Common use of Background and Rationale Clause in Contracts

Background and Rationale. Pursuant to a subscription agreement dated 21 November 2023, the Company has raised approximately S$1.1 million in net proceeds through the issuance of 98,500,000 shares to the Subscriber. On 30 November 2023, the Company fully repaid the outstanding debt owed to Clearbridge BSA Pte Ltd, improving the working capital of the Company and Group. On 21 December 2023, the Company entered into a subscription agreement with ▇▇. ▇▇▇▇ ▇▇▇▇, on the share subscription of 83,000,000 new ordinary shares in the issued share capital of the Company at an issue price of S$0.0121 per subscription share, to raise gross proceeds of approximately S$1.004 million. The Company has fully utilised the net proceeds of approximately S$1.004 million from the share subscription for working capital purposes. Save for (i) the placement of Shares to ▇▇. ▇▇▇▇ ▇▇▇▇ and Mr. ▇▇▇ ▇▇▇ which was completed on 11 January 2024 (the “2024 Placement”) and 28 November 2023 respectively (the “2023 Placement”, and together with the 2024 Placement, the “Past Placements”) and (ii) the right issues which were completed on 2 December 2022, the Company has not raised cash from an issue of securities in the market in the last 24 months. Pursuant to Rule 704(30) of the Catalist Rule, a breakdown of the use of the proceeds from the Past Placements has been disclosed in full-year unaudited results of the Company for the financial year ended 31 December 2023. As disclosed above in section 3 of this announcement, the Company has entered into the Loan Agreement and as at the date of this announcement, S$1,054,000 has been disbursed by the Subscriber to the Company for its working capital pursuant to the ZH Loan. As at the date of this announcement, the ZH Loan has not been repaid and remains owing by the Company to the Subscriber. Pursuant to the considerations above, the Directors are of the view that the Proposed Subscription is beneficial to the Group as it will increase resources and working capital available to the Company so as to improve cash flow, as part of management’s strategy to achieve continued trading status on Catalist and deliver shareholder value. The Proposed Subscription will improve the working capital of the Company and the Group.