Asset Acquisitions and Disposals::Proposed acquisition of 100% of the equity interests of J-Dragon Tech (Suzhou) Co., Ltd.

GRAND VENTURE TECHNOLOGY LIMITED

(Incorporated in the Republic of Singapore)

(Company Registration No.: 201222831E)

ANNOUNCEMENT

PROPOSED ACQUISITION OF 100% OF THE EQUITY INTERESTS OF J-DRAGON TECH (SUZHOU) CO., LTD.

1. INTRODUCTION
   The Board of Directors ("Board" or the "Directors") of Grand Venture Technology Limited (the "Company", and together with its subsidiaries, the "Group") wishes to announce that the Company has on 17 December 2021 entered into a conditional sale and purchase agreement (the "SPA") with Lee Boon Kwong, Eng Pau Yuen, Lee Boon Leng (collectively, the "Vendors") and J-Dragon Tech (Suzhou) Co., Ltd. (the "Target Company", and together with the Company and the Vendors, the "Parties") in relation to the proposed acquisition by the Company of 100% of the equity interests of the Target Company, from the Vendors for an aggregate consideration of S$12,203,036 on the terms and conditions of the SPA (the "Proposed Acquisition"). On completion of the
   Proposed Acquisition, the Target Company will become a direct wholly-owned subsidiary of the Company.
2. THE PROPOSED ACQUISITION

1. Information on the Target Company
   The Target Company is a limited liability company incorporated in the People's Republic of China on 8 February 2007. The principal activities of the Target Company are the manufacturing of and/or research and development on parts, modules and tooling for the Aerospace, Medical and Semiconductor segments. The Company was introduced to the Target Company through its business associates.
   The executive director and legal representative of the Target Company is Lee Boon Kwong.
   As of the date of this announcement, the Target Company has a registered capital of US$1.4 million. The current shareholders of the Target Company, being the Vendors, and their respective equity interests in the Target Company are set out in the table in paragraph 2.3.2 below.
2. Information on the Vendors
   The Vendors are citizens of Singapore. Mr Lee Boon Kwong is the founder, and has been the managing director, of the Target Company since 2007, and has approximately 30 years of experience in the precision engineering industry. Mr Lee Boon Leng is the elder cousin of Mr Lee Boon Kwong and has been involved in engineering work for over 30 years. Mr Lee Boon Leng has been a director of Target Company since 2007. Ms Eng Pau Yuen is a business partner of Mr Lee Boon Kwong and she has been in the precision engineering space for approximately 20 years. Ms Eng Pau Yuen has been a director of Target Company since 2010.

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As at the date of this announcement, the Vendors are the legal and beneficial owners of 100% of the equity interests of the Target Company.

As at the date of this announcement, the Vendors (i) do not have any existing interest (whether direct or deemed) in shares of the Company ("Shares"); and (ii) are not related to any of the Directors, substantial shareholders of the Company, or their respective associates.

There is also no connection (including business relationship between the Vendors and the Directors or substantial shareholders of the Company.

2.3. Principal Terms of the Proposed Acquisition

1. The Proposed Acquisition
   Pursuant to the terms and conditions of the SPA, the Vendors shall sell to the Purchaser, and the Purchaser shall acquire from the Vendors, 100% of the equity interests in the Target Company legally and beneficially owned by the Vendors in the proportion set out against each Vendor's name in paragraph 2.3.2 below (the "Sale Equity Interests"), representing 100% of the registered capital of the Target Company, on completion of the Proposed Acquisition.
2. Consideration
   The aggregate consideration for the Proposed Acquisition is S$12,203,036 (the "Aggregate Consideration") and shall be payable by the Purchaser to the Vendors as follows:
3. 1. S$8,000,000 to be satisfied by the issue and allotment of 6,885,274 (rounded down to the nearest whole number) new ordinary shares in the capital of the Company (the "Consideration Shares") at an issue price of S$1.1619 for each Consideration Share (the "Issue Price") to Lee Boon Kwong and Eng Pau Yuen (the "Relevant Vendors") and/or their nominees on completion of the Proposed Acquisition (the
      "Proposed Allotment"): and
   2. S$4,203,036 to be satisfied in cash (the "Cash Consideration") and to be paid by the Purchaser to the Vendors in the following manner:
   3. 1. S$2,982,732 to be paid on the date of completion of the Proposed Acquisition ("Completion Date"); and
      2. the remaining S$1,220,304 to be paid on the date falling 12 months from date of issuance of the Target Company's audited financial statements for the financial year ended 31 December 2021 ("Withholding Payment Date"). In the event of any claims for indemnification by the Company under the SPA, such amount claimed shall first be set-off proportionally against the remaining Cash Consideration payable to the Vendors.

