TOTM TECHNOLOGIES LIMITED

(Formerly known as "Yinda Infocomm Limited") (Incorporated in the Republic of Singapore) (Company Registration No. 201506891C)

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INVESTMENT IN PT. CAKRAWALA DATA INTEGRASI

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1. INTRODUCTION

1.1. The board of directors (the "Board" or the "Directors") of TOTM Technologies Limited (formerly known as "Yinda Infocomm Limited") ("Totm", the "Company", and together with its subsidiaries, the "Group") wishes to announce that the Company has entered into a convertible loan agreement (the "Convertible Loan Agreement") and a cooperation agreement (the "Cooperation Agreement") with PT. Cakrawala Data Integrasi ("CDI") pursuant to which the Company will extend a convertible loan (the "Convertible Loan") of a principal amount of US$3,750,000 (equivalent to approximately S$5,122,0001) (the "Convertible Loan Amount") to CDI (the "CDI Investment"), and enter into an exclusive cooperation arrangement to support CDI's provision of identity management solutions under Platform Bersama (as defined below).

2. INFORMATION ON CDI

  1. CDI is a company incorporated in Indonesia on 6 August 2019, and as at the date of this announcement, has an authorised capital of IDR 4,000,000,000 (equivalent to approximately S$380,0002) divided into 4,000 ordinary shares with nominal value of IDR 1,000,000 per share. 25.0% of the authorised capital has been issued with a total of 1,000 shares and nominal value of IDR 1,000,000,000 (equivalent to approximately S$95,000).
  2. As at the date of this announcement, the issued shares in CDI are currently owned by Muhammad Reiza Rizki Saleh (30.0%) and Dery Isna Prasetia (70.0%). Dery Isna Prasetia is the director, Sastrawan Kamto is the president commissioner and Muhamad Narendra, K.K. is the commissioner of CDI.
    CDI has been in the business of supplying defense equipment business since 2020. Further, on 25 February 2021, CDI signed a cooperation agreement ("CDI-DukcapilAgreement") with the Directorate General of Population and Civil Registration under the Ministry of Home Affairs of Indonesia ("Dukcapil") as the provider of a joint platform ("Platform Bersama" or "PB") to facilitate Dukcapil in granting the access right over the identification number (nomor induk kependudukan, "NIK") and face photo data ("Biometrics Data") to users ("Platform Bersama Business"). This CDI-Dukcapil Agreement is valid for one year and renewable by mutual consent. CDI shall be making submissions for renewal in January 2022 which it expects approval not to be withheld.
  3. As at the date of this announcement, the shareholders and directors of CDI are unrelated to the Group's directors, substantial shareholders and their associates.
  4. Based on the adjusted latest unaudited financial statements of CDI for the nine months ended 30 September 2021 ("9M2021"), CDI recorded a profit of IDR 7.6 billion (equivalent to approximately S$722,000) for 9M2021 and has a net asset value of IDR 21.9 billion (equivalent to approximately S$2,080,000) as at 30 September 2021.
  1. Based on the MAS exchange rate of US$1.00:S$1.3658 as at 10 December 2021.
  2. Based on the MAS exchange rate of IDR100.00:S$0.009499 as at 10 December 2021.

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3. RATIONALE FOR THE CDI INVESTMENT

