General Announcement::PROPOSED ISSUE OF WARRANTS

HONG LAI HUAT GROUP LIMITED

(Incorporated in Singapore)

(Company Registration No.: 199905292D)

PROPOSED ISSUE OF WARRANTS

1. Introduction

1. The Board of Directors ("Directors") of Hong Lai Huat Group Limited (the "Company" and together with its subsidiaries, the "Group") wishes to announce that the Company has on 26 November 2021 entered into a warrant issuance agreement with Soochow CSSD Capital Markets (Asia) Pte. Ltd. ("SCCM") (the "Warrant Issuance Agreement") whereby in consideration of the payment of S$800 by SCCM, the Company will, subject to the terms and conditions of the Warrant Issuance Agreement, Deed Poll (as defined herein) and Conditions (as defined herein), issue to SCCM 80 million non-listed and transferable warrants ("Warrants") exercisable within two years from the date of issue of the Warrants ("Exercise Period"), with each Warrant carrying the right to subscribe for one (1) new ordinary share in the Company ("Shares") at the following exercise prices ("Exercise Prices"): S$0.30 per Share for the first 20 million Warrants, S$0.35 per Share for the next 20 million Warrants, S$0.40 per Share for the next 20 million Warrants and S$0.45 per Share for the last 20 million Warrants (the
   "Proposed Issuance").
2. The Company has engaged SCCM to act as its corporate finance advisor to provide primarily general corporate finance advisory services to the Company with the view to assisting the Company with engaging with institutional investors (the "Engagement").
3. The Exercise Prices of S$0.30, S$0.35, S$0.40 and S$0.45 represent premia of approximately 216%, 268%, 321%, 374% respectively to the volume weighted average price of S$0.095 for trades done on the Singapore Exchange Securities Trading Limited ("SGX-ST") for the full market day on 26 November 2021 (which is the date of the Warrant Issuance Agreement).

2. Conditions Precedent

1. The obligation of the Company to issue the Warrants shall be conditional upon all the following conditions precedent ("Conditions Precedent") having been satisfied:
2. 1. the receipt by the Company of the approval-in-principle of the SGX-ST for the listing and quotation of new Shares to be issued arising from the exercise of the Warrants ("Warrant Shares") on the Main Board of the SGX-ST and where such approval-in- principle is subject to conditions, the fulfilment of all such conditions, and such approval- in-principle not having been withdrawn, revoked or amended by the SGX-ST as at the date of completion of the issuance of the Warrants ("Completion Date");
   2. the issue of the Warrants not being prohibited by any statute, order, rule or regulation promulgated or issued after the date of the Warrant Issuance Agreement by any applicable legislative, executive or regulatory body or authority of Singapore; and
   3. the representations, warranties, confirmations and undertakings made by the Company and SCCM in the Warrant Issuance Agreement shall be true, accurate, complete and not misleading with respect to the subject covered therein when made, and shall be true, accurate, complete and not misleading as at the Completion Date.
3. If any of the Conditions Precedent is not satisfied by 5.00 p.m. on a date falling sixty (60) days from the date of the Warrant Issuance Agreement or such other date as may be mutually agreed by the Company and SCCM in writing, the Warrant Issuance Agreement shall automatically

terminate with immediate effect and the Company and SCCM shall be released and discharged from their respective obligations under the Warrant Issuance Agreement.

2.3 The Company will be submitting an application to the SGX-ST for the listing and quotation of the Warrant Shares on the Main Board of the SGX-ST. The Company will make an announcement when the approval-in-principle for such application is obtained from the SGX- ST.

3. Principal terms of the Warrants

3.1 The principal terms of the Warrants are summarised below:

Constitution of the	The Warrants will be constituted by a deed poll to be executed by the
warrants	Company ("Deed Poll") and are subject to the terms and conditions
	as set out in the Deed Poll including its schedules (the "Conditions").
Issue size	80 million Warrants. The Warrants will be issued in four (4) series
	comprising 20 million Warrants per series.
Form of warrants	The Warrants will be issued in registered form.
and subscription
rights	Each Warrant will carry the right to subscribe for one (1) Warrant
	Share at the Exercise Price at any time during the Exercise Period in
	accordance with the terms and conditions of the Warrants.
	The Warrants shall be exercisable in multiple tranches, in whole or in
	part, at any time during the Exercise Period. Warrants remaining
	unexercised at the expiry of the Exercise Period shall lapse and
	cease to be valid for any purpose.
Subscription Price	S$800 in aggregate.
Exercise Price	Subject to listing rules of the SGX-ST and any adjustment in
	accordance with the Conditions and the Floor Price (as referred to
	below), such Floor Price to be maintained always, regardless of any
	adjustment under the Conditions, in respect of each Warrant, the
	Exercise Price of each series shall be as follows:
	(i)	The Exercise Price for the first series of 20 million Warrants
		shall be S$0.30;
	(ii)	The Exercise Price for the next series of 20 million Warrants
		shall be S$0.35;
	(iii)	The Exercise Price for the next series of 20 million Warrants
		shall be S$0.40; and
	(iv)	The Exercise Price for the last series of 20 million Warrants
		shall be S$0.45.
Floor Price	Any adjustment to the Exercise Price under the Conditions shall be
	subject to a floor price of S$0.095, which is the weighted average
	price for trades done on the SGX-ST for the full market day on the
	date of the Warrant Issuance Agreement.
Exercise Period	Subject to the Conditions, the Warrants may be exercised at any time
	during the period of 2 years, commencing on and including the date
	of issue of the Warrants ("Issue Date") and expiring at 5:00 p.m.
	(Singapore time) on the date immediately preceding 2 years from the