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The breakdown of the Aggregate Consideration payable to the Vendors is set out in the table below:

Vendor	Percentage of Equity	Aggregate amount of	Cash Consideration payable to
	Interests in the Target	Consideration Shares to	Vendor on (i) the Completion
	Company	be issued to Vendor (S$)	Date; and (ii) the Withholding
			Payment Date (S$)
Lee Boon Kwong	37.5%	4,000,000	(i) 118,524
		(via the issue of 3,442,637	(ii) 457,614
		(rounded down to the
		nearest whole number)
		Consideration Shares)
Eng Pau Yuen	37.5%	4,000,000	(i) 118,524
		(via the issue of 3,442,637	(ii) 457,614
		(rounded down to the
		nearest whole number)
		Consideration Shares)
Lee Boon Leng	25.0%	-	(i) 2,745,684
			(ii) 305,076
Total	100.0%	8,000,000	4,203,036
AGGREGATE CONSIDERATION (S$)	12,203,036

The Aggregate Consideration for the Proposed Acquisition was arrived at after an arms' length negotiation on a willing buyer willing seller basis, and taking into consideration factors such as the earnings and assets of the Target Company, technical performance and capabilities of the Target Company in the (i) Aerospace, (ii) Medical and (iii) Semiconductor segments, and other potential benefits that may accrue to the Group.

2.3.3. Adjustment to Aggregate Consideration

In the event of, amongst others, any payment or liability incurred by the Target Company to or for the benefit of any of the Vendors or their associates (including dividends, return of capital, transaction-related fees and expenses, and payments other than as provided for in employment or service contracts with the Target Company) from 30 December 2020 up to the Completion Date, the Vendors shall indemnify the Purchaser in accordance with the SPA and the Aggregate Consideration shall be deemed to be reduced by the amount of such indemnification, and the amount payable to each Vendor shall be reduced proportionally.

Notwithstanding the above, the Target Company shall be entitled to declare and pay dividends of up to S$7,796,964 (the "Agreed Dividends") to the Vendors from its retained earnings as at 31 December 2020, and such Agreed Dividends declared and/or paid shall not affect the Aggregate Consideration payable to each Vendor. The Agreed Dividends shall be reduced by any taxes payable the Vendors in connection with the Proposed Acquisition which are required to be withheld by the Target Company or the Purchaser under applicable laws.

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1. Consideration Shares
   The Issue Price of S$1.1619 for each Consideration Share represents no discount to the volume weighted average price ("VWAP") of S$1.1619 for Shares traded on the Singapore Exchange Securities Trading Limited ("SGX-ST") on 16 December 2021, being the last trading day prior to the signing of the SPA.
   The Consideration Shares, when allotted and issued, will be credited as fully paid for, free and clear of all encumbrances and will rank pari passu with all existing shares in the capital of the Company, save that they do not rank for any dividend, rights, benefits, entitlements, allotments or other distributions, the record date of which falls on or before the date of issue of the Consideration Shares.
   The total number of the Consideration Shares to be issued and allotted by the Company to the Relevant Vendors is 6,885,274, representing approximately 2.08% of the existing share capital of the Company and 2.04% of the enlarged share capital of the Company (taking into consideration the issue and allotment of the Consideration Shares).
   The Board is of the view that the partial satisfaction of the Aggregate Consideration by way of the Proposed Allotment is in line with the Relevant Vendors' interests to continue with the development of the business will ensure alignment of interest of the Relevant Vendors with the Group (which includes the Target Company) and allow the Relevant Vendors and the Company to continue with the development of the Target Company's business together. It would also allow the Company to conserve its cash reserves and provide the Company with greater financial flexibility in the future.
2. Moratorium
   Each Relevant Vendor undertakes, in relation to the Consideration Shares alloted and issued to him/her on
   Completion (the "Lock-upShares"), that he/she will not without the prior written consent of the Company, directly or indirectly:
3. 1. offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, hypothecate, grant security over, encumber or otherwise transfer or dispose of, the Lock-up Shares, or any securities convertible into or exercisable or exchangeable for or which carry rights to subscribe for or purchase any of the Lock-up Shares, or enter into a transaction that would have the same effect;
   2. enter into any swap, hedge or other transaction or arrangement (including a derivative transaction) that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-up Shares, or any securities convertible into or exercisable or exchangeable for or which carry rights to subscribe for or purchase any of the Lock-up Shares;
   3. enter into any transaction which is designed or which may reasonably be expected to result in any of the above; or
   4. announce or publicly disclose any intention to do any of the above,

