Placements::Proposed Placement of 500,000,000 New Ordinary Shares in the Capital of the Company

PROPOSED PLACEMENT OF 500,000,000 NEW ORDINARY SHARES IN THE SHARE

CAPITAL OF THE COMPANY

1. INTRODUCTION

1. The Board of Directors (the "Board" or the "Directors") of China Star Food Group Limited (the "Company" and together with its subsidiaries, the "Group") wishes to announce that the Company had, on 21 September 2021, entered into subscription agreements (each a
   "Subscription Agreement", and collectively the "Subscription Agreements") with each of the subscribers set out in Paragraph 2.2 of this announcement (the "Subscribers").
2. Subject to and upon the terms of the respective Subscription Agreements, the Subscribers have agreed to subscribe and pay for, and the Company will allot and issue to the Subscribers, an aggregate of 500,000,000 new ordinary shares in the share capital of the Company (each a "Subscription Share", and collectively the "Subscription Shares") at an issue price of S$0.024 (the "Issue Price") for each Subscription Share, amounting to an aggregate sum of S$12,000,000 (the "Subscription Consideration") (the "Proposed Placement").

2. DETAILS OF THE PROPOSED PLACEMENT

1. The Issue Price
   The Issue Price of S$0.024 is equivalent to the volume weighted average price of S$0.024 per share of the Company ("Share") based on trades done on the Singapore Exchange Securities Trading Limited (the "SGX-ST") on 21 September 2021, being the last full market day on which the Shares were traded preceding the date and up to the time the Subscription Agreements were signed.
2. Details of the Subscribers and their respective subscriptions

2.2.1 Shareholders of the Company ("Shareholders") should note that information relating to the Subscribers in this paragraph and elsewhere in this announcement were provided by the Subscribers. The Company and the Directors have not independently verified the accuracy and correctness of such information herein.

1

2.2.2 The details of the Subscribers and their respective subscription of the Subscription Shares are as follows:

Name of	Number of		Number of		Shareholding		Shareholding		Subscription
Subscriber	existing		Subscription		prior to the		(including the		consideration
	Shares held		Shares		completion of		number of		payable (S$)
			subscribed		the Proposed		Subscription
					Placement		Shares
					("Completion		subscribed
					") as a		for) as a
					percentage of		percentage of
					the existing		enlarged
					issued share		issued share
					capital of the		capital of the
					Company(1)		Company
							after
							Completion(2)
Liang	160,566,000		60,000,000		18.17		15.94		1,440,000
Chengwang
Duanmu	30,000,000		20,000,000		3.39		3.61		480,000
Xiaoyi
PTS Capital	105,966,700		100,000,000		11.99		14.88		2,400,000
Pte. Ltd.(3)
An Junwei	-	60,000,000		-	4.34		1,440,000
Liu Xiaohua	3,462,100		60,000,000		0.39		4.59		1,440,000
Luo Fangfen	12,733,075		50,000,000		1.44		4.53		1,200,000
Liu Nailin	18,900,900		50,000,000		2.14		4.98		1,200,000
Liang Wenshu	22,965,600		24,000,000		2.60		3.39		576,000
Yang Qibin	40,000,000		20,000,000		4.53		4.34		480,000
Xue Xiaohua	-	20,000,000		-	1.45		480,000
Pan Ruliang	4,000,000		16,000,000		0.45		1.45		384,000
Liu Jing	254,400		10,000,000		0.03		0.74		240,000
Chen Yu	-	10,000,000		-	0.72		240,000
	Total	500,000,000		45.13		64.96		12,000,000

Notes:

1. Based on the number of Subscription Shares divided by the existing issued and paid-up share capital of the Company of 883,818,100 fully paid-up ordinary shares immediately before the Proposed Placement, rounded to the nearest two decimal places.
2. Based on the number of Subscription Shares divided by the enlarged issued and paid-up share capital of the Company of 1,383,818,100 fully paid-up ordinary shares immediately after the Proposed Placement, rounded to the nearest two decimal places.
3. As Ms Yu Lei owns more than 20% of the voting rights in PTS Capital Pte. Ltd., Ms Yu Lei is deemed to have an interest in the ordinary shares of the Company that are owned by PTS Capital Pte. Ltd.

2

2.2.3 Further information on the Subscribers is set out below:

	Name of		Background of the Subscriber and the rationale for their
	Subscriber		respective subscription
	Liang		Mr Liang Chengwang ("Mr Liang") is an existing controlling Shareholder,
		as well as the Executive Chairman and Chief Executive Officer of the
	Chengwang
		Company.
	Duanmu		Ms Duanmu Xiaoyi ("Ms Duanmu") is an existing substantial Shareholder
	Xiaoyi		and an Executive Director of the Company.
			PTS Capital Pte. Ltd. is an investment holding company in Singapore and
	PTS Capital		an existing substantial Shareholder. Ms Yu Lei is a shareholder of PTS
	Pte. Ltd.		Capital Pte. Ltd. and owns more than 20% of the voting rights in PTS
			Capital Pte. Ltd.
	An Junwei		Mr An Junwei was an existing shareholder of the Company and is a private
		investor.
	Liu Xiaohua		Ms Liu Xiaohua is an existing shareholder of the Company and is a private
		investor.
			Mr Luo Fangfen is an existing shareholder of the Company and is a
	Luo Fangfen		businessman with business interests in the People's Republic of China (the
			"PRC").
	Liu Nailin		Mr Liu Nailin is an existing shareholder of the Company and is a
		businessman with business interests in the PRC.
	Liang Wenshu		Mr Liang Wenshu is an existing shareholder of the Company and is a
		businessman with business interests in the PRC.
	Yang Qibin		Mr Yang Qibin is an existing shareholder of the Company and is a
		businessman with business interests in the PRC.
	Xue Xiaohua		Mr Xue Xiaohua was an existing shareholder of the Company and is a
		private investor.
	Pan Ruliang		Mr Pan Ruliang is an existing shareholder of the Company and is a private
		investor.
	Liu Jing		Ms Liu Jing is an existing shareholder of the Company and is a private
		investor.
	Chen Yu		Ms Chen Yu was an existing shareholder of the Company and is a private
		investor.

