REPL::Rights::Voluntary

Leader Environmental Technologies Limited

利德环保技术有限公司

(Incorporated in the Republic of Singapore on 15 August 2006)

(Company Registration Number: 200611799H)

PROPOSED RENOUNCEABLE NON-UNDERWRITTEN RIGHTS ISSUE

1. INTRODUCTION
   The board of directors (the "Board" or the "Directors") of Leader Environmental Technologies Limited (the "Company", and together with its subsidiaries, the "Group") refers to the announcement made by the Company on 26 April 2021 (the "26 April Announcement") and wishes to announce that the Company is proposing to undertake a renounceable non- underwritten rights issue (the "Rights Issue") of up to 663,488,100 new ordinary shares in the capital of the Company (the "Rights Shares") at an issue price of S$0.10 (the "Issue Price") for each Rights Share, on the basis of one (1) Rights Share for every two (2) existing ordinary shares in the capital of the Company (the "Shares") held by Entitled Shareholders (as defined herein) as at a time and date to be determined by the Board for the purpose of determining the entitlements of the Entitled Shareholders (the "Record Date"), fractional entitlements to be disregarded.
2. THE PROPOSED RIGHTS ISSUE
   The principal terms and conditions of the Rights Issue are set out below.

Principal terms of		Description
issue
Issue Price	:	S$0.10 for each Rights Share, payable in full upon
		acceptance and/or application.
Discount (specifying	:	The Issue Price of S$0.10 for each Rights Share represents
benchmarks and		a discount of approximately:
periods)

1. a discount of approximately 31.0% to the closing price of S$0.145 per Share on the Singapore Exchange Securities Trading Limited (the "SGX-ST") on 23 April 2021 (being the last market day on which the Shares were traded on the SGX-ST immediately prior to the release of the 26 April Announcement) (the "Last Traded Price");
2. a discount of approximately 23.1% to the maximum theoretical ex-rights price ("Maximum TERP") 1 of approximately S$0.130 per Share based on the Last

1 Maximum TERP of each Share is calculated based on the following formula, assuming completion of the Rights Issue based on the Maximum Scenario

Market capitalisation of the Company based on the

Maximum TERP = Last Traded Price + gross proceeds from the Rights Issue

Number of Shares after completion of the Rights Issue

Traded Price and the enlarged share capital of the Company assuming the Maximum Scenario (defined below); and

(c) a discount of approximately 29.6% to the minimum theoretical ex-rights price ("Minimum TERP") 2 of approximately S$0.142 per Share based on the Last Traded Price and the enlarged share capital of the Company assuming the Minimum Scenario (defined below).

Allotment ratio	:	One (1) Rights Share for every two (2) existing Shares held
		by Entitled Shareholders (defined below) as at the Record
		Date, fractional entitlements to be disregarded.
Use of proceeds	:	Please refer to paragraph 4 below on the use of the net
		proceeds arising from the allotment and issue of the Rights
		Shares (the "Net Proceeds") from the Rights Issue.
Purpose of Rights	:	Please refer to paragraph 4 below for further details.
Issue

Such terms and conditions are subject to changes as the Board may, in its absolute discretion, deem fit. The final terms and conditions of the Rights Issue will be contained in the offer information statement (the "Offer Information Statement") in connection with the Rights Issue, to be lodged with the Monetary Authority of Singapore (the "Authority") and to be despatched (or, as the case may be, disseminated) by the Company to the Entitled Shareholders in due course.

1. Basis of Provisional Allotment
   The Rights Issue is proposed to be made on a renounceable non-underwritten basis to all shareholders of the Company (the "Shareholders") who are eligible to participate in the Rights Issue (the "Entitled Shareholders"), on the basis of one (1) Rights Share for every two (2) existing Shares held by the Entitled Shareholders as at the Record Date, fractional entitlements to be disregarded.
2. Size of the Rights Issue
   As at the date of this announcement, the Company has an issued and paid-up share capital of 1,326,976,200 Shares (the "Existing Issued Share Capital"). The Company does not have any treasury shares as at the date of this announcement.
   Based on the Existing Issued Share Capital:
3. 1. assuming that the Rights Issue is fully subscribed, 663,488,100 Rights Shares will be issued pursuant to the Rights Issue (the "Maximum Scenario"); and
   2. assuming that (i) none of the other Entitled Shareholders (other than the Undertaking Shareholder (as defined in paragraph 3.1 below)) or purchasers of the "nil-paid" rights during the "nil-paid" rights trading period subscribe and pay for any Rights Shares; and (ii) only the Undertaking Shareholder subscribes and pays for in full, the Undertaken Rights Shares (as defined in paragraph 3.1 below) in accordance with the Deed of Undertaking (as defined in paragraph 3.1 below), 99,000,000 Rights Shares will be issued pursuant to the Rights Issue (the "Minimum Scenario").

