VERTEX TECHNOLOGY ACQUISTION CORPORATION LTD(Incorporated as an exempted company in the Cayman Islands)(Company Registration No. 378671)

PROPOSED BUSINESS COMBINATION OF VERTEX TECHNOLOGY ACQUISITION CORPORATION
LTD WITH 17LIVE INC.

1.

INTRODUCTION
The board of directors (the "Board" or "Directors") of Vertex Technology Acquisition Corporation
Ltd (the "Company") is pleased to announce that the Company had, on 2 October 2023, enteredinto a proposed business combination by way of a conditional sale and purchase agreement (the"SPA") with 17LIVE Holding Limited (the "Vendor"), 17LIVE Inc. (the "Target Company"), Mr. Lien
Chien-Lin, Mr. Ng Jing Shen and Mr. Kenta Masuda (the "Management Warrantors") and Mr.
Phua Jiexian Joseph (the "Founder", and together with the Management Warrantors, the"Warrantors") (the Company, the Vendor, the Warrantors and the Target Company hereinafterreferred to as each a "Party" and collectively, the "Parties"). Under the proposed businesscombination, the Company will acquire the entire issued and paid-up share capital of the Target
Company from the Vendor (the "Proposed Business Combination").
The Target Company, formerly known as M17 Entertainment Limited, was incorporated pursuant
to the Cayman Companies Act as a Cayman Islands exempted company with limited liability on 28
February 2017. Further details on the Target Company are set out in paragraph 2.1 of thisannouncement below.

1.1.

The Proposed Business Combination
The following section highlights the key commercial terms of the Proposed Business Combination
which were negotiated on an arm's length basis among the Parties. In designing these commercial
terms, careful attention was devoted to safeguarding the interest and aligning the incentives of four
sets of stakeholders involved in this transaction, ensuring a mutually beneficial arrangement. These
stakeholders are: (a) Non-Redeeming Shareholders (as defined in paragraph 1.4 below), (b) PIPE
Investors (as defined in paragraph 1.3 below), (c) shareholders of the Vendor (the "Vendor
Shareholders"), and (d) Key Executives (as defined in paragraph 1.2 below).
•

The Non-Redeeming Shareholders of the Company and the PIPE Investors will benefit froma scheme to be known as the "Special Bonus Scheme" (the "Special Bonus Scheme"),pursuant to which the Non-Redeeming Shareholders will be allotted and issued 0.1 newshares in the Company for every existing share held at a specified redemption record dateprior to the completion of the Proposed Business Combination ("Completion"), and the PIPE
Investors will be allotted and issued 0.1 new shares in the Company for every sharesubscribed for pursuant to the PIPE Financing.

•

In addition, the commercial terms of the Proposed Business Combination contain deferredincentives such as Earnout Shares (as defined below) for the Earnout Shareholders (asdefined below) and an executive incentive scheme ("EIS") for the Key Executives, which aretied to the achievement of specific financial targets, including revenue and EBITDA. These
incentives are designed to motivate and encourage the Earnout Shareholders to retain their

1

shares, and the management of the Target Company to continue driving the performance of
the Target Company and focus on the profitability of the business following the Proposed
Business Combination.
•

To support the Special Bonus Scheme and the EIS and to minimise dilution to the othershareholders of the Company ("Shareholders") arising from these incentives, Vertex
Venture Holdings Ltd, the sponsor of the Company (the "Sponsor"), will waive its right toreceive a significant portion of the promote shares in the Company (the "Promote Shares")to be allotted and issued to Vertex Co-Investment Fund Pte. Ltd. ("Vertex SPV").

Pursuant to the SPA, the Company will acquire the entire issued and paid-up share capital of theTarget Company for the purchase consideration of S$925.1 million (equivalent to approximately
US$682.2 million1) (the "Purchase Consideration"), to be satisfied by:(a)

the allotment and issuance of up to 160,605,109 new shares in the Company("Consideration Shares") at the issue price of S$5.00 (the "Issue Price") to the Vendor (orif the Vendor so nominates, to the Vendor Shareholders) on Completion, amounting to
S$803.0 million (equivalent to approximately US$592.2 million); and(b)subject to the satisfaction of certain financial targets for earnout, the allotment and issuanceof up to 24,408,000 new shares in the Company ("Earnout Shares") to be allotted andissued at the Issue Price to each Vendor Shareholder that remains a record holder of sharesin the Company as at the applicable earnout record date (the "Earnout Shareholders") oneach of 30 April 2024 and 30 August 2024, as applicable (the "Earnout Vesting Date"),amounting to S$122.0 million (equivalent to approximately US$90.0 million).

The main objective of this earnout framework is to incentivise the Earnout Shareholders, being agroup of shareholders with a relatively substantial shareholding in the enlarged group of companies
comprising the Company and the Target Company as well as its subsidiaries (the "Target Group")
immediately following Completion (the "Enlarged Group"), to hold on to the Consideration Sharesthat they received at Completion and not dispose of the same, up to at the applicable earnout record
date. In addition, the earnout framework serves to incentivise the Enlarged Group to work towards
achieving key performance targets for revenue and profitability in the near term.
The value of the Purchase Consideration represents the agreed fair value of the Target Company
and was determined through arm’s length negotiations among the Parties with reference to theTarget Group’s most recent round of pre-listing investment, recent business development andperformance, as well as business prospects.
Based on the foregoing, the Proposed Business Combination will result in a reverse takeover of
the Company as defined under Chapter 10 of the Listing Manual of the Singapore Exchange
Securities Trading Limited ("SGX-ST") (the "Listing Manual"). Please see further details inparagraph 4 of this announcement below. In accordance with Chapter 10 of the Listing Manual, theProposed Business Combination will be subject to, amongst others, the approval of the
Shareholders at an extraordinary general meeting of the Shareholders ("EGM") to be convened
pursuant to Rule 1015 of the Listing Manual.
1.2.