	Issue Date, unless such date is a date on which the Register of
	Members and/or the Warrant Register is closed or is not a day on
	which the SGX-ST is open for securities trading ("Market Day"), in
	which event, the exercise period shall end on the date prior to the
	closure of the Register of Members and/or the Warrant Register or
	the immediate preceding Market Day, as the case may be, but
	excluding such period(s) during which the Warrant Register may be
	closed pursuant to the terms and conditions of the Warrants as set
	out in the Deed Poll.
Listing status and	The Warrants will not be listed and traded on the SGX-ST and shall
transferability	be transferable subject to the Conditions.
Status of Warrant	The Warrant Shares shall rank pari passu in all respects with and
Shares	carry all rights similar to existing Shares, except that they will not rank
	for any dividend, right, allotment or other distributions, the record date
	of which falls before the date of exercise of the Warrants.
Termination	In the event that SCCM or the Company terminates the Engagement
	by issuing a sixty (60) days written notice for a non-performance
	reason prior to the expiry of the period of twelve months commencing
	from the date of the letter of Engagement:
	(a)	if	the market price of the ordinary shares		of the Company
		("Shares") (the "Market Price") has not reached S$0.30 per
		Share (as may be adjusted in accordance with the Conditions)
		(the "First Exercise Price") in the period up to the effective date
		of such termination (the "Relevant Period"), the Warrants shall
		lapse and cease to be valid on the effective date of such
		termination without any liability or costs to be incurred on the
		Company end; and
	(b)	if the Market Price has reached the First Exercise Price in the
		Relevant Period, the Warrants shall continue to be exercisable
		for a period of two years which is calculated from the Issue Date
		and shall lapse and cease to be valid thereafter.
Adjustments	The Exercise Prices and the number of Warrants will be subject to
	adjustments under certain circumstances prescribed in the
	Conditions. Such circumstances include capitalisation issues, certain
	capital distributions, rights issues and any consolidation, subdivision,
	bonus issue, reclassification or conversion of Shares.
	The specific adjustment formulae are set out in Condition 5.2 of the
	Conditions, as follows:
	5.2.1	If and whenever the Company shall make any issue of
			Shares to its Shareholders credited as fully paid, by way of
			capitalisation of profits or reserves (whether of a capital or
			income nature and including any capital redemption reserve
			fund, other than an issue of Shares to Shareholders who
			elect to receive Shares in lieu of cash or other dividend) the
			Exercise Price and the number of Warrants held by each
			Warrantholder shall be adjusted in the following manner:
			New Exercise Price =	A		× P
			A+B
			Adjusted number of Warrants =		A+B	× W
							A

where:

A = the aggregate number of issued and fully paid-up Shares immediately before such capitalisation issue;

B = the aggregate number of Shares to be issued pursuant to any allotment to Shareholders credited as fully paid by way of capitalisation of profits or reserves (including any capital redemption reserve fund other than an issue of Shares to Shareholders who elect to receive Shares in lieu of cash or other dividend);

P = existing Exercise Price; and

W = existing number of Warrants held (as may be adjusted from time to time in accordance with these Conditions).

Such adjustments will be effective (if appropriate, retroactively) from the commencement of the Market Day next following the record date for such issue.

For the purpose of this Condition 5, "record date" in relation to the relevant event means the date as at the close of business on which Shareholders must be registered as such to participate therein.

5.2.2 If and whenever:

1. the Company shall make a Capital Distribution (as defined below) to Shareholders whether on a reduction of capital or otherwise (but excluding any cancellation of capital which is lost or unrepresented by available assets); or
2. the Company shall make any offer or invitation to its Shareholders whereunder they may acquire or subscribe for Shares by way of rights or issue or grant to the Shareholders as a class by way of rights, options, warrants or other rights to subscribe for or purchase or otherwise acquire any Shares,
   then the Exercise Price shall be adjusted in the following manner:

New Exercise Price = C−CD × P

and in respect of each case referred to in Condition 5.2.2(b) above, the number of Warrants held by each Warrantholder shall be adjusted in the following manner:

Adjusted number of Warrants = C−CD × W

where:

C = the average of the Last Dealt Prices for the five (5) consecutive Market Days immediately before the date on which the Capital Distribution (as defined below), or any offer or invitation referred to in Condition 5.2.2(b) above, as the case may be, is publicly announced or (failing any such

announcement), immediately preceding the date of the Capital Distribution (as defined below) or, as the case may be, of the offer or invitation;

D = (i) in the case of an offer or invitation to acquire or subscribe for Shares by way of rights under Condition 5.2.2(b) above, the value of the rights attributable to one (1) Share (as defined below); or (ii) in the case of any other event falling within Condition 5.2.2 above, the fair market value, as determined by an Approved Bank (with the concurrence of the Auditors) in accordance with Condition 5.12, of that portion of the Capital Distribution (as defined below) attributable to that one (1) Share or of the nil paid rights attributable to one

(1) Share;

P = as in P above; and

W = as in W above.

For the purpose of definition (i) of "D" above, the "value of the rights attributable to one

1. Share" shall be calculated in accordance with the following formula:

C − E

F + 1

where:

C = as in C above;

E = the subscription price for one additional Share under the offer or invitation to acquire or subscribe for Shares by way of rights; and

F = the number of Shares which it is necessary to hold in order to be offered or invited to acquire or