• Minimum TERP of each Share is calculated based on the following formula, assuming completion of the Rights Issue based on the Minimum Scenario

Market capitalisation of the Company based on the

Minimum TERP = Last Traded Price + gross proceeds from the Rights Issue

Number of Shares after completion of the Rights Issue

1. Ranking of the Rights Shares
   The Rights Shares will be payable in full on acceptance and/or application and shall, upon allotment and issue, rank pari passu in all respects with the then existing Shares for any dividends, rights, allotments or other distributions, the record date for which falls on or after the date of issue of the Rights Shares.
   For this purpose, "record date" means, in relation to any dividends, rights, allotments or other distributions, the date as at the close of business (or such other time as may be notified by the Company) on which Shareholders must be registered with the Company, the Company's share registrar, M&C Services Private Limited (the "Share Registrar"), or The Central Depository (Pte) Limited ("CDP"), as the case may be, in order to participate in such dividends, rights, allotments or other distributions.
2. Non-UnderwrittenRights Issue
   The Rights Issue will not be underwritten. The Company has decided to undertake the Rights Issue on a non-underwritten basis in view of the Deed of Undertaking as well as the savings in costs enjoyed by the Company as a result of not having to bear any underwriting fees and commission.
   On the basis that the Deed of Undertaking is fulfilled by the Undertaking Shareholder, the Net Proceeds (as defined in paragraph 4.1 below) from the Minimum Scenario will be sufficient to meet the Company's present funding requirements.
3. Scaling Provision
   Depending on the level of subscription for the Rights Shares, the Company may, if necessary, scale down the subscription and/or excess applications for the Rights Shares by any of the Shareholders (if such Shareholder chooses to subscribe for his/her/its pro-rata Rights Share entitlement and/or apply for excess Rights Shares) to avoid placing the relevant Shareholder and parties acting in concert with him/her/it (as defined in the Singapore Code on Take-overs and Mergers (the "Code")) in the position of incurring a mandatory general offer obligation under the Code, as a result of other Shareholders not taking up, whether partly or in full, their Rights Shares entitlements fully, and/or to avoid the transfer of a controlling interest in the Company, which is prohibited under Rule 803 of the Listing Manual of the SGX-ST (the "Listing Manual"), unless prior approval of the Shareholders is obtained in a general meeting.

3. DEED OF UNDERTAKING

3.1 Non-Underwritten Rights Issue

As at the date of this announcement, Dr Lin Yucheng, the Executive Chairman and Chief Executive Officer of the Company (the "Undertaking Shareholder"), has a direct interest in 198,000,000 Shares, representing approximately 14.9% of the Existing Issued Share Capital.

To demonstrate his confidence in the Rights Issue and his commitment and support to the Company, the Undertaking Shareholder has executed a deed of undertaking dated 3 May 2021, (the "Deed of Undertaking") pursuant to which he has irrevocably undertaken to subscribe and pay for (or procure subscription and payment for) in full at the Issue Price, an aggregate of 99,000,000 Rights Shares (the "Undertaken Rights Shares") (the aggregate value of which is S$9,900,000 based on the Issue Price) to be provisionally allotted to him.

The Undertaking Shareholder will procure the delivery to the SGX-ST of a confirmation from a financial institution that he has sufficient financial resources for the purposes of fulfilling his obligations pursuant to the Deed of Undertaking.

3.2 Resultant shareholdings of the Undertaking Shareholder pursuant to the Deed of Undertaking

Pursuant to the Deed of Undertaking and immediately following the completion of the Rights Issue, the shareholding of the Undertaking Shareholder in the Company will be as follows:

	Maximum Scenario	Minimum Scenario
Name	No. of Shares	%(1)	No. of Shares	%(2)
Lin Yucheng	297,000,000	14.9	297,000,000	20.8

Notes:

1. Based on the enlarged share capital of 1,990,464,300 Shares and rounded to the nearest one decimal place.
2. Based on the enlarged share capital of 1,425,976,200 Shares and rounded to the nearest one decimal place.

