the ''Prospectus''), the announcements of the Company dated 31 March 2016 and 21 April 2016 (the "Allotment Results and Stabilisation Announcements") and the annual report of the Company for the year ended 30 June 2020 published on 30 October 2020. Unless otherwise defined, capitalised terms used in this announcement shall have the same meanings as those defined in the Prospectus.

PLANNED USE OF PROCEEDS

As set out in the Allotment Results and Stabilisation Announcements, Net Proceeds from the Global Offering amounted to approximately HK$84.8 million (including the Net Proceeds from the full exercise of the over-allotment option which took place on 21 April 2016). As disclosed in the Prospectus, the Net Proceeds would be applied for (i) expansion of network in Hong Kong by setting up six new specialist medical centres; (ii) expansion of network in Hong Kong by setting up six new general practice medical centres; (iii) expansion in the PRC market; (iv) acquisition of established medical centres in Hong Kong; (v) brand building; (vi) enhancement of IT infrastructure; and (vii) working capital and other general corporate purposes.

CHANGE IN USE OF PROCEEDS

According to the unaudited management accounts of the Group, as at the date of this announcement, the unutilised Net Proceeds amounted to approximately HK$13.6 million (the "Unutilised Net Proceeds"). For the reasons set out in the paragraph headed ''Reasons for and Benefits of the Change in Use of Proceeds'' below in this announcement, the Board has resolved to change the use of the Unutilised Net Proceeds and the expected timeline of full utilisation of the Unutilised NetProceeds as follows:

Original allocation of

Net Proceeds

HK$ million

Utilised Net

Proceeds as at the

date of this announcement

HK$ million

Unutilised

Net Proceeds as at the date

of this announcementProposed change in allocation of

Unutilised

Net Proceeds

HK$ million

Revised allocation of

Unutilised

Net Proceeds

HK$ million

HK$ million

Expansion of network in Hong Kong by setting up six new specialist medical centres

39.1

39.1

-

-

-

Expansion of network in Hong Kong by setting up six new general practice medical centres

5.9

5.9

-

-

-Expansion in the PRC market

12.7

10.3

2.4

5.6

8.0

Acquisition of established medical centres in Hong Kong

8.4

2.8

5.6

(5.6)

-

Brand building

5.1

3.3

1.8 - 1.8

Enhancement of IT infrastructure

5.1

2.7

2.4 - 2.4

Working capital and other general corporate purposes

8.5

7.1

1.4 - 1.4

Total

84.8

71.2

13.6

It is expected that the unutilised amounts will be used on or before 30 June 2022.

- 13.6

REASONS FOR AND BENEFITS OF THE CHANGE IN USE OF PROCEEDS

Since the first quarter of 2020, the outbreak of coronavirus disease 2019 ("COVID-19") has posed unprecedented challenges to individuals and businesses around the world. The business of the medical industry has inevitably been affected. The impact to the business of the Group , particularly the general practice services, mainly arised from the decline in patient visits due to the significant increase in public health awareness as well as mask-wearing practice, which prevent the spreading of other infectious diseases. In order to reduce the impact of the pandemic on its business, the Group has implemented various strategies by focusing on the provision of COVID-19 test services and other disease prevention services and to turn adversity into opportunities.

Having considered the above factors and in view of the uncertainties that the COVID-19 may bring to the Group's business in the near future, the Group intends to slow down its network expansion plan by acquisition of established medical centres in Hong Kong. Nonetheless, as most of the economic activities in the Mainland China resumed by adopting stringent epidemic control measures, the Group is optimistic as to the economic recovery in the PRC and would like to grasp the growing opportunities in the Mainland China by further expanding its network in the Mainland China. As such, the Group reassesses the business environment and business strategies of the Group and decides to take a prudent approach to reallocate HK$5.6 million of the Unutilised Net Proceeds from acquisition of established medical centres in Hong Kong to the expansion in the PRC market.

In view of the above, the Board considers that the above change in use of proceeds of the Global Offering would allow the Company to deploy its financial resources more efficiently for generating return to the Shareholders and therefore, is in the best interest of the Company and the Shareholders as a whole and it will not have any material adverse effect on the existing business and operations of the Group.

By Order of the Board

Human Health Holdings Limited

Chan Kin Ping

Chairman

Hong Kong, 24 February 2021

As at the date of this announcement, the Board comprises Mr. Chan Kin Ping, JP (also as Chief Executive Officer), Dr. Pang Lai Sheung, Dr. Sat Chui Wan and Mr. Poon Chun Pong as executive Directors and Dr. Lui Sun Wing, Mr. Chan Yue Kwong Michael and Mr. Sin Kar Tim as independent non-executive Directors.