Proposed Adoption of the EIS and the Proposed Allotment and Issuance of the EIS Shares
In connection with the Proposed Business Combination, and pursuant to the SPA, the Company

1 All SGD:USD currency conversions in this announcement are calculated based on an exchange rate of 1.356.

2

will adopt the EIS and allot and issue up to 2,550,000 new shares of the Company (the "EIS
Shares") at the Issue Price to certain entitled employees of the Target Company (the "KeyExecutives") on each of 30 April 2024, 30 April 2025 and 30 April 2026, as applicable (the "EIS
Vesting Date") subject to and based on certain financial targets achieved. The Company proposes
to seek Shareholders’ approval to adopt the EIS in connection with the Proposed Business
Combination. The purpose of adopting the EIS is to incentivise the Key Executives to achieve thekey performance targets by providing them with an opportunity to participate in the equity of theEnlarged Group so as to motivate them to greater dedication, loyalty and higher standards ofperformance, and to give recognition to their contributions and services.
1.3.

Proposed Allotment and Issuance of the PIPE Shares
In connection with the Proposed Business Combination, the Company will be raising funds frominstitutional and/or accredited investors (the "PIPE Investors") by way of private placement ("PIPE
Financing") following this announcement. The Company will make further announcements as andwhen there are material developments.

1.4.

Proposed Allotment and Issuance of the Special Bonus Shares
In connection with the Proposed Business Combination, the Company will allot and issue newshares in the Company (the "Special Bonus Shares") on the following basis:(a)

0.1 new shares at the Issue Price, to the existing Shareholders who hold shares in the
Company as at the record date for redemption (the "Non-Redeeming Shareholders") (otherthan the Sponsor), and(b)

0.1 new shares at the Issue Price, to the PIPE Investors for every share subscribed for by
the PIPE Investors in connection with the Proposed Business Combination.

The Special Bonus Shares will be allotted and issued at Completion. The Special Bonus Shares
will provide an incentive for the existing Shareholders of the Company to remain as Shareholders
and not opt to redeem their shares in the Company at or prior to the record date for the redemptionof all or a portion of their shares in the Company upon Completion. In addition, they will also provide
an incentive for PIPE Investors to participate in the PIPE Financing.
1.5.

Proposed Adoption of the Company ESOP and Proposed Allotment and Issuance of the
ESOP Shares
In connection with the Proposed Business Combination, the Company will also allot and issue newshares in the Company ("ESOP Shares") in accordance with a share incentive scheme to beestablished by the Company for the allotment and issuance of the ESOP Shares (the "Company
ESOP").
The abovementioned transactions mentioned in paragraphs 1.1 to 1.5 above, together with theproposed change of the Company’s name as well as the proposed adoption of a new set ofmemorandum and articles of association of the Company, will comprise the "Proposed
Transactions" and will be tabled for Shareholders’ approval at the EGM in a circular to bedispatched to Shareholders of the Company in due course (the "Circular").
To minimise dilution arising from the allotment and issuance of the EIS Shares under the EIS andthe Special Bonus Shares under the Special Bonus Scheme, the Sponsor will enter into a deed ofwaiver in favour of the Company, pursuant to which the Sponsor will waive its right to the allotment

3and issuance of a significant portion of the Promote Shares to be allotted and issued to Vertex
SPV. These waived Promote Shares will go towards the allotment and issuance of the EIS Sharesand the Special Bonus Shares.
2.

INFORMATION ON THE PROPOSED BUSINESS COMBINATION
The information on the Target Group and the Vendor was provided by the Target Company andthe Vendor. In respect of such information, the Company and the Directors have not independently
verified the accuracy and correctness of the same and the Company’s responsibility is limited tothe proper extraction and reproduction herein in the context that the information is being disclosed
in this announcement.

2.1.

Information on the Target Company
Overview of the Target Company
The Target Group (comprising the Target Company and its subsidiaries, the "Target Group") is atechnology-driven live social entertainment platform. The Target Group operates 17LIVE, which is
the top pure-play live streaming platform (by revenue) in Japan and Taiwan combined. It
commanded a market share by revenue of 20.8% in Japan in 2022 and a significant market shareby revenue of 26.9% in Taiwan in 2022, according to Frost & Sullivan2. 17LIVE is accessible
globally, and the Target Group’s key markets of operations include Japan and Taiwan with apresence in Hong Kong, Singapore, the U.S., the Philippines, India and Malaysia, as of 30 June
2023. 17LIVE is the Target Group’s flagship product launched in Taiwan in July 2015 and in Japanin August 2017.
The Target Group has fostered a diverse live streaming ecosystem with a loyal and engaged user
community and a deep talent pool of live streamers. 17LIVE connects users with live streamers
who generate content of interest through artificial intelligence ("AI")-powered personalised searchand recommendation. Livestreaming within 17LIVE enables users to interact and socialise in realtime with live streamers and show their support and appreciation to the live streamers by sending
virtual gifts, which results in successful monetisation for the live streamer. For 1H FY2023, theTarget Group had an average monthly active users ("MAU")3 of approximately 550,000 with anaverage daily view duration per daily active user of approximately 93 minutes and a Spend Rate4
of 16.1% on 17LIVE on a monthly average basis. As of 30 June 2023, the Target Group had enteredinto contracts with approximately 87,000 live streamers.
The Target Group has a scalable business model with sustainable growth and profitability. In
FY2022, the Target Group generated revenue of US$363.7 million. The Target Group’s
management has been focused on enhancing its profitability. The Target Group has achieved
positive EBITDA since 2020 and generated adjusted EBITDA of US$15.8 million in FY2022.

2 The report titled “Independent Market Research on the Media and Entertainment Industry with a Focus on theInteractive Video Streaming Platform, V-Liver, and Live Commerce Industries” dated 9 September 2023 prepared by
Frost & Sullivan for the Target Company
3 A user of the Target Group's platforms, identified by a unique ID, who has logged into 17LIVE at least once during
the specified month
4 Spenders as a percentage of MAU

4

Notes:(1) Average for 1H FY2023.
(2) As of 30 June 2023.