2.2.4 PTS Capital Pte. Ltd., Mr Luo Fangfen, Mr Liu Nailin, Mr Yang Qibin, Mr Liang Wenshu and Mr. Pan Ruliang are existing Shareholders, were first introduced to the Company through the business contacts and connections of Mr Liang, and were subsequently approached by Mr Liang about the Proposed Placement. In addition, the Company was

3

introduced to Mr An Junwei, Ms Liu Xiaohua (an existing shareholder), Mr Xue Xiaohua, Ms Liu Jing (an existing shareholder) and Ms Chenyu through the business contacts and connections of Mr Liang and Ms Duanmu, who were subsequently approached by Mr Liang and Ms Duanmu about the Proposed Placement. The Subscribers had expressed an interest to invest in the Company through the Proposed Placement for their own respective financial investment purposes.

1. Save as disclosed in Paragraphs 2.2.3 and 2.2.4, the Subscribers currently do not have any connections or relationships (including business relationships) with the Group, any of the Directors and/or substantial shareholders of the Company.
2. The Subscribers have each represented and warranted to the Company, inter alia, that:
3. 1. each of them is independent of, and not acting in concert (as defined in The Singapore Code on Take-overs and Mergers) with any other party to obtain or consolidate effective control in the Company through the subscription of the Subscription Shares;
   2. each of them (save for Mr Liang, Ms Duanmu and PTS Capital Pte. Ltd.) is not a Director or a substantial shareholder of the Company, an interested person as defined in Chapter 9 of the SGX-ST Listing Manual Section B: Rules of Catalist
      (the "Catalist Rules") or any other person in the categories set out in Rule 812(1) of the Catalist Rules (as the case may be); and
   3. each of them is subscribing for the Subscription Shares solely for the purposes of investment and solely for their own benefit and as principal (and not as an underwriter or a placement agent or a nominee or a trustee for any person) and has not entered into any arrangement or agreement to sell or otherwise dispose of any of the Subscription Shares to any person.

1. Payment of the consideration by the respective Subscribers
   The Subscribers will be paying for their respective Subscription Shares fully by way of cash.
2. The Subscription Shares

1. Following Completion, the Company's issued share capital will increase from 883,818,100 Shares as at the date of this announcement to 1,383,818,100 Shares. The Subscription Shares represent approximately 56.57% (rounded to two decimal places) of the existing issued share capital of the Company comprising 883,818,100 Shares as at the date of this announcement and will represent approximately 36.13% (rounded to two decimal places) of the enlarged issued share capital of the Company of 1,383,818,100 Shares, based on the assumption that there will be no changes to the number of Shares (excluding treasury shares and subsidiary holdings) before Completion. The Company does not hold any treasury Shares.
2. The Subscription Shares, when issued and delivered, will be free from all pre-emption rights, charges, liens and other encumbrances and with all rights and benefits attaching thereto and shall rank pari passu in all respects with the Shares existing as at the date of the issuance of the Subscription Shares save for dividends, rights, allotments or other

4

distributions, the record date of which falls on or before the date of allotment and issuance of the Subscription Shares.

2.4.3 The Proposed Placement will not result in a transfer of controlling interest of the Company within the definition of Rule 803 of the Catalist Rules and there are no share borrowing arrangements for the Proposed Placement. The Proposed Placement is not expected to give rise to any material conflicts of interest.

1. Additional Listing Confirmation
   The Company will be making an application, through its continuing sponsor, Novus Corporate Finance Pte. Ltd., to the SGX-ST for the listing of and quotation of the Subscription Shares on the Catalist Board of the SGX-ST. The Company will make the necessary announcements in due course upon obtaining the listing and quotation notice in respect of all of the Subscription Shares from SGX-ST.
2. No payment of introducer fee or placement commission
   No introducer fee or placement commission has been paid or will be payable by the Company in connection with the Proposed Placement and no placement agent has been appointed for the Proposed Placement.
3. Exemption from the prospectus requirement
   The offer and allotment and issuance of the Subscription Shares is made pursuant to the exemption under Section 272B of the Securities and Futures Act, Chapter 289 of Singapore. As such, no prospectus or offer information statement will be issued by the Company in connection with the Proposed Subscription.

3. SHAREHOLDERS' APPROVAL FOR THE ISSUANCE OF THE PLACEMENT SHARES

1. The Company will not be relying on its existing general share issue mandate approved by Shareholders by way of an ordinary resolution ("General Mandate") at the annual general meeting of the Company held on 31 August 2021.
2. The Company will be seeking specific Shareholder's approval (as detailed below) in relation to the allotment and issuance of the Placement Shares at an extraordinary general meeting of the Company ("EGM") to be convened.
3. Approval under Chapter 8 of the Catalist Rules

3.3.1 Rule 804 of the Catalist Rules provides that:

"Except in the case of an issue made on a pro rata basis to shareholders or a scheme referred to in Part VIII of this Chapter, no director of an issuer, or associate of the director, may participate directly or indirectly in an issue of equity securities or convertible securities unless shareholders in general meeting have approved the specific allotment. Such directors and associates must abstain from exercising any voting rights on the matter. The notice of meeting must state:

1. the number of securities to be allotted to each director and associate;

5