such restrictions applying to:

1. all of the Lock-up Shares from the Completion Date until the date falling six (6) months from the Completion
   Date (both dates inclusive) (the "First Lock-upPeriod"); and

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1. 1. 50.0% of the Lock-up Shares from the date immediately following the expiry of the First Lock-up Period until the date falling 12 months commencing on the Completion Date (both dates inclusive).
2. Source of Funds
   The Cash Consideration of S$4,203,036 is intended to be funded by the Group's internal resources, of which (i) S$1,500,000 will be funded from the IPO proceeds of S$13.2 million as disclosed in the Offer Document dated 15 January 2019 (the "IPO Proceeds"), and (ii) S$2,703,036 will be funded from the net proceeds of S$23.5 million (the "Placement Proceeds") received by the Company from the placement exercise as disclosed in the circular to shareholders dated 5 February 2021 and announcement dated 21 May 2021 (the "Previous Placement"). As set out in the Company's Offer Document dated 15 January 2019, circular to shareholders dated 5 February 2021 and announcement dated 21 May 2021, S$1.5 million of the IPO Proceeds and S$14.0 million of the Placement Proceeds are intended to be utilised for expansion via mergers and acquisitions, joint ventures and partnerships. The respective utilisation of S$4,203,036 from the IPO Proceeds and Placement Proceeds for the payment of the Cash Consideration is in accordance with the stated use of proceeds.
3. Conditions Precedent
   Completion of the Proposed Acquisition ("Completion") is conditional on, amongst others, the following conditions precedent (the "Conditions Precedent"):
4. 1. the issuance of a business licence to the Target Company by the Administration for Market Regulation of the People's Republic of China (or its designated local branch) ("AMR") reflecting the Company as the sole registered owner of the Sale Equity Interests and the sole shareholder of the Target Company, and the filing or registration with the AMR of the change of shareholder of the Target Company, appointment of authorised representative of the Company and the amendments to the articles of association of the Target Company;
   2. the filing with the Ministry of Commerce of the People's Republic of China (or its designated local branch) of the change of shareholder of the Target Company, the change of ultimate controlling shareholder of the Target Company and the amendments to the articles of association of the Target Company;
   3. the completion of the due diligence exercise on the Target Company (including rectification of any irregularities, if required) to the satisfaction of the Company in its sole and absolute discretion;
   4. there having been, as at the Completion Date, no occurrence of any event nor the discovery of any fact rendering untrue or incorrect in any material respect any of the warranties provided by the Vendors and the Company;
   5. the approval of the board of directors and/or shareholders (if required) of the Target Company having been obtained for the entry into the SPA and all transactions contemplated in the SPA (and in connection therewith), and such approval not having been revoked or amended;
   6. the delivery to the Company of all written consents, approvals, waivers and/or notifications (to the reasonable satisfaction of the Company) from and/or to any counterparties in respect of any agreements entered into by the Vendors or the Target Company, including customers, suppliers, financial institutions or landlords (if required) to the effect that the counterparties consent to the transaction and agree not to

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