Content
Live streamers are at the core of the Target Group’s business. The Target Group has created an
end-to-end management system to develop and nurture its live streamers. The Target Group also
provides a full suite of powerful, easy-to-use interface and services, empowering its live streamers
to create high-quality and attractive content. The Target Group attaches great importance to thediversity and quality of the content on its platforms.
The Target Group’s content database encompasses a range of genres including music, games,
education, fashion, art, chatting, handcrafting, fortune telling, lifestyle and cooking. The Target
Group further differentiates itself with localised content as well as exclusive premium content. The
Target Group recognises that it is crucial to adopt localisation strategies to tailor to and satisfy
user’s cultural preferences and emotional needs in each region. The content created by the live
streamers on 17LIVE is carefully curated by local, on-the-ground and culturally sensitive operation
teams. The Target Group also leverages its strategic partnerships and collaborations with local
celebrities, politicians and athletes to produce insightful content which is exclusive to 17LIVE.
Furthermore, the Target Group produces original in-house shows featuring live streamers.

5Immersive online and offline experiences
To promote interaction on the platform, the Target Group regularly designs a variety of online
competitions and offline events with different themes throughout the year. The Target Group
provides event planning and marketing support for online competitions and provides anchoring,venue design, real-time offline performance and prizes for the offline grand finale. Through thesecompetitions and events, the Target Group gamifies the gift giving process to create more fun andexcitement between its live streamers and users, while providing both groups with an immersive
and real-life face-to-face entertainment experience. Online competitions create anticipation andlead to a strong sense of participation and achievement among the users, which boosts the hypeand drives the users to continue supporting the live streamers until the grand finale. The Target
Group’s online competitions give fans an opportunity to show their support to their favourite live
streamers and provide the winning live streamers with a variety of rewards, including theopportunities to participate in offline concerts, ceremonies or runway shows, appear in in-houseproduced programmes and brand collaborations, or promote their personal brands on billboards
and magazines.

6Technology
As a technology-driven live social entertainment platform, the Target Group has made extensive
investment to enhance its research and development ("R&D") capabilities and scalable technology
stacks in order to effectively innovate its product offerings and ensure content and data security.
The R&D team is able to promptly and effectively implement the Target Management’s businessinitiatives by providing the necessary technological infrastructure and functionality. The Target
Group also successfully integrated the Live2D, VRM3D and hand gesture recognition functions into
the broadcasting functionality, allowing its users to use their smartphones to upload an avatar andconduct virtual streaming and create an immersive experience for users with V-Livers5.
The Target Group’s data analytic capabilities take advantage of prodigious data generated by its
users to improve its services to users, including providing interest or location-based
recommendations for a personalised user experience. In addition, the Target Group has adedicated content monitoring team, called SkyEye, which is aided by proprietary AI-powered
content screening systems to monitor the contents posted by, and the behaviour of, live streamers
and users on its platforms.
Various monetisation channels
The Target Group generates revenues primarily from its live streaming businesses by selling virtual
points to its users, who in turn use these virtual points to purchase virtual gifts to show their support
and appreciation for their favourite live streamers and V-Livers, which results in successful
monetisation for the live streamers. The Target Group’s multi-channel monetisation model includes
virtual gifting and subscription to both live streamers and V-Livers, as well as sales of gameequipment and tools within the in-app games.
5

Virtual live streamer, or "V-Liver", a type of live streamer which comprises of computer-generated charactersdesigned to resemble real people

7Diversified growth drivers
The Target Group’s continued success stems from its ability to grow beyond a live streaming
platform. Since 2015 and with over eight years of operational know-how, the Target Group has built
a strong foundation of live streaming operations which serves as a base for new growth initiatives.
The Target Group’s user database and analytical capabilities allow it to generate user insights andintroduce new business initiatives that capture the mind share of its user base. To drive continued
engagement within this ecosystem, the Target Group has introduced innovative business initiatives
such as V-Liver, in-app games and live commerce, which are highly synergistic with its core live
streaming business and act as drivers for future sustainable growth of the Target Group’s business.
V-Livers
In 2018, the Target Group further expanded its streamer verticals by introducing V-Liver content on
17LIVE. V-Livers are a type of live streamer which comprises of computer-generated charactersdesigned to resemble real people. There are human actors behind the V-Livers, whose movements,
sounds and expressions are simultaneously reflected on the V-Livers by using motion capture
technology or software.
According to Frost & Sullivan6, the market size for virtual idol in Japan is expected to increase from
US$630.7 million in 2022 to US$3,864.8 million in 2027, representing a CAGR 7 of approximately
43.7%, presenting an attractive growth opportunity for the Target Group. Leveraging the Target
6 The report titled “Independent Market Research on the Media and Entertainment Industry with a Focus on theInteractive Video Streaming Platform, V-Liver, and Live Commerce Industries” dated 9 September 2023 prepared by
Frost & Sullivan for the Target Company
7 Compound Annual Growth Rate, i.e. annual growth rate over a specified period of time8Group’s existing knowledge and insights from its live streaming operations, the Target Group
creates innovative and creative V-Liver content through the expansion of organic V-Livers and thedevelopment of V-Liver proprietary IPs.
•

Organic V-Livers: With the Target Group’s strong brand recognition as the top pure-play live
streaming platform in Japan, the Target Group can attract a large untapped voice acting talentpool to become a V-Liver on its platforms. Also, the Target Group expects that there will be an
active conversion to V-Liver from the Target Group’s own large live streamer community. The
Target Group incubates V-Liver talent with its end-to-end talent management and help VLivers build follower base within the 17LIVE ecosystem. The Target Group leverages online
competitions and offline events to discover and foster V-Livers with high potential to become
V-Liver proprietary intellectual properties ("IPs").

•

V-Liver proprietary IPs: The Target Group is the first integrated platform combining V-Liveragency with its own live streaming ecosystem, thereby connecting proprietary V-Livers directlywith users. In July 2023, the Target Group created its first five V-Liver proprietary IP under thename BUSHILIVE. The Target Group draws traffic to its platforms through live streaming, andconcurrently tailors omnichannel marketing strategies to promote each of its proprietary VLivers. In addition, V-Liver proprietary IPs unlock new monetisation channels such as offline
merchandise sales and music production sales which enhances user engagement.

Following the implementation of the above initiatives of V-Liver development since the start of 2023,
the Target Group witnessed strong growth momentum in its V-Liver business in terms of its V-Livertalent pool, viewer base and engagement. The V-Liver and V-Liver fan community on 17LIVE hasapproximately 2,000 average V-Liver MAS and approximately 75,000 average V-Liver MAU in Q2
2023, representing a year-on-year ("YoY") increase by 6.5 times and 2.1 times, respectively. The
Target Group also demonstrated strong growth in V-Liver engagement, with an average ofapproximately 30,000 V-Liver spenders8 per month in Q2 FY2023, representing a YoY increase by
2.7 times.