As stated in paragraph 2.5 above, depending on the level of subscription for the Rights Shares, the Company may, if necessary, scale down the subscription for the Rights Shares by the Undertaking Shareholder to avoid the transfer of a controlling interest in the Company to the Undertaking Shareholder, which is prohibited under Rule 803 of the Listing Manual unless prior approval of the Shareholders is obtained in a general meeting.

4. RATIONALE FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

The net proceeds of S$1.7 million from the placement of 120,000,000 ordinary shares (which completed on 29 May 2020) and S$8.7 million from the renounceable underwritten rights issue of 587,767,200 ordinary shares (which completed on 3 September 2020) have already been utilised for working capital purposes as well as fully deployed or committed in projects and joint venture with Nanosun to produce high performance membrane, as announced by the Company in its announcements dated 6 January 2021, 11 January 2021 and 18 January 2021, and prior to the Company's announcement dated 6 January 2021 and 28 January 2021 respectively, in which the Company announced that it has secured a RMB56.5 million (approximately S$11.5 million) design, supply and commissioning contract for the treatment and recycling of industrial wastewater at Shijiazhuang National Economic Development Zone, and a RMB62.47 million (approximately S$12.7 million) Build-Operate-Transfer ("BOT") contract to treat the municipal sludge from the wastewater treatment plants in Jinghai District, Tianjin City.

Further, as announced by the Company on 26 April 2021, the Proposed Placement has been terminated and the Rights Issue is being undertaken as an alternative to such Proposed Placement. As such, in lieu of the Proposed Placement and proceeds which could have been raised thereunder, the Company has decided to undertake the Rights Issue to enable the Company to invest in the above-mentioned project and to have resources to invest in other large scale environmental related projects, especially BOT projects. In addition, the Company also intends to invest in synergistic companies or companies with environmental technologies which are complementary to the Group's business.

The estimated net proceeds from the Rights Issue (the "Net Proceeds"), assuming (a) the Maximum Scenario, the Net Proceeds (after deducting estimated costs and expenses of S$0.30 million), is expected to be approximately S$66.05 million, and (b) the Minimum Scenario, the estimated Net Proceeds (after deducting estimated costs and expenses of S$0.30 million), is expected to be approximately S$9.60 million. The Company intends to use the Net Proceeds in the following manner, under both scenarios:

Use of the Net Proceeds	Percentage of the Net
	Proceeds (%)
Business investments and acquisitions of environmental
related businesses, payments of tender deposits,	95
performance bonds and other project related expenses in
respect of sludge treatment, industrial wastewater and
high-performance membrane production projects
General working capital purposes (including payments of
professional fees and compliance costs, payroll and other	5
office and related expenses)

The above allocations are based on the Maximum Scenario and the Minimum Scenario only. In the event the Net Proceeds fall in between the Maximum Scenario and the Minimum Scenario and there are deviations to the above allocations, the Company will make the necessary announcements on the allocations when the final Net Proceeds have been determined. It is anticipated that the allocations would not deviate significantly from the above illustrations.

Pending the deployment of the Net Proceeds for the abovementioned purposes, such proceeds may, subject to relevant laws and regulations, be deposited with banks and/or financial institutions, invested in short-term money markets instruments and/or marketable securities and/or used for any other purposes on a short-term basis as the Directors may, in their absolute discretion, deem appropriate in the interests of the Group.

The Company will make periodic announcements on the utilisation of the Net Proceeds as and when such proceeds are materially disbursed, and whether such use is in accordance with the stated use and in accordance with the percentage allocated. The Company will also provide a status report on the use of the Net Proceeds in the Company's interim and full year financial results announcement(s) and in the Company's annual report(s), until such time the Net Proceeds have been fully utilised. Where there is any material deviation from the stated use of the Net Proceeds, the Company will announce the reasons for such deviation.

In the event that the Net Proceeds are to be used for working capital, the Company will disclose a breakdown with specific details on the use of the Net Proceeds for working capital in its announcements and annual reports.

5. CONDITIONS FOR THE RIGHTS ISSUE

5.1 Approvals

The Rights Issue is subject to, inter alia, the following:

1. the in-principle approval of the SGX-ST for the listing of and quotation for the Rights Shares on the SGX-ST; and
2. the lodgment, by the Company, of the Offer Information Statement, together with all other accompanying documents (if applicable) in respect of the Rights Issue, with the Authority.

The Company will be applying to the SGX-ST to seek its in-principle approval for the listing of and quotation for the Rights Shares on the SGX-ST.