Chi Kingstone (01380.HK) announced on October 29th that the company received a default notice from AOFI lawyers on October 29, 2024. According to the default notice, after the conversion total value of HK$1,250,000 convertible notes was delivered on October 4, 2024, the company failed to deliver the requested convertible shares to AOFI by October 9, 2024, and had still not delivered the requested convertible shares to AOFI as of the default notice date. Despite negotiating with AOFI on delivering the requested convertible shares since October 10, 2024, AOFI declared a dispute over the revised and restated subscription agreement default event ('the Dispute').

According to the default notice, AOFI has declared the following immediate due and payable amounts: (i) the company must redeem the outstanding convertible notes of HK$2,250,000 at 118%, totaling HK$2,655,000 and all accrued but unpaid interest up to October 28, 2024, amounting to HK$21,243.17; (ii) on October 24, 2024, abnormal trading volume and price fluctuations of the company's shares occurred, with a surge in trading volume, the trading day's volume-weighted average price reaching HK$0.4116, and due to not receiving the requested convertible shares by October 9, 2024, AOFI had no opportunity to buy or sell the requested convertible shares on October 24, 2024, resulting in a loss of revenue of HK$5,893,346.91 ('Revenue Loss', together with the redemption amount referred to as 'default redemption amount'); and (iii) default interest calculated at a monthly rate of 3.0%, accumulating daily until AOFI receives the full default redemption amount and related accruing default interest day (inclusive).

According to the default notice, if the company fails to pay the above amounts by November 1, 2024, AOFI will take legal action against the company. The company is currently assessing the impact of this dispute on the group's financial condition and operations.