8 A user of the Target Group's platforms, identified by a unique ID, who has spent virtual points on V-Livers

9Note:(1) Average MAS, MAU, and monthly spenders for 2Q 2023. Increase indicates YoY increase compared with 2Q 2022.

In-app Games
In-app games are one of the value-added services offered by the Target Group in order to further
engage users during live streaming. The Target Group offers both half-screen casual games thatusers can play while simultaneously watching live streams, and half-screen interactive games thatusers can play together with the live streamers. The in-app games target the same user base aslive streaming while enriching the overall live streaming user experience by offering continuous
engagement during live streaming.
Live Commerce
The Target Group provides infrastructure support and data insights for live commerce campaigns
carried out by top retailers and brands. Through partnerships with fast-moving consumer goods
brands to analyse consumer behaviour, the Target Group is able to identify suitable products thatsatisfy the shopping needs of the Target Group’s user base, and correspondingly invite theappropriate live streamers to promote such products, as well as attracting further traffic. Byleveraging the popularity and size of the Target Group’s readily available live streamers, livecommerce has successfully filled certain existing market gaps in Japan and Taiwan.

10Note:(1) Total addressable market for Live commerce relates to Japan and Taiwan, V-Liver relates to Japan, and Live streaming
relates to Japan, Taiwan and Southeast Asia.

2.2.

Information on the Vendor and the Vendor Shareholders

2.2.1. The Vendor
The Vendor was incorporated pursuant to the Cayman Companies Act as a Cayman Islands
exempted company with limited liability on 25 September 2023. The Vendor is a company limitedby shares with a share capital of US$50,000.00 divided into 5,000,000 ordinary shares of par value
US$0.01 each.
Pursuant to the SPA, upon completion of the corporate restructuring to be undertaken by the Target
Company prior to Completion, the Vendor will hold 100% of the issued and paid-up share capitalof the Target Company.
2.2.2. The Vendor Shareholders
Among the Vendor Shareholders, the following shareholder groups (determined based on theultimate beneficial shareholder of the Vendor Shareholders) hold over 10% of the interest in theTarget Company:(a)Vertex Funds (comprising Vertex Legacy Continuation Fund Pte. Ltd., Vertex Growth Fund
Pte. Ltd., and Vertex Ventures SEA Fund III Pte. Ltd.);(b)

Founder Group (comprising Dragon Alexander Limited, Ms. Angela Phua and Mr. Ng Jing
Shen); and

11

(c)

IVP Funds (comprising M17 Growth SPV LLC, M17 Growth SPV B LLC, Infinity e.Ventures
Asia III, L.P. and IVP Annex I LLC).

Dragon Alexander Limited is wholly owned by the Founder, who is a co-founder and the nonexecutive chairman of the Target Company. The Founder is proposed to be a non-executive
director and the non-executive chairman of the Enlarged Group on Completion.
Mr. Ng Jing Shen is a co-founder and the chief technology officer of the Target Company. Mr. Ng
Jing Shen is proposed to be the chief technology officer of the Enlarged Group on Completion.
Mr. Akio Tanaka holds an interest in Infinity e.Ventures Asia III, L.P and is a director of the Target
Company. Mr. Akio Tanaka is proposed to be a non-executive director of the Enlarged Group on
Completion.
2.3.

Historical Financial Information of the Target GroupThe summary of the consolidated financial statements of the Target Group for the financial years
ended 31 December 2020 ("FY2020"), 31 December 2021 ("FY2021") and 31 December 2022("FY2022"), on which an audit report will be included within the Circular, is presented in the tables
below.

2.3.1. Results of Operations of the Target GroupFY2020

FY2021

FY2022(US$ millions)Operating revenue

411.4

497.8

363.7

Gross profit

175.4

187.7

126.1

Operating income

24.4

10.4

10.1

(Loss)/profit for the year

(51.9)

109.5(51.0)(51.9)
59.1

109.5(112.4)(51.0)
55.9

Adjusted profit/(loss)

7.2

(2.9)

4.9

Operating income
Add: Depreciation
Add: Amortisation

24.4
2.7
3.2

10.4
2.9
2.2

10.1
2.6
2.3

EBITDA

30.3

15.5

15.0

Add: Share-based payments

3.0

1.9

0.8

Adjusted EBITDA

33.3

17.4

15.8

Non-IFRS Financial Measures(Loss)/profit for the year
Add/(less): Revaluation (loss)/gain on
financial liabilities(1)12Note:(1) Refers to the revaluation (loss)/gain on the financial liabilities at fair value through profit or loss (comprisingpreferred shares and warrants), which are not expected to recur after the Completion.

2.3.2. Financial Position of the Target Group(US$ millions)

FY2020

FY2021

FY2022

Cash and cash equivalents

92.5

59.1

39.3

Total current assets

128.1

100.3

69.0

Total non-current assets

47.5

44.4

34.4

Total assets

175.5

144.7

103.4

Total current liabilities(2)

119.3

110.7

284.6

Total non-current liabilities

290.1

163.1

2.0

Total liabilities

409.4

273.8

286.6

Total equity(233.8)(129.1)(183.2)

Total liabilities and equity

175.5

144.7

103.4

8.7

(10.4)(215.6)

Net current assets/(liabilities)

Note:(2) Includes the re-classification of the financial liabilities at fair value through profit or loss (comprising preferredshares and warrants) of US$211.1 million from a non-current liability in FY2021 to a current liability in FY2022,
as the financial liabilities were expected to be due within 12 months from 31 December 2022. Subsequently
in April 2023, the preference shareholders and warrant holders have agreed to extend the redemption dateof the financial liabilities to 31 December 2025. As such, the financial liabilities will be reclassified back to noncurrent liabilities in the interim balance sheet to be prepared as at 30 June 2023.

2.3.3. Cash Flows of the Target Group(US$ millions)

2.4.

