on 8 June 2022, Republic Healthcare Limited has resolved to commence the pepper trading business as an additional principal business activity with an annual maximum transaction size up to HKD 14 million. The pepper trading business intended by the Company can be further classified into the following two categories: (i) Spot Trading of Pepper: The Group would match willing sellers and buyers (mainly from America or Europe) and target to earn a margin of around 2%. (ii) Forward Trading of Pepper: The Group would place a forward contract through a Singaporean company, being Asia-Agro Pte Ltd, which is appointed by Haprosimex JSC, a leading producer and exporter of agricultural commodities from Vietnam as their representative.

The Group's initial plan is to commit to a purchase of 200 tons of black pepper (specification being ``black pepper Vietnam 550gl spiral clean'') for an amount of around HKD 8 million. Given that the Group is new in this trade, the arrangement would require the Group to place a deposit of 40% of the transaction sum in advance to the trader with the balance of 60% to be payable upon receipt of the goods. The Group would hold the pepper depending on the price of pepper and its moving trend, which shall not be more than 4 months before selling.

The term of the contract would be cash against document, where the Group will hold on to the original bill of lading and release to the relevant buyer upon receipt of payment. The Group intends to allocate a sum of around HKD 8 million as working capital for the pepper trading business and the maximum transaction size is up to HKD 14 million.