  1. Buoyed by trends in digitalization and COVID-19 driven need for identity verification solutions, the Indonesian market in 2021 has seen considerable interest in identity management solutions by corporations and end users.
  2. PT International Biometrics Indonesia ("IBI"), a 51%-owned operating subsidiary of the Group in Indonesia, was a relatively early player in the Indonesian biometrics market and now has an entrenched position in serving government bodies and departments as well as medium and large corporations. Generally, these corporations will want to tap on IBI's leading biometrics technologies and established working protocols with the government to develop holistic identity management solutions. Understandably, such solutions are generally larger, time consuming and relatively costly.
  3. In the last one to two years, more small and medium enterprises ("SMEs") are moving forward to explore the potential of adopting identity management solutions into their client serving processes and have approached the government, which holds the key to sensitive biometrics data, for a workable cooperation model between the private sector and the government. However, the SMEs generally yearn for low cost and easy to implement identity management solutions as their budget and resources are limited. In response to such interest and considerations, the Indonesian government, or more specifically, Dukcapil, have come around that a feasible way forward is to tap on private sector partners such as CDI to establish Platform Bersama to serve the needs of these SMEs. In essence, CDI will act as a conduit between Dukcapil and the end customers by developing e-KYC solutions for end customers that can access and apply encrypted Biometrics Data. In one swoop, this Platform Bersama approach allows many SMEs to jump onto the identity management space without incurring significant costs and time. CDI secured the Platform Bersama license on the strength of its proposal to Dukcapil against other contenders.
  1. This is a significant development for the identity management industry in Indonesia because behind these SMEs are a huge swath of the Indonesian population who are only starting to adopt biometric authentication as a way of life. By lowering the time to market and costs, this Platform Bersama approach can be expected to drive broader and faster adoption of identity management solutions throughout Indonesian enterprises and individuals and greatly boost the vibrance of the Indonesian biometrics ecosystem.
  2. After signing the Platform Bersama license with Dukcapil, CDI has been considering various strategies to commercialize this opportunity. After considering several roll-out strategies and several months of discussions with the Group, CDI has decided to partner Totm as its core technology partner in effecting Platform Bersama as follows:
    1. Under the Convertible Loan Agreement, Totm shall invest US$3.75 million in the form of a convertible loan to CDI to help support CDI in its Platform Bersama venture. More details of the Convertible Loan Agreement are set out in paragraph 4 (Material terms of the Convertible Loan Agreement); and
    2. Under the Cooperation Agreement, CDI shall exclusively utilize IBI's products and services to service its customers under Platform Bersama, and share 60% of its biometric revenues with IBI. This Cooperation Agreement is valid for five (5) years and extendable by mutual consent for another five (5) years.
  4. From a strategic perspective, the abovementioned partnership will be beneficial for Totm for the following key reasons:
    1. Whilst through IBI, the Group already has access to government entities and large and medium corporations' customer markets, this partnership will immediately grant the Group access to SMEs' customer markets;
    2. The agreed mode of cooperation also means that IBI will take a leadership role in delivering identity management solutions to CDI's customers and hence greatly broaden the usage level and market recognition for the Group's products and services in the Indonesian

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biometrics marketplace. This potentially includes biometrics solutions such as BioCheck, BioCode and BioWatch offered by IBI as well as passive liveness e-KYC solutions offered by GenesisPro Pte Ltd ("GenesisPro"), a 70%-owned subsidiary of the Company; and

  1. The development of an active biometrics ecosystem in Indonesia encompassing government entities, small, medium and large corporations (and the individual users behind them) all partaking in the usage of identity management solutions can only benefit Totm which has interests in seeing identity management solutions becoming an entrenched way of life in Indonesia.

3.7 In the short to medium term, the Group expects that this partnership could potentially drive revenues throughout the Group, including for IBI and GenesisPro, as well as help spread the Group's costs over a wider base of customers.

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MATERIAL TERMS OF THE CONVERTIBLE LOAN AGREEMENT

Principal amount

:

US$3,750,000 (equivalent to approximately S$5,122,000).

The Convertible Loan Amount will be funded from the

Company's internal resources. This is in line with the use of net

proceeds arising from the Company's placement announced on

11 May 2021 and completed on 25 June 2021.

Status

of

the

:

The Convertible Loan constitutes direct, unconditional,

Convertible Loan

unsubordinated and unsecured obligations of CDI, rank pari

passu and rateably without any preference among themselves,

and, subject as mentioned in the Convertible Loan Agreement

and save as otherwise provided under Applicable Laws or

regulations, equally with all other unsecured obligations (other

than subordinated obligations, if any) of CDI from time to time

outstanding.

Interest

:

The Convertible Loan shall bear an interest as of the date of the

drawdown at the rate of 7.0% per annum against the Convertible

Loan Amount (the "Interest").

The Interest shall be waived by the Company in the event the

Convertible Loan is converted in accordance with the

Convertible Loan Agreement.

Purpose

:

The cash proceeds received by CDI from the Convertible Loan

shall only be used solely for CDI's working capital requirements

in accordance with CDI's budget and business plan as approved

by the Company and for no other purpose.

For the avoidance of doubt, it is envisaged for the cash proceeds

to be used for the Platform Bersama Business and CDI shall not

use the proceeds for investments in other companies, joint

ventures or for the purchase of stock, bonds and, shares

whether or not on the capital market, and/or any usage that is

not in ordinary course of business of CDI, without prior written

approval of the Company.

Maturity date

:

The date falling 2.5 years from the date of drawdown (or any

extension thereof as may be determined by the Company at its

sole discretion), and if such date does not fall on a Business Day

(as defined in the Convertible Loan Agreement), the Maturity

Date shall instead fall on the next succeeding Business Day.