FY2020

FY2021

FY2022

Cash flows from operations

67.4

7.9

3.5

Net cash flows from/(used in) operating activities

66.7

(2.9)

(10.5)Net cash flows from/(used in) investing activities

3.4

(1.4)

(0.8)

Net cash flows used in financing activities(0.1)(26.6)(4.2)

Rationale for the Proposed Business Combination
The Company is a special purpose acquisition company incorporated for the purpose of effecting
an initial business combination. Pursuant to Rule 210(11)(m)(i) of the Listing Manual, the Company
is required to complete an initial business combination within 24 months from its listing date (the"BC Deadline").
In accordance with the Company's acquisition mandate set out in its prospectus dated 13 January2022, the Company has selected the Target Company as an acquisition target for the initial

13

business combination for the following reasons:(a)the Target Company is a technology-driven business in the consumer internet andtechnologies industry, which is one of the industries in which the Sponsor and the
management team of the Company has deep expertise and a proven track record;(b)

the Target Company presents strong growth potential as evidenced from its multiple growth
drivers (such as the new V-Liver business, live commerce and in-app games);(c)while the Target Group currently operates mainly in Japan and Taiwan, its platforms areavailable to live streamers and users from the U.S., Hong Kong, Singapore and other
Southeast Asian markets and there is potential for the Target Group's operations to be scaled
up and expanded across these regions;(d)the Target Company has been generating substantial revenue and has been EBITDA
positive since FY2020; and(e)the Target Company is led by a strong management team with professional expertise invarious areas such as consumer technology and product development, cross-borderbusiness operations, finance and corporate management.

Accordingly, subject to Shareholders' approval, the Company intends to complete the Proposed
Business Combination with the Target Company before the BC Deadline, i.e. 20 January 2024.
2.5.

Salient Terms of the SPA

2.5.1. Conditions PrecedentPursuant to the SPA, Completion is conditional upon, amongst others, the following conditions
precedent being satisfied or waived on or before Completion ("Conditions Precedent", and each,a "Condition Precedent"):(a)the Company having obtained Shareholders' approval at the EGM for the Proposed
Transactions;(b)the Company having obtained the approval of the SGX-ST for Completion of the Proposed
Business Combination pursuant to the terms of the SPA, and where such approval is subject
to conditions, the compliance by the Target Company and (where relevant) the Company tothe satisfaction of the SGX-ST with all the conditions imposed by the SGX-ST;(c)the Company having obtained the approval of SGX-ST for the listing and quotation of theConsideration Shares, the PIPE Shares, the Special Bonus Shares, the Earnout Shares, theESOP Shares and the EIS Shares on the SGX-ST and where such approval is subject toconditions, the compliance by the Target Company and (where relevant) the Company to thesatisfaction of the SGX-ST with all the conditions imposed by the SGX-ST;(d)the Target Company having rectified or resolved the issues identified through the legal,financial and tax due diligence conducted by the Company to the reasonable satisfaction of
the Company in its sole and absolute discretion; and(e)other conditions precedent customarily included for transactions of a similar nature, such as,
among others, those relating to PIPE financing, fulfilment of representations and warranties,

14and compliance with undertakings.
2.5.2. Representations and Warranties
Each of the Vendor and the Warrantors shall provide customary representations and warranties to
the Company, and the Company shall also provide customary representations and warranties tothe Vendors and the Warrantors.
3.

MORATORIUM
In compliance with the moratorium requirements under the Listing Manual and/or the terms of the
SPA, and to demonstrate their commitment to the Enlarged Group, the following persons will
provide moratorium undertakings in respect of their shareholdings in the Company on Completionin favour of the Joint Financial Advisers (as defined below):

4.

(a)

the Sponsor;(b)Vertex SPV;(c)

Venezio Investments Pte. Ltd. ("Venezio");(d)Tembusu Capital Pte. Ltd.;(e)

Mr. Phua Jiexian Joseph;(f)

Mr. Ng Jing Shen;(g)

Ms. Aika Tong;(h)Vertex Legacy Continuation Fund Pte. Ltd.;(i)

Vertex Growth Fund;(j)

Vertex Ventures SEA Fund III Pte. Ltd.;(k)

Infinity e.Ventures Asia III, L.P.

(l)

Dragon Alexander Limited;(m)

M17 Growth SPV LLC;(n)

KTB China Synergy Fund; and(o)

Key Executives (other than Mr. Phua Jiexian Joseph and Mr. Ng Jing Shen).

RELATIVE FIGURES UNDER RULE 1006
Pursuant to Rule 1015 of the Listing Manual, shareholders’ approval, amongst others, must be
obtained for a "very substantial acquisition" or "reverse takeover" as defined in Chapter 10 of the
Listing Manual. Rule 1006 of the Listing Manual sets out the computations for relative figures, andwhere any of the relative figures is 100% or more, or if the transaction is one which will result in thechange in control of a listed company, such a transaction is a "very substantial acquisition" or15

"reverse takeover".
The relative figures for the Proposed Business Combination using the bases of comparison set out
in Rule 1006 of the Listing Manual are as follows:
Rules

Bases

Relative Figures

Rule 1006(a)Net asset value of the assets to bedisposed of, compared with the Company's
net asset value

Not applicable(1)Rule 1006(b)Net profits attributable to the Target
Company, compared with the Company's
net profits(950%)(2)

Rule 1006(c)Aggregate value of the Purchase
Consideration given for the Proposed
Business Combination, compared with theCompany’s market capitalisation based on
the total number of issued shares
excluding treasury shares468%(3)Rule 1006(d)Number of equity securities issued by theCompany as Purchase Consideration for
the Proposed Business Combination,compared with the number of equity
securities of the Company in issue445%(4)Rule 1006(e)Aggregate volume or amount of proved
and probable reserves to be disposed of,compared with the aggregate of theCompany's proved and probable reserves

Not applicable(5)Notes:(1) Rule 1006(a) of the Listing Manual is not applicable to an acquisition of assets.
(2) Computed based on the Target Company’s net loss for FY2022 of approximately US$51.0 million and theCompany's audited net profit for FY2022 of approximately S$7.3 million.
(3) Computed based on (i) the Purchase Consideration of S$925.1 million (equivalent to approximately US$682.2
million), and (ii) the Company’s market capitalisation of approximately S$197.7 million (computed based on the
Company’s issued ordinary share capital of 41,606,000 shares and the volume weighted average price of theshares of S$4.7517 on 29 September 2023, being the last full market day on which the Company’s shares weretraded prior to the date of the SPA). The Company does not have any treasury shares.
(4) Based on 160,605,109 Consideration Shares and up to 24,408,000 Earnout Shares and the Company’s issued
ordinary share capital of 41,606,000 shares.
(5) Rule 1006(e) of the Listing Manual is not applicable as the Company is not a mineral, oil and gas company.

Notwithstanding the negative relative figure computed under Rule 1006(b) of the Listing Manual,
the relative figures computed under Rules 1006(c) and 1006(d) of the Mainboard Rules exceed
100%. Accordingly, the Proposed Business Combination constitutes a "very substantial acquisition"or "reverse takeover" pursuant to Chapter 10 of the Listing Manual. In addition, as the Vendor
and/or the Vendor Shareholders (if so nominated by the Vendor) will hold a majority of the enlarged
share capital of the Company upon Completion, a change in control of the Company will arise
immediately upon Completion. Accordingly, the Proposed Business Combination is subject to, interalia, the approval of the Shareholders at the EGM and the approval of the SGX-ST pursuant toRule 1015 of the Listing Manual.
5.

FINANCIAL EFFECTS OF THE PROPOSED TRANSACTIONS
The pro forma financial effects of the Proposed Business Combination on the share capital,

16

earnings and the net tangible assets ("NTA") of the Company have been prepared based on theaudited consolidated financial statements of the Company for FY2022 and the consolidated
financial statements of the Target Group FY2022, on which an audit report will be included within
the Circular.
The pro forma financial effects of the Proposed Business Combination are for illustrative purposes
only. The objective is to illustrate what the historical information might have been if the Proposed
Business Combination had been completed at an earlier date. However, such information is notnecessarily indicative of the actual results of the operations or the related effects in the financial
position that would have been attained had the Proposed Business Combination been completed
at such an earlier date. Given that the financial effects presented below are pro forma in nature andonly for illustrative purposes, it does not necessarily represent the actual financial position and/or
results of the Company or the Enlarged Group immediately after Completion.
5.1.

Bases and Assumption
For illustrative purposes only, the financial effects of the Proposed Transactions are preparedbased on, inter alia, the following assumptions:(a)the financial effects of the Proposed Transactions on the share capital, NTA and earnings ofthe Enlarged Group are computed based on the audited financial statements of the Company
and the consolidated financial statements of the Target Group for FY2022;(b)

the financial effects of the Proposed Transactions on the share capital and NTA of theEnlarged Group are computed assuming that the Proposed Transactions have been
completed on 31 December 2022;(c)the financial effects of the Proposed Transactions on the earnings and earnings per share("EPS") of the Enlarged Group are computed assuming that the Proposed Transactions havebeen completed on 1 January 2022;(d)the financial effects do not take into account any transactions effected or completed by the
Enlarged Group subsequent to 31 December 2022;(e)

directly attributable costs in connection with the Proposed Transactions are assumed to beapproximately S$21.0 million (equivalent to approximately US$15.5 million) assuming thatnone of the Shareholders redeem their shares in the Company upon Completion ("NoRedemption") and approximately S$19.0 million (equivalent to approximately US$14.0
million) assuming that all Shareholders (save for Vertex SPV and Venezio) redeem theirshares in the Company upon Completion ("Maximum Redemption"); and(f)the difference between the deemed consideration for the Proposed Business Combinationand the fair value of the net assets of the Enlarged Group, if any, have not been considered
and will be determined on the date of Completion when the Vendor has effectively obtained
control of the Company. The actual difference could be materially different from theaforementioned assumption.

For the avoidance of doubt, the financial effects of the Proposed Transactions reflect the following:
(1)

(2)
(3)

the 41,606,000 issued shares held by the Non-Redeeming Shareholders assuming that
there is No Redemption and 12,000,000 issued shares held by the Non-Redeeming
Shareholders assuming that there is Maximum Redemption;
the allotment and issuance of 160,605,109 Consideration Shares;
the allotment and issuance of 2,000,000 PIPE Shares (for illustrative purposes only); and

17

(4)

the allotment and issuance of 3,760,600 Special Bonus Shares,

but do not take into consideration the following:
(5)
(6)
(7)
(8)
(9)
5.2.

the allotment and issuance of 2,114,891 ESOP Shares;
the allotment and issuance of 24,408,000 Earnout Shares;
the allotment and issuance of 2,550,000 EIS Shares;
the allotment and issuance of any promote shares to the Sponsor; andthe exercise of the Company’s public warrants and private placement warrants.

Financial Effects on Share Capital
As at 31 August 2023, there were 41,606,000 shares, 12,481,799 public warrants and 16,000,000
private placement warrants in the Company outstanding.

Number of shares

Effects of No
Redemption

Effects of Maximum
Redemption

Immediately before Completion

41,606,000

41,606,000

Minus: Redemption by Shareholders

029,606,000

Add: Number of Consideration Shares

160,605,109

160,605,109

Add: PIPE Shares(1)2,000,000

2,000,000

Add: Special Bonus Shares

3,760,600

800,000

Immediately following Completion

207,971,709

175,405,109

Note:(1) For illustrative purposes only

5.3.

Financial Effects on NTA and NTA per Share
Pro forma after adjustments
VTAC

TargetCompany

Shares outstanding(millions)

41.6

NTA (US$ million)
NTA per share (US$)

No
Redemption

Maximum
Redemption

148.9(2)

208.0

175.4

26.4

(209.7)

150.5

41.3

0.64

(1.41)

0.72

0.24(as of 31 Dec 2022)

Notes:The pro forma adjustments relate to:(i) The effects of the reverse takeover accounting for the Proposed Business Combination, with a resultant
negative goodwill of US$11.8 million.
(ii) Conversion of the warrants and preference shares of the Target Group aggregating to US$211.1 million into
equity.
(iii) Receipt of PIPE Financing proceeds of US$7.4 million (for illustrative purposes only).
(iv) Total estimated professional fees in relation to the Proposed Business Combination amounting to US$15.5
million assuming that there is No Redemption and US$14.0 million assuming that there is Maximum
Redemption, which are deemed to have been incurred and settled in cash.
(2)

Refers to the issued shares in the capital of the Target Company after applying the exchange ratio of 1.682(such ratio being calculated based on the total number of sale shares divided by the number of Consideration18

Shares and rounded to the third decimal place).