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Conditions

to

:

The disbursement of the Convertible Loan Amount is subject to:

drawdown

(a)

having retrieved any required corporate approval of CDI,

which is held in accordance with the articles of association

and the Applicable Laws (as defined in the Convertible Loan

Agreement) (i) approving the receipt of the Convertible Loan

pursuant to the terms and conditions of the Convertible Loan

Agreement; and (ii) authorising the execution, delivery, and

performance by CDI of the Convertible Loan Agreement and

the transaction contemplated herein, including but not

limited to the conversion of the Convertible Loan and the

issuance and delivery of the new ordinary shares of CDI to

the Company on the conversion event (the "Conversion

Shares");

(b)

any other approvals or clearances required by CDI (e.g.,

from suppliers / customers / partners) to enter into and

execute the Convertible Loan Agreement;

(c)

none of the Event of Default (as defined below) has

occurred;

(d)

the completion of the legal, tax and financial due diligence

subject to the satisfaction of the Company;

(e)

the signing of a cooperation agreement by CDI with IBI

which contains provisions on among others, but not limited

to (i) an exclusivity clause for CDI to use only the products

and/or services of IBI for digital biometric solution, unless

otherwise waived by IBI at its discretion; and (ii) contract

duration of at least five (5) years, extendable to additional

five (5) years upon review of the contracting parties; and

(f)

approvals or clearance needed from the sponsor / relevant

regulatory parties / shareholders and/or board of the

Company, as required by the Company to disburse the

Convertible Loan.

Event of default

:

Events of default shall include the following (the "Events of

Default"):

(a)

CDI's liquidation, winding up, dissolution or execution on the

company's assets or properties, schemes of arrangement

for the benefit of creditors, insolvency, bankruptcy, being

unable to pay its debts as they fall due, appointment of a

receiver and/or administrator and/or liquidator or their

equivalents, securities become unenforceable; and

(b)

CDI ceasing or threatened to cease to carry on its principal

business; or

(c)

breach of representations and warranties, undertakings and

conditions of the Convertible Loan Agreement, and if such

breach is capable of remedy, it is not so remedied within 14

(fourteen) days after notice of such breach has been given

by the Company to CDI.

Repayment

:

If

the Convertible Loan is not converted pursuant to the

Convertible Loan Agreement by the Maturity Date, the Company

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may elect, at any time prior to Maturity Date, to require CDI to

repay the Convertible Loan together with any outstanding and

accrued Interest by giving the Repayment Notice (as defined in

the Convertible Loan Agreement) to CDI.

Subject to the repayment of the Convertible Loan as provided in

the Convertible Loan Agreement, prior to the Maturity Date, the

Company shall be entitled to the repayment of the Convertible

Loan and any accrued but unpaid Interest, upon an Event of

Default.

Prepayment

:

CDI shall not be entitled to prepay the Convertible Loan Amount

prior to the Maturity Date, and the Convertible Loan Amount

shall remain outstanding except where converted pursuant to

and in accordance with the Convertible Loan Agreement, or

except where the Company expressly consents or elects in

writing to such pre-payment.

Conversion right

:

At any time prior to the Maturity Date, the Company reserves the

right to convert the Convertible Loan Amount in whole into the

Conversion Shares. Notwithstanding and subject to the

aforesaid, the Convertible Loan Amount may also be converted

due to the following events:

(a)

in the event that CDI completes an initial public offering (an

"IPO"), the Convertible Loan Amount thereon shall

automatically convert upon the closing of the IPO into

ordinary shares of CDI at the Conversion Price (as defined

below);

(b)

if CDI consummates a change of Control3 transaction prior

to the Maturity Date, the Company may elect to convert the

Convertible Loan Amount as of the anticipated closing date

of such change of Control event into Conversion Shares at

the Conversion Price; and

(c)

subject to the conversion not being exercised until the

Maturity Date, the Company may, on the Maturity Date,

convert the Convertible Loan Amount into Conversion

Shares at the Conversion Price.

Based on the pre-money valuation of US$50.0 million ("Pre-

Money Valuation") and the current share capital of CDI, the

Company will hold approximately 7.0% of CDI's share capital

post conversion of the Convertible Loan Amount.

Conversion price

:

The

conversion price for the Conversion Shares shall be

equivalent to the Convertible Loan Amount divided by the Pre-

Money Valuation (the "Conversion Price").

Conversion

:

Conversion of the Convertible Loan into Conversion Shares is

conditions

conditional upon the following being fulfilled to the satisfaction of

the Company:

(a)

the conversion of the Convertible Loan into Conversion

Shares not being prohibited by any law, order, rule,

3 Control means the power to direct the management or policies of any person, whether through the ownership of over 50.0% of the voting power of such person, through the power to appoint more than half of the board of directors or similar governing body of such entity, through contractual arrangements or otherwise.

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Totm Technologies Ltd. published this content on 13 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 December 2021 15:45:10 UTC.