5.4.

Financial Effects on Earnings and EPS
Pro forma after adjustments
VTAC

TargetCompany

Shares outstanding(millions as of 31 Dec
2022)

41.6

Net profit/(loss) aftertax (US$ million)
Net profit/(loss) after
tax per share (US$)

No
Redemption

Maximum
Redemption

148.9(2)

208.0

175.4

5.3

(51.0)

9.0

5.5

0.13

(0.34)

0.04

0.03(for FY2022)

Notes:The pro forma adjustments relate to:(i) The effects of the reverse takeover accounting for the Proposed Business Combination, with a resultant
negative goodwill of US$11.8 million.
(ii) Reversal of interest expense on redeemable shares of the Company of US$2.6 million.
(iii) Reversal of the revaluation loss on warrants and preference shares of the Target Group aggregating to
US$55.9 million and changes in credit risk of warrants and preference shares of the Target Group of
US$700.
(iv) Total estimated professional fees in relation to the Proposed Business Combination amounting to US$15.5
million assuming that is No Redemption and US$14.0 million assuming that there is Maximum Redemption,
which are deemed to have been incurred and settled in cash.
(2) Refers to the issued shares in the capital of the Target Company after applying the exchange ratio of 1.682(such ratio being calculated based on the total number of sale shares divided by the number of Consideration
Shares and rounded to the third decimal place).

6.

HISTORICAL PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP
The pro forma financial information consists of the pro forma consolidated balance sheets as at 31
December 2022, the pro forma consolidated statements of comprehensive income for the financial
year ended 31 December 2022, the pro forma consolidated statements of cash flows for the financial
year ended 31 December 2022, and related notes set out in the Circular.
The pro forma financial information has been compiled by the Company’s management to illustrate
the impact of the events on the Enlarged Group's financial position as at 31 December 2022 as if
the events had taken place on 31 December 2022; and its financial performance and cash flows forthe financial year ended 31 December 2022 as if the events had taken place on 1 January 2022.
As part of this process, information about the Enlarged Group's financial position, financial
performance and cash flows has been extracted by the Company’s management from the following:(i)

audited financial statements of the Company for the financial year ended 31 December 2022,
on which an audit report has been published; and(ii)

consolidated financial statements of the Target Group for the financial years ended 31
December 2020, 31 December 2021 and 31 December 2022, on which an audit report will be
included within the Circular.

The pro forma financial information has been prepared based on the assumption that there is No

19

Redemption.
Reference should be made to the pro forma financial information of the Enlarged Group
included in the Circular.
6.1.

Summary of the Unaudited Pro Forma Consolidated Statement of Comprehensive Incomeof the Enlarged Group
Unaudited Pro Forma
Consolidated Statement ofComprehensive Income
31 December 2022
363.7

(US$ millions)Operating revenue
Gross profit

126.1

Operating income

8.9

Profit for the year attributable to owners of theCompany

9.0

Notes:The pro forma adjustments relate to:(i) The effects of the reverse takeover accounting for the Proposed Business Combination, with a resultant
negative goodwill of US$11.8 million.
(ii) Reversal of interest expense on redeemable shares of the Company of US$2.6 million.
(iii) Reversal of the revaluation loss on warrants and preference shares of the Target Group aggregating to US$55.9
million and changes in credit risk of warrants and preference shares of the Target Group of US$700.
(iv) Total estimated professional fees in relation the Proposed Business Combination amounting to US$15.5 million.

6.2.

Summary of the Unaudited Pro Forma Consolidated Balance Sheet of the Enlarged Group
Unaudited Pro Forma
Consolidated Statement of
Financial Position
31 December 2022
33.8

(US$ millions)
Cash and cash equivalents
Total current assets

220.9

Total non-current assets

34.4

Total assets

255.3

Total current liabilities

76.3

Total non-current liabilities

2.0

Total liabilities

78.3

Total equity

177.0

Total liabilities and equity

255.3

Net current assets

144.6

Notes:The pro forma adjustments relate to:

20

(i)
(ii)
(iii)
(iv)
(v)

6.3.

The effects of the reverse takeover accounting for the Proposed Business Combination, with a resultant
negative goodwill of US$11.8 million.
Conversion of the redeemable shares of the Company of US$130.8 million into equity.
Conversion of the warrants and preference shares of the Target Group aggregating to US$211.1 million into
equity.
Receipt of PIPE Financing proceeds of US$7.4 million (for illustrative purposes only).
Total estimated professional fees in relation to the Proposed Business Combination of US$15.5 million which
are deemed to have been incurred and settled in cash.

Summary of the Unaudited Pro Forma Consolidated Statement of Cash Flows of theEnlarged Group
Unaudited Pro Forma
Consolidated Statement of Cash
Flows
31 December 2022
2.4

(US$ millions)
Cash flows from operations
Net cash flows used in operating activities(11.6)Net cash flows used in investing activities(170.8)Net cash flows from financing activities

161.3

Notes:The pro forma adjustments relate to:(i)
The effects of the reverse takeover accounting for the Proposed Business Combination, with a resultant negative
goodwill of US$11.8 million.
(ii) Conversion of the redeemable shares of the Company of US$130.8 million into equity.
(iii) Conversion of the warrants and preference shares of the Target Group aggregating to US$211.1 million into
equity.
(iv) Receipt of PIPE Financing proceeds of US$7.4 million (for illustrative purposes only).
(v) Total estimated professional fees in relation to the Proposed Business Combination amounting to US$15.5
million, which are deemed to have been incurred and paid as of 1 January 2022.

7.

INTERESTS OF DIRECTORS AND CONTROLLING SHAREHOLDERS
As at the date of this announcement, the Company’s Non-Executive Chairman, Mr. Chua Kee Lockhas interests as (a) a direct or indirect individual investor in general partners ("GPs") that manage
Vertex Legacy Continuation Fund Pte. Ltd., Vertex Ventures SEA Fund III Pte. Ltd. and Vertex
Growth Fund, which are shareholders of the Target Company; and (b) a member of the investmentcommittees ("ICs") formed by the fund managers appointed by the GPs which manage theabovementioned funds in his individual capacity (which for the avoidance of doubt, does not include
the abovementioned funds where Mr. Chua was appointed as an IC member to represent theinterest of the Sponsor).
As at the date of this announcement, the Sponsor has invested in the Target Company throughVertex Legacy Continuation Fund Pte. Ltd., Vertex Ventures SEA Fund III Pte. Ltd. and Vertex
Growth Fund Pte. Ltd.. The Sponsor is a wholly-owned indirect subsidiary of Temasek Holdings(Private) Limited ("Temasek"), being as at the date of this announcement, a Controlling
Shareholder (as defined in the Listing Manual) of the Company. In addition, as at the date of thisannouncement, Temasek’s indirect wholly-owned subsidiary, Pavilion Capital Holdings Pte. Ltd.,
which wholly-owns Pavilion Capital Fund Holdings Pte. Ltd. and which in turn wholly-owns Pav
Investments Pte. Ltd., has also invested in the Target Company. As at the date of thisannouncement, the Target Company has issued existing warrants to Innoven Capital Singapore
Pte. Ltd., which is an affiliate of Temasek. Each of the Sponsor, Vertex SPV, Pav Investments Pte.
Ltd. and Innoven Capital Singapore Pte. Ltd. is an independently-managed Temasek portfolio
company. Temasek is not involved in the business or operational decisions of these entities,

21

including their decisions in relation to the Target Group and the Company.
Save as disclosed above, none of the Directors or Controlling Shareholders (as defined in the
Listing Manual) of the Company has any interests, direct or indirect, in the Proposed Transactions.
8.

SERVICE CONTRACTS
As at the date of this announcement, the Company has not entered into any service agreementwith any person proposed to be appointed as a Director or executive officer in connection with the
Proposed Business Combination. It is envisaged that the Company will, on or prior to Completion,enter into service agreements with the relevant persons on terms acceptable to the Company and
the Target Company. The details of such appointments and service agreements (if any) will be set
out in the Circular.

9.

STATUS OF THE SHARES AND APPLICATION TO THE SGX-ST
The issuance and allotment of the Consideration Shares, the Earnout Shares, the EIS Shares, theESOP Shares, the PIPE Shares and the Special Bonus Shares is subject to, inter alia, the receiptof the in-principle approval from the SGX-ST for the listing and quotation. The Consideration
Shares, the Earnout Shares, the EIS Shares, the ESOP Shares, the PIPE Shares and the Special
Bonus Shares, upon its allotment and issuance, will be credited as fully paid-up and free from all
encumbrances and will rank pari passu in all respects with the then existing shares of the Company,
save for any rights, benefits, dividends and entitlements attached as at the record date of which will
be before Completion.
An application for the listing of, dealing in and quotation for the Consideration Shares, the Earnout
Shares, the EIS Shares, the ESOP Shares and the Special Bonus Shares on the Main Board of
the SGX-ST has been made to the SGX-ST, while the application for the listing of, dealing in andquotation for the PIPE Shares on the Main Board of the SGX-ST will be submitted in due course.
An announcement will be made upon the receipt of the in-principle approval(s) from the SGX-ST.

10.

SOLE ISSUE MANAGER AND JOINT FINANCIAL ADVISERS
The Company has appointed DBS Bank Ltd. ("DBS") as its sole issue manager in respect of the
Proposed Transactions, and DBS and UBS AG Singapore Branch ("UBS") (including its affiliate,
Credit Suisse (Singapore) Limited ("Credit Suisse")) as its joint financial advisers in respect of the
Proposed Transactions and its joint placement agents in respect of the PIPE Financing.

11.

CIRCULAR AND DOCUMENTS AVAILABLE FOR INSPECTION
The Circular setting out, among others, the terms of the Proposed Transactions, together with a
notice of EGM, will be dispatched by the Company to Shareholders in due course.
A copy of the SPA will be made available for inspection during normal business hours at the
principal place of business of the Company at 250 North Bridge Road, #11-01, Raffles City Tower,
Singapore 179101, for a period of three months from the date of this announcement.

12.

RESPONSIBILITY STATEMENTThe Directors collectively and individually accept full responsibility for the accuracy of theinformation given in this announcement (save for the information on the Target Group, the Vendor,
the Vendor Shareholders and the Warrantors in paragraphs 2.1, 2.2, 2.3, 5 and 6 above) and22

confirm after making all reasonable enquiries that to the best of their knowledge and belief, thisannouncement constitutes full and true disclosure of all material facts about the Proposed
Transactions and the Company, and the Directors are not aware of any facts the omission ofwhich would make any statement in this announcement misleading (save for the information on
the Target Group, the Vendor, the Vendor Shareholders and the Warrantors in 2.1, 2.2, 2.3, 5 and6 above). Where information in this announcement has been extracted from published orotherwise publicly available sources or obtained from a named source, the sole responsibility of
the Directors has been to ensure that such information has been accurately and correctly
extracted from those sources and/or reproduced in this announcement in its proper form andcontext.
13.

CAUTION IN TRADING
Shareholders and potential investors are advised to exercise caution in trading their shares as
there is no certainty or assurance as at the date of this announcement that the Proposed
Transactions (including the Proposed Business Combination) will be completed. The Company
will make the necessary announcements when there are further developments on the Proposed
Transactions (including the Proposed Business Combination). Shareholders are advised to readthis announcement and any further announcements by the Company carefully, and should consult
their stockbrokers, bank managers, solicitors or other professional advisers if they have any doubt
about the actions they should take.

BY ORDER OF THE BOARD
VERTEX TECHNOLOGY ACQUISITION CORPORATION LTD

Jiang Honghui
Executive Director and Chief Executive Officer
2 October 2023

Credit Suisse and DBS were the joint issue managers for the Company’s initial public offering (the"Offering"). Credit Suisse, DBS and Morgan Stanley Asia (Singapore) Pte. were the joint global
coordinators, joint bookrunners and joint underwriters for